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The causes, conditions, and solutions of Underdevelopment: A case study of Brazil

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The causes, conditions, and solutions of Underdevelopment: A case study of Brazil Alec Griswold 12/2/04 Professor Pape One of the main issues in International Relations is the underdevelopment of third world countries and its effect on the world economy. Brazil, one of the six largest countries in the world, is a classic example of the effects of underdevelopment (Inequalities and Economic Development in Brazil, 5). The gap between rich and poor is the most extensive in the world, with the wealthiest one percent receiving more than the poorest fifty percent (Ibid, 12). Brazil's history seems to play a large part in its ineffective social and economic environment. However, history is certainly not the only factor that is responsible for the underdevelopment and inequality of income of Brazil. The possible roots of underdevelopment range from colonial forms of economical exploitation, economic dependency on metropolis countries, poor economic structure of an underdeveloped country, isolation, governmental policies, and foreign exploitation. The debate of Underdevelopment centers on whether these countries are victims of imperialistic forces or rather victims of their own deficiencies. Moreover does the economic world system exploit underdeveloped countries or do these underdeveloped countries exist in this condition due to their own faults of governance. The state of underdevelopment in Brazil is a result of political instability, social inequality, and the emergence of foreign entities within its economy In order to understand the reasons and conditions of underdevelopment it is necessary to be aware of the history of Brazil's economic development. ...read more.


American involvement in Brazil has played a large role in both infusing as well as exploiting the country's economy. In the years from 1947-1960, the total amount of new investment and loans that flowed into Brazil was 1,814,000,000 (Huberman, 2). On the other hand the amount that flowed out of Brazil in profits and interest payments was 2,459,000,000 (ibid). This means that 645,000,000 more was paid out by Brazil than came into Brazil (ibid). Although these figures only pertain to private investment, American aid or public capital is an important source of debate. According to the US Department of Commerce, United States aid, and loans to Latin America amount to close to 4 billion dollars in 1970, however, over 1.5 billion is noted as repayments by 1972 (ibid, 3). Although these aids and loans have produced some gains in Latin American countries like Brazil, there is a structural flaw that has hindered overall progress. The fact is that no matter how much aid is given to South American countries it will not propose a solution to underdevelopment. In addition, it will not work because it does not affect the imperialist relationship which is a fundamental cause of the conditions of underdevelopment. In many of these countries, especially Brazil, "the wealth flowing from their natural resources is appropriated by U.S. monopoly corporations which have distorted these economies in their concentration on the extraction of profitable raw materials. (Huberman, 4)" Furthermore the land which is not in the hands of foreign interests is held by the native bourgeoisie. ...read more.


The legitimacy of the Brazilian government was destroyed by its inability to distribute resources and capital in an equal manner, and thus has rendered the government ineffective. Essentially, rescuing politics is crucial to the development of a nation, since governability depends on the affirmation of democratic institutions subject to social control and oriented toward the interests of the nation (Woods, 171). In order for Brazil and other underdeveloped countries to break this destructive pattern they must create coalitions and concentrate on building more open political and social institutions. Moreover they must ensure that economic institutions and policies seek greater equity, increase access by the poor to high-quality public services, and reform income transfer programs so that they reach the poorest families (Inequalities and Economic Development in Brazil, 215-216). Brazil is an integral and inseparable part of the construction of the world economy and its position as a semiperiphal country has shown the profound instability of capitalism. Furthermore, its condition as a regional power portrays the challenges of restructuring in the world capitalist system. The causes and conditions of underdevelopment are numerous; however, the solutions to these problems are also abundant. It will be in the world economy's best interest to help Brazil, and other underdeveloped countries, create the right conditions so they can grow into a developed nation. In defeating underdevelopment all nations will have the opportunity to provide equal resources to their inhabitants as well as break the cycle of structural poverty. It is essential to the existence of our world that underdevelopment be reversed and a world of equality and contentment is able to thrive. ...read more.

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