Economic development · A Level Economics

Between 2000 and 2020, Brazilian GDP, measured in US dollars ($), rose from $1.19 trillion to $1.89 trillion at constant prices (2015). In the same period GDP per head rose from $6745 to $8204 at constant prices (2015).

The strength of the Brazilian economy lies in the variety and quantity of its natural resources. For example, Brazil is one of the world’s largest exporters of agricultural commodities, mainly soya and beef. There are also significant exports of minerals. Brazil is the second largest iron ore producer in the world and extracts 3.4% of the world’s crude oil.

World agricultural markets are dominated by four large commodity traders that buy and sell products such as grain and soya. They have grown through both horizontal integration and vertical integration. These traders own many large farms, they process farm produce and transport it to trade on international markets. In addition to buying and selling, the traders provide seed and fertiliser to farmers and supply storage for their products. They use agricultural by-products to produce items like biofuel. These traders also provide financial services to these markets.

Commodity traders are very important to the development of complex global food markets. Food prices, access to scarce resources such as land and water, climate change and food security are all affected by the activities of traders. In Brazil, the output of 15 000 farmers is purchased by a single trader.

In Brazil the development of agriculture, mining and oil extraction all contribute to environmental degradation. Both agriculture and mining have been accompanied by deforestation of the Amazon rainforest. Access roads to mining areas also lead to deforestation. Waste water from mining activity is frequently stored in reservoirs behind dams. On two occasions in the last 10 years these dams failed to hold back the water. This led to widespread flooding, the discharge of pollutants such as mercury into rivers, and deaths.

Sources: The Guardian, 23 August 2022

Cereal Secrets, Oxfam Research Report, August 2012 oec.world/en/profile, August 2023

Since 1971 Bangladesh has experienced significant economic development, moving from the low-income to the lower-middle-income country classification. Gross National Income (GNI) per capita at constant 2017 prices in United States dollars ($) rose from $2342 to $5823 between 2000 and 2020. Over the same period, the country’s Human Development Index (HDI) rose from 0.49 to 0.66.

During this period, Bangladesh underwent changes in employment as it moved from the agricultural sector to the manufacturing and services sectors.

First, in agriculture, output increased by more than 100% whilst employment fell from 65% to 38% of the working population. This change was helped by innovation in crop irrigation, land preparation and harvesting, aided by the development of local industries to provide the capital equipment needed.

A second source of economic development was the growth in the clothing industry producing ready-made garments (RMG) that contributed about 11% of Bangladesh’s Gross Domestic Product (GDP) and employed 4.4 million workers of which 2.5 million were women (2020). The industry uses significant division of labour with production split into 10 or more processes, for example, cutting, sewing zips, assembly and packaging.

The value of raw materials imported for the RMG industry was about half of the value of the industry’s exports. Net exports from this sector stood at $23 billion. This enabled Bangladesh to both import a wider range of goods and services and reduce the deficit on its balance of trade in goods.

In 2020, there were more than 4000 RMG manufacturers in Bangladesh, differentiated by the quality of their products and the speed of their delivery. The RMG industry supplied more than 100 major US and European retailers.

However, the RMG industry has critics who point to air and water pollution from the chemicals used in cotton growing and manufacturing clothes. The industry is also accused of employing child labour and of having poorly constructed factories.

Sources: Bangladesh overview: World Bank, 11 April 2024 and Quarterly Review on Readymade Garments, Bangladesh Bank Research Department, 14 February 2023