Economy

 Economy

Brazil has the largest economy in South America and one of the largest economies in the world. However, income distribution is highly unequal, and poverty affects roughly 20 percent of the total population. Inequitable land distribution is a contributing factor; nearly half of all private lands are owned by only 1 percent of the people. Many of Brazil’s landless people live in //favelas// (shantytowns) on the outskirts of urban cities. Despite economic crisis caused by weakened investor confidence, and subsequent currency devaluation, the Brazilian economy has remained relatively stable, spurred on by government spending cuts, tax increases and other emergency measures. Unemployment is moderate in some areas but high in larger areas such as Sao Paulo. Brazil is largely self-efficient in food and consumer goods. Agriculture employs about 20 percent of the population. Brazil is one of the world’s largest producers of coffee, oranges, and bananas. Much of Brazil’s sugarcane is used to make ethyl alcohol, a fuel used in about one-third of Brazilian cars. Despite large reserves, Brazil lacks the space to refine oil it mines on its own soil. Consequently, the country must import a fourth of the 1.8 billion barrels of oil it uses daily. Much of Brazil’s natural gas is also imported. Brazil is a member of Mercosur, a regional free-trade pact that includes Argentina, Paraguay, and Uruguay.