The Brazilian Miracle () was a period of exceptional economic growth in Brazil during the rule of the

Brazilian military dictatorship The military dictatorship in Brazil ( pt, ditadura militar) was established on 1 April 1964, after a coup d'état by the Brazilian Armed Forces, with support from the United States government, against President João Goulart. The Brazilian dic ...

, achieved via a heterodox and developmentalist model. During this time the average annual GDP growth was close to 10%. The greatest economic growth was reached during the tenure of President Emílio Garrastazu Médici from 1969 to 1973. The short-lived economic miracle in Brazil was based on, as

James Petras James Petras (born 17 January 1937) is a retired Bartle Professor (Emeritus) of Sociology at Binghamton University in Binghamton, New York and adjunct professor at Saint Mary's University, Halifax, Nova Scotia, Canada who has published on politi ...

argues:

''a) violent illegitimate seizure of political power by the military;'' ''b) the institutionalization of violence through an extensive and intensive system of military-police controls throughout civil society;'' ''c) the systematic use of terror to contain popular discontent, to disarticulate mass organizations and to destroy guerrilla resistance;'' ''d) the elaboration of the National Security ideology to justify the State's "permanent state of war" against autonomous class or nationalist movements.''

Perception of the so-called ''Golden Age'' of Brazilian development was strengthened in 1970, when Brazil for the third time won the

FIFA World Cup The FIFA World Cup, often simply called the World Cup, is an international association football competition contested by the senior men's national teams of the members of the ' ( FIFA), the sport's global governing body. The tournament has ...

, and the official adoption of the slogan "''Brasil, ame-o ou deixe-o''" ("Brazil, love it or leave it") by the Brazilian military government.

Background

During the presidency of

João Goulart João Belchior Marques Goulart (1 March 1919 – 6 December 1976), commonly known as Jango, was a Brazilian politician who served as the 24th president of Brazil until a military coup d'état deposed him on 1 April 1964. He was considered the ...

, the economy was nearing a crisis, and the annual

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...

rate reached 100%. After the 1964 coup d'état, the Brazilian military was more concerned with political control and left economic policy to a group of entrusted technocrats, led by Delfim Netto. Brazil became an urban society, with 67% of its people living in cities. That was caused by a population shift from the poorer countryside to the booming cities, with

São Paulo São Paulo (, ; Portuguese for ' Saint Paul') is the most populous city in Brazil, and is the capital of the state of São Paulo, the most populous and wealthiest Brazilian state, located in the country's Southeast Region. Listed by the GaW ...

growing faster than the others. Brazil relied on a heterodox, developmentalist model. Its expansion in this period relied on low wages, rapidly rising exports, and foreign capital inflows. The growth during this period is associated with the government minister who oversaw the strategy, Antônio Delfim Netto. Delfim Netto originated the phrase "cake theory" in reference to this model: the cake had to grow before it could be distributed. Although the "cake" in Delfim Netto's metaphor did grow, it was highly unequally distributed.

Successes

The government became directly involved in the economy, as it invested heavily in new highways, bridges, and railroads. Steel mills, petrochemical factories, hydroelectric power plants, and nuclear reactors were built by the large state-owned companies

Eletrobras Eletrobras (, full name: Centrais Elétricas Brasileiras S.A.) is a major Brazilian electric utilities company. The company's headquarters are located in Rio de Janeiro. It is Latin America's biggest power utility company, tenth largest in the w ...

and

Petrobras Petróleo Brasileiro S.A., better known by the portmanteau Petrobras (), is a state-owned Brazilian multinational corporation in the petroleum industry headquartered in Rio de Janeiro, Brazil. The company's name translates to Brazilian Petrole ...

. To reduce the dependency on imported oil, ethanol industry was heavily promoted. By 1980, 57% of Brazil's exports were industrial goods, compared with 20% in 1968. In this period, the annual GDP growth rate jumped from 9.8% per year in 1968 to 14% in 1973 and inflation rose from 19.46% in 1968 to 34.55% in 1974.

Problems

To fuel its economic growth, Brazil needed more and more imported oil. The early years of the Brazilian Miracle had

sustainable growth Sustainable development is an organizing principle for meeting human development goals while also sustaining the ability of natural systems to provide the natural resources and ecosystem services on which the economy and society depend. The desi ...

and borrowing. However, the

1973 oil crisis The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had su ...

made the military government increasingly borrow from international lenders, and the debt became unmanageable. By the end of the decade, Brazil had the largest debt in the world: about $US92 billion. Economic growth definitely ended with the

1979 energy crisis The 1979 oil crisis, also known as the 1979 Oil Shock or Second Oil Crisis, was an energy crisis caused by a drop in oil production in the wake of the Iranian Revolution. Although the global oil supply only decreased by approximately four pe ...

, which led to years of

recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...

and

hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...

References

{{Economic miracle and tiger economy Economic history of Brazil 1960s economic history 1970s economic history Post–World War II economic booms