The United States, China, and Japan are the world’s three largest economies in terms of nominal GDP. A variety of factors influence economic growth and prosperity, including workforce education, production output (as indicated by physical capital investment), natural resources, and entrepreneurship. As outlined below, the economies of the United States, China, and Japan each have a unique blend of key elements that have led to economic growth over time.
United States
Since 1871, the United States has been the world’s greatest economy. The United States’ nominal GDP is $21.44 trillion. The GDP of the United States (PPP) is also $21.44 trillion. In addition, the US is rated second in the world in terms of the estimated value of natural resources. The worth of natural resources in the United States was projected to be $45 trillion in 2016.
The powerful economy of the United States is due to a number of causes. The United States is well-known around the world for developing a culture that supports and encourages entrepreneurship, which fosters innovation and, in turn, economic prosperity. The workforce in the United States has become more diverse as a result of the country’s rising population. The United States also has one of the world’s most advanced manufacturing industries, second only to China. In addition, the US dollar is the most extensively utilized currency for international transactions.
China
Between 1989 and 2019, China, the world’s second-largest economy, experienced an average growth rate of 9.52 percent. China has the world’s second-biggest economy in terms of nominal GDP ($14.14 trillion) and the largest in terms of GDP (PPP) ($27.31 trillion). China’s natural resources are estimated to be worth $23 trillion, with rare earth metals and coal accounting for 90% of the total.
China’s 1978 economic reform initiative was a huge success, resulting in an increase in average economic growth from 6% to over 9%. The reform program prioritized the establishment of private and rural enterprises, the relaxation of governmental price rules, and investments in workforce education and industrial output. Worker efficiency is another driving element behind China’s economic success.
Japan
With a GDP of $5.15 trillion, Japan is the world’s third-largest economy. Japan’s Gross Domestic Product (PPP) is $5.75 trillion. Because Japan’s economy is market-driven, businesses, production, and prices change in response to customer demand rather than government intervention. While the Japanese economy was struck hard by the 2008 financial crisis and has been slow to recover since then, the 2020 Olympics are projected to provide it a boost.
The electronic products sector, which is the world’s largest, and the automobile industry, which is the world’s third largest, are the backbones of the Japanese economy. The Japanese economy confronts significant hurdles in the future, including a dwindling population and an ever-increasing debt, which is at 236 percent of GDP as of 2017.
Germany
With a GDP of $4.0 trillion, Germany has the world’s fourth-largest economy. Germany has a GDP (PPP) of $4.44 trillion and a per capita GDP of $46,560, making it the world’s 18th most prosperous country. The highly developed social market economy of Germany is Europe’s largest and strongest, with one of the most trained workforces. Germany accounted for 28 percent of the euro area economy, according to the International Monetary Fund.
Car manufacturing, machinery, home equipment, and chemicals are among Germany’s significant industries. The economy suffered a substantial setback following the 2008 financial crisis due to its reliance on capital goods exports. Due to the Internet and the digital age, the German economy is currently in the midst of its fourth industrial revolution. This change is known as Industry 4.0, and it encompasses solutions, processes, and technologies, as well as the usage of IT and a high degree of system networking in factories.
India
With a GDP of $2.94 trillion, India’s economy is the world’s fifth largest, surpassing the United Kingdom and France in 2019. India’s GDP (PPP) is $10.51 trillion, which is higher than Japan’s and Germany’s combined. India’s GDP per capita is $2,170 (for contrast, the United States’ GDP per capita is $62,794), owing to the country’s large population. However, India’s real GDP growth is forecast to slow for the third year in a row, from 7.5 percent to 5 percent.
From its earlier autarkic practices, India is evolving towards an open-market economy. Industrial deregulation, fewer controls on foreign trade and investment, and privatization of state-owned firms were all part of India’s economic liberalization in the early 1990s. These policies have aided India’s economic development. India’s service sector is the world’s fastest-growing sector, accounting for 60% of the economy and 28% of employment. Manufacturing and agriculture are two more important economic sectors.
United Kingdom
The United Kingdom is the world’s sixth-largest economy, with a GDP of $2.83 trillion. The UK is ranked ninth in terms of GDP purchasing power parity (PPP) with a GDP (PPP) of The United Kingdom is rated 23rd in the world in terms of GDP per capita, with $42,558. By 2023, the UK’s GDP is anticipated to drop to $3.27 trillion, making it the world’s seventh-largest economy. In 2016, the United Kingdom was the world’s tenth-largest exporter of products, sending commodities to 160 countries. The United Kingdom was the first country to industrialize in the 18th century.
The service sector, notably the financial services industry, dominates the UK economy, accounting for over 80% of GDP. London is the world’s second-largest financial center. Manufacturing and agriculture are the UK’s second and third major industries, respectively. Britain has the world’s second-largest aerospace sector and the tenth-largest pharmaceutical business.
France
France is Europe’s third-largest economy (after Germany and the United Kingdom) and the world’s seventh-largest economy. The nominal GDP of France is $2.71 trillion. France has the 19th largest GDP per capita in the world, at $42,877.56, and a GDP (PPP) of $2.96 trillion. According to the World Bank, France has sadly faced high unemployment rates in recent years, with unemployment rates of 10% in 2014, 2015, and 2016, and 9.681 percent in 2017.
The economy of France is a diverse, free-market-oriented economy. Agriculture and tourism, as well as the chemical industry, are important sectors for France. France owns nearly a third of the European Union’s agricultural land and is the world’s sixth-largest agricultural producer and second-largest agricultural exporter, after the United States. France is the most visited country in the planet. With 28 of the 500 largest firms, France is ranked fifth in the Fortune Global 500, behind the United States, China, Japan, and Germany.
Italy
Italy is the eighth-largest economy in the world, with a nominal GDP of $1.99 trillion. Italy’s economy is worth $2.40 trillion in PPP terms, with a per capita GDP of $34,260.34. By 2023, Italy’s economy is predicted to grow to $2.26 trillion. Unfortunately, Italy has a comparatively high unemployment rate of 9.7% and a debt level of 132 percent of GDP.
Italy’s exports, fortunately, are assisting in the recovery of the economy. Italy is the world’s eighth-largest exporter, with 59 percent of its exports going to other European Union members. Italy was predominantly an agrarian economy before World War II, but it has since evolved into one of the world’s most advanced nations. Italy is the European Union’s second-largest exporter, trailing only Germany, and has a huge trade surplus thanks to its exports of machinery, vehicles, food, apparel, luxury products, and other items.
Brazil
With a nominal GDP of $1.85 trillion, Brazil is the ninth largest economy in the world and the largest in Latin America. Brazil is also Latin America’s largest and most populous country. Brazil has a per capita GDP of $8,967 and a GDP (PPP) of $2.40 trillion, ranking 73rd in the world. Natural resources worth an estimated $21.8 trillion in the country include large deposits of timber, uranium, gold, and iron.
Brazil is a free-market economy in the early stages of development. Brazil was one of the world’s fastest-growing major economies from 2000 to 2012. Brazil, on the other hand, has one of the world’s most unequal economies. The economic crisis, corruption, and a lack of governmental policies all contributed to an increase in the poverty rate in 2017, and many people became homeless. Six billionaires in Brazil alone are wealthier than more than 100 million of the country’s poorest citizens.
Canada
With a nominal GDP of $1.73 trillion, Canada is the world’s tenth-largest economy. Canada’s per capita GDP of $46,260.71 places it 20th in the world, while its GDP (PPP) of $1.84 trillion places it 17th. By 2023, Canada’s GDP is predicted to reach $2.13 trillion.
With a $33.2 trillion projected worth of natural resources, Canada ranks fourth in the world. Because of its abundant natural resources, such as petroleum and natural gas, Canada is regarded as an energy superpower. Canada is one of the least corrupt countries in the world and one of the top 10 trading countries, according to the Corruption Perceptions Index. On the Index of Economic Freedom, Canada outperforms the United States and has a low degree of economic inequality.
Is Brazil the world’s seventh-largest economy?
Brazil is the world’s seventh largest economy, with a Gross Domestic Product (GDP) of $2.4 trillion, accounting for more than 40% of Latin America’s GDP.
Brazil is the world’s seventh largest consumer market, and will be the fifth by 2023. 30 million Brazilians have joined the middle class in the last decade.
Brazil’s 7,400-kilometer coastline allows for easy access to North America, Europe, and Asia. It also shares borders with ten South American countries.
Brazil received more than US$62 billion in new investment in 2014, making it the world’s fifth largest recipient of FDI.
Brazil is the world’s greatest exporter of meat, coffee, and sugar, as well as soya beans and iron ores. It is also the world’s sixth-largest aircraft exporter.
Brazil has Latin America’s second-largest trade flow, at U$454 billion in 2014.
What accounts for Brazil’s high GDP?
Brazil’s largest sector, the services industry, accounts for over 65 percent of the country’s GDP. 7 The service sector, which has contributed more than half of the country’s GDP since the 1990s, has absorbed the declining contribution of agriculture and industry throughout time.
Is Brazil a wealthy or impoverished country?
Brazil is a wealthy country with a large poor population and a wealthy elite. Forbes’ 2019 list of the 206 billionaires (in reais, equivalent to $200 million) shows that they are doing well, with their wealth up 24% from last year. With the epidemic, 42 prominent billionaires saw their personal fortunes soar by $34 billion in four months in 2020, while the economy was in free collapse. This sum is the same as six years of the Bolsa Famlia program, which lifted fifty million people out of poverty.
This demonstrates a negative relationship between the country’s economic progress and the riches of the wealthy. However, it raises issues about what the elites are doing, because the connection should be positive if they are investing in production and employment creation. We may get a better picture of how the country’s resources are being spent by taking a closer look at how they are being squandered.
Employment
Unemployment is a family drama; also, it demonstrates that the country is squandering chances, as a person out of the labor field represents a loss of potential economic contribution. Brazil has a population of 212 million people and is expanding at a rate of roughly 1.7 million people per year. However, total formal private employment was 33 million before the pandemic, compared to 140 million people and 105 million workers. If we include 11 million people employed in the public sector, the overall number of people employed in the formal sector is just 44 million, or 42 percent of the workforce. Around 40 million people work in the informal economy to supplement their income, whereas 14 million people are officially unemployed. According to official figures, the informal sector’s average income is roughly half that of the formal sector. 1
This is a staggering waste of potential productive capacity, largely owing to poor management. Almost all of Brazil’s 5,570 municipalities have a similar problem: massive labor underutilization and barren territory around cities: a green belt of small-scale food-producing agriculture is an apparent solution, providing jobs, food, and cash. Maintenance, arborization, sewage improvement, and a slew of other activities aimed at improving systemic local productivity are all apparent options, with the end consequence being greater financial balance. How would we rate a company that only employs half of its workforce?
Land
Another facet of underutilization of productive potentials is revealed by the 2017 agricultural census. A total of 353 million hectares are covered by farming units. Although 225 million of these are suitable for agricultural use, the total area covered by temporary and permanent agriculture is just 63 million hectares. This equates to over 160 million hectares of idle or poorly underutilized land in Brazil, which is five times the size of Italy. The government’s stance about permitting the Amazon forest to be torn down to make room for production is ludicrous.
Rent-seeking urban elites possess the majority of agricultural land, which they neither utilize productively nor allow others to use. Another section is used for free-range cattle farming, with a hectare allotted for each head. Simple enactment of the existing land tax (Imposto Territorial Rural ITR), which is now being ignored by landowners, would encourage them to either make their land profitable or sell it to someone who will. The peasants’ lengthy and deadly war for land is impressive, but the necessity to fight for it is ludicrous, given the amount of agricultural land that isn’t being utilised.
Capital
The underutilization of two of the most important development resources, labor and land, is a fundamental feature of Brazilian society. Slavery was abolished only at the end of the nineteenth century, and landowners at the time declared that freed slaves should not be allowed access to their own land because “who would work on ours?” The division that resulted, between export-oriented monoculture and family farming, persists to this day.
But the underutilization of capital, which occurs as a result of financialization, diverts resources from productive investment to financial speculation, is just as important. Debt, dividends, real estate, and other extractive activities are the primary sources of wealth for the 206 billionaires listed above. Michael Hudson puts it succinctly:
Real estate tax breaks, privatization of oil and mineral exploitation, banking monopolies, and infrastructure monopolies all raise the cost of living and conducting business. Bank debt, school debt, and credit-card debt are increasingly exploiting labor, while housing and other prices are inflated on credit, leaving less money to spend on goods and services. 2
He writes about capitalism in general, but it has taken on a monstrous form in Brazil. This is critical because productive capital may be chastised for paying low wages, but in order to exploit workers, new jobs must be created. Families, businesses, and the government are all drowning in debt as a result of financial capitalism. Instead of providing resources for the country’s growth, extractive businesses like Petrobrs or Vale now prioritize profits to national and international financial interests as a result of privatization. Capital flows to places where it can earn the most rent, not to places where it can be more productive.
Science and technology
Since 2016, Brazil’s investment in science and technology has been frozen, scholarships have been reduced, the Cincia sem Fronteira program which sends students to top universities around the world has been suspended, and technological centers of excellence, such as those at Petrobrs and Embraer, have been reduced. Many new universities were established under the Lula and Dilma administrations, more than doubling the number of students. Brazil boasts a number of world-class research institutes that are now operating on a shoestring budget.
All of these programs were cut in the name of “austerity” and “responsible fiscal policy,” which is devastating in a country like Brazil, which has a large semi-literate population in the face of new technologies. One-third of the population has been shut out of digital inclusion, which is in the hands of an oligopoly led by Carlos Slim and other magnates. One of the key initiatives of the Lula administration was to use the proceeds from oil and iron ore exports to support scientific growth in the country; now that Petrobrs and Vale have been privatized, they are producing dividends. The country’s long-term structural consequence is terrible.
Public policies
The Covid-19 crisis demonstrated the turmoil that can come from a lack of dynamic cooperation and preparation at many levels of government. Mariana Mazzucato has demonstrated the significance of public policy in important development areas. It’s not about “big government,” but about critical regulation and coordination, as well as direct provision of essential social services like education, health, security, and environmental protection. Taking money away from the public health system (SUS) in the midst of a pandemic has resulted in hundreds of thousands of fatalities and forced more people to pay for private health-care firms, many of which are international corporations.
The official line is that we should leave the problem-solving to the markets, which is a distant echo of Ronald Reagan’s 1980 vision. What works is a balanced partnership between the government, business, and civil society organizations, as well as a strong decentralization of government management, so that public policies and corporate operations are responsive to the economic, social, and environmental challenges we confront. Poverty, unemployment, and other social issues have no economic basis. Mismanagement is the main problem, with an elite incapable of looking beyond the next quarter’s financial performance.
Brazil is a wealthy country; with a GDP of 1.8 trillion dollars in 2019, we generate the equivalent of 3,000 dollars each month for a four-person family. However, when we consider the underutilized labor force, underutilized agricultural land, capital diverted to financial rentiers, regressive science and technology policies, and inept centralized public management in the hands of elites, we have a better understanding of the current political and social structures’ overall irrationality.
Why is Brazil so impoverished?
Brazil is the world’s fifth-largest country in terms of population (about 210 million people) and land area (3,287,597 square miles). It is also home to the world’s seventh largest economy and the 2016 Olympic Games. Despite these achievements, Brazil is still recovering from the worst recession in its history. While Brazil is not impoverished, its poverty rate is far higher than the average for a middle-income country. “Why is Brazil poor?” is a question that has three answers.
1. Land Distribution Inequality
According to USAID, land distribution disparity is a major contributor to Brazil’s poverty levels. Brazil’s poor have limited access to desirable land, with NPR reporting in 2015 that 1% of the population holds 50% of the country’s land.
This indicates that 2 million persons (out of 210 million) possess half of the country’s land area. The remaining 99 percent have limited access to land, making it difficult for them to better their economic situation. When it comes to land distribution, Brazil is one of the most unequal countries on the planet.
2. Formal education
The city of Rio de Janeiro’s education secretary, Claudia Gostin, told the Global Post that Brazil is experiencing educational apartheid. Apartheid is a system that divides individuals based on race, ethnicity, or social class. Brazilian schools are divided by class and, in some cases, race.
According to the Global Post, in Brazil, class divides begin at the age of five. Brazilian youngsters are either sent to decrepit public schools that prepare them for mediocrity or to high-quality private institutions that prepare them for upper-echelon jobs in society, depending on their socioeconomic status. Brazilians from the lower classes are taught by second-rate teachers in under-resourced classrooms with shorter school days than their peers. As a result of these issues, many students drop out or graduate unprepared to compete for high-tech employment in the white-collar workforce.
Furthermore, Brazilians who identify as black or brown and make up more than 50% of the population earn half as much as whites. As a result, Brazil’s black and brown population remains impoverished and at the bottom of the social totem pole.
Corruption is number three.
According to the CIA World Factbook, various corruption scandals involving private corporations and government officials have harmed Brazil’s economy. Penalties imposed on the corporations implicated some of Brazil’s largest – curtailed their commercial options, affecting related businesses and contractors.
Furthermore, due to the scandals, investment in these companies has decreased. As a result, corporations involved in the scandals have lost jobs, which has had a severe impact on the country’s disadvantaged population. According to Corporate Compliance Insights, oil business Pertrobras was the country’s largest corporation and investor, accounting for 10% of the country’s GDP in 2015, but due to a corruption scandal within the company, Brazil lost 27 billion (at least 1%) of its GDP. The corporation also cut its personnel by 34%, and fewer employment mean fewer prospects for the impoverished in Brazil to improve their situation.
So, what’s the deal with Brazil’s poverty? The impoverished in Brazil are trapped in a cycle of poverty due to a long history of inequality in the country. Race, class, education, land, and government are all sources of power in Brazil that determine where wealth is kept.
Despite its background, there is still hope for Brazil’s poor. Because of well-funded pensions, poverty among the elderly has been practically eradicated. Furthermore, government-funded initiatives such as Bolsa Familia have lifted tens of millions of people out of poverty, with more than half of the Brazilian population being classified as middle class.
Expanding educational possibilities, gaining access to land, and reducing government corruption will help to create a more fair Brazilian society.
Is Brazil classified as a third-world country?
Brazil is still classified as a third-world country, despite the fact that it has become more industrialized. GDP is the major factor that separates underdeveloped countries from developed countries. Brazil is classified as a developing country, with a per capita GDP of $8,727.
What is Brazil’s most important product?
Brazil is the world’s leading coffee bean producer. Brazil produces the most coffee in the world, and it was the country’s most important single export in the early and mid-twentieth centuries. The main coffee-producing states are Minas Gerais and Esprito Santo, followed by So Paulo and Paran.
Is Brazil a powerful nation?
Brazil is the most powerful country in South America, a rising economic force, and one of the world’s largest democracies. It has made significant progress in recent years in its attempts to lift millions of people out of poverty, yet the wealth gap between affluent and poor remains vast.
Is Brazil more prosperous than India?
Economic Growth Comparisons 9 Brazil, on the other hand, is significantly wealthier per capita. India’s growth looks to be fueled by increased exposure to overseas markets. According to World Bank estimates, exports accounted for around 18.1 percent of India’s GDP in 2020, compared to 16.9 percent for Brazil.