Argentina Vs. Brazil - Compare Sociological/economic Data

In lieu of class today, please visit the the Central Intelligence Agency (CIA) website:  https://www.cia.gov/library/publications/resources/the-world-factbook/docs/profileguide.html

Follow the following directions:

1.  Use the CIA World Fact Book (either the Country Profile or the Country Comparison links found under the references tab).

2.  Pick at least two (2) countries.

3.  Compare sociological / economic data choosing at least two data categories of your choice. For example you could compare two countries across "People and Society" and "Government" or "Economy" and "Energy"

4.  From what you have learned in the course thus far, and from the Chapter 8 reading (electronic chapter uploaded on Blackboard) - which country do you think might have the better chance of moving up the Global value chain? which country has the better chance of industrial upgrading?  Aside form the CIA website you can feel free to use an external news source if needed.

Let me know if you have any questions.  This is a graded assignment and will count towards your final grade in the course.

Governmen

The governments of Brazil and Argentina are very similar in structure. The Argentine government is a republic based on the West European legal systems. The president (Fernandez de Kirchner) is both the chief of state and the head of government, and is advised by a hand-chosen cabinet. Much like the US, the president and vice-presdient are elected on a ticket for 4 year terms by democratic vote. Brazil also uses a republic structure, and is divided into 26 states and 1 federal division. Like Argentina, the President (Dilma Rousseff) operates as the chief of state and head of government. Legislative power is given to the National Congress, which is a two-chamber legislature composed of the Federal Senate and the Chamber of Deputies. The Federal Constitution supplies the law of the land.

As the biggest economy in South America, Brazil features a rapidly expanding middle class driven by large and well-developed agriculture, manufacturing, mining, and service sectors. After being hit hard by the global recession in 2008, Brazil was one of the first countries to show a strong recovery, seeing a 7.5% growth in GDP in 2010. Because it has a historically high interest rate, Brazil is a very attractive destination for foreign investors.

Argentina’s economy has been hit hard by multiple crises in the 20th century, though there have been signs of economic growth in recent years. After a severe depression and political unrest, the Argentine economy was victim to an unprecedented bank run that resulted in over 50% of the population being considered under the poverty line.

Argentina has a significantly smaller GDP when compared to Brazil (771 billion to 2.416 trillion), which are the 8th and 23rd biggest in the world. Argentina’s smaller economy is grower at a faster rate, however, with a 3.5% real growth rate compared to Brazil’s 2.3%.

As a member of the BRIC nations (Brazil, Russia, India China), Brazil has much more economic potential than Argentina for moving up the global value chain. With an abundance of raw materials, low-wage workers, capable manufacturers and large domestic markets, Brazil has seen a large increase in their net exports greatly in the 21st century. Brazil’s “export profile” primarily deals with the production of relatively low-level materials, ie raw/slightly developed materials that are processed by other countries to turn into final goods. It is one of Brazil’s primary goals to increase the technological content of their exports (increasing value), and there has been noted progress in diversification, technological learning, and industrial upgrading. The exports of Argentina, like Brazil, are used primarily as intermediate products by other countries. Both countries have large amounts of natural resources, which are the first component on the GVC. Argentina also participates in a number of manufacturing GVCs related to food, chemicals, and transport equipment. Unlike Brazil, however, there has not been much evidence of a yearning to increase their technological output and industrial capacity to move up the global value chain, as they rely on entirely raw and natural exports more than Brazil. Industrial upgrading, which is roughly defined as the increase in productivity, product quality, and export performance among manufacturing firms, seems to be playing a larger role in the Brazilian economy than in the Argentinian one. With investment into the industrial capacity of Brazil in the hopes of rising up on the global value chain, they show a much higher level of ‘industrial upgrading’ than the relatively stagnant industry of Argentina’s raw material focused exportation.