Brazil is the fifth largest country in the world and boasts the tenth largest economy. In 1994 the economy was US $536,309m which equals a per capita GDP of 3,370. Between 1985 and 1994 per capita GDP decreased by 0.4% this is due to the rapid population expansion of approximately 2% per year. During the same time period the real GDP increased by 2.1% and by 5.8% in 1994.(Europa 637) Fernanado Henrique Cordoso has brought inflation down to 1% a month or 12% a year. Prior to his election inflation sometimes reached upwards of 1000% a year.(Lomheim)

Industry is the largest component of GDP. It accounted for 34% of GDP and 23% of the labor force in 1994. This area has had an average GDP increase of only 0.7% during the period between 1980 to 1993. Agriculture which includes hunting, fishing, and forestry contributed 13.1% of GDP while employing 22% of the workforce. The major crops are soy beans, coffee, and s

With the advent of a new political system and very unstable inflation rates Brazil looks like a big gamble if the firm was to open operations in Rio De Janeiro or San Paulo, the two largest cities in the country. There are many potential problems in such a newly formed government. These include: government overthrow by military coup, civilian revolt, and poor political relations with foreign corporations. The GDP seems to be expanding but the semi and unskilled workforce and high illiteracy rates hold back the country from achieving its full economic potential. Inflation was at an annual increase of 899% a year between 1985 to 1994 and there are little restraints put in by the new government to keep inflation under control in the long run. I would recommend for the firm not to open in Brazil due to many potential problems that may occur with such a young nation.

There are six primary regulatory institutions within Brazil. The BACEN controls the central bank, the CVM regulates the securities industry, CADE is the Administrative Council for Economic Defense, INPI is the National Institute of Industrial Property, IDC is the Industrial Development Council, and Federal Trade Department, DECEX, these councils heavily regulate the business dealings within their respective areas. However, foreign ownership of local companies is permitted by the Brazilian government. Rural land holdings by foreigners are restricted and Brazil tends to factor their domestic firms when making government contracts. (PW 41)

Importation of products into Italy is free of restrictions. The common customs tariff applies to all goods coming into Italy due to their EU agreements. However, there are no duties placed on goods that are traded between EU and EFTA nations. A value added tax is placed upon goods that do not come from the EU. Excise taxes are used when imports are of the same goods that are produced in Italy.(PW 45)

Some topics in this essay:
Henrique Cordoso, Inflation Italy, Salvatore Lima, European Union, GDP Europa, San Paulo, EU Excise, Political System, Economy Brazil, Marche PW, europa 1700, european union, political system, federal government, trading partner, firm operations, real gdp increased, 1985 1994, gdp increased, scandals 1993, tax exemptions firm, real gdp, natural population growth, miles population density, population density mile,