Brazilian Miracle

Brazilian Miracle
The Brazilian Miracle was a period of exceptional economic growth in Brazil during the rule of the Brazilian military dictatorship, 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.
James Petras argues the short-lived economic miracle in Brazil was based on: 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, and the official adoption of the slogan "Brasil, ame-o ou deixe-o" ("Brazil, love it or leave it") by the Brazilian military government.
According to Elio Gaspari, in his book A Ditadura Escancarada: "The Brazilian Miracle and the Years of Lead happened simultaneously. Both were real, coexisting and denying each other. More than thirty years later, they continue to do so. For every person who thinks one existed, there is a person who doesn't believe (or doesn't like to admit) the other one happened."
Background
During the presidency of João Goulart, the economy was nearing a crisis, and the annual inflation 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 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 and Petrobras. 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 and borrowing. However, the 1973 oil crisis 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, which led to years of recession and hyperinflation.
References
Economic history of Brazil
1960s economic history
1970s economic history
Post–World War II economic booms