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Brazil during the Great Depression
Transcript of Brazil during the Great Depression
Brazil depended a lot on coffee. Coffee was what dominated the Brazilian exports and were the source of over 70% of the country's revenue. To keep coffee prices high, goods were purchased by the Sao Paulo Institute in Brazil and withheld from the rest of the world. To pay for this, Brazil took out loans from foreign banks and received revenue from transportation tax.
This was called valorization, and it was dangerous because other countries increased their production of coffee and limited Brazil's dominance in that area. This was an economic cause.
In May 1929, the price of coffee declined drastically and Brazil had an overproduction of coffee, making it even worse. This led to Brazil's leading crop to not be useful in the economy and Brazil couldn't make money from it to pay back all the loans it made. This was an economic cause.
Causes of the Great Depression in Brazil
The national economic decline had a huge impact on businesses. Shop owners from all around Brazil reported a 40% decline in sales in Dec. 1929.
Around one million Brazilians were affected by the Depression, with rural workers now being landless laborers that planters couldn't pay anymore, so they had to be let go. Many tried to go to the city top find work, but failed and as many people that tried, the same number stayed behind in the rural areas unemployed.
Even the small fraction of Brazilians that were employed didn't get payed for months at a time. The Depression hit Brazil hard just like it did many other countries, with many people going unemployed and not being able to support themselves or others.
Effects of the GD in Brazil
Getulio Vargas was the president of Brazil while the Depression was going on in that time. (1930-1945 and then again elected again in 1951-54). Many people that advocated democracy saw him as a fitting leader.
Vargas implemented policies that supported the coffee industry while at the same time taking Brazil off of its dependency of coffee. Vargas created the National Department of Coffee that immediately called for a reduction in coffee-tree planting. In 1931 the government introduced a program of coffee burning that destroyed around 60 million bags of coffee by 1939 and decreased the surplus of coffee.
The government also diversified the economy. Dominance of coffee in Brazil's economy was slowly fading away and other crops were grown. Certain crops, like sugar, weren't grown as much since Brazil couldn't compete with other nations in the global market for it and grew other crops instead. Livestock and cotton production increased, as cotton went from being only 2% of exports to 18% contributing more than before.
Government also reduced imports by 75% from 1929-1932 and exports also fell, but not fast, leaving Brazil with a favorable trade balance through the Import Substitution Industrialization which is an economic policy that urges countries to not depend on foreign trade a lot and produce its own products with local industrialization.
Responses to the GD in Brazil
During the Great Depression, women were given a lot more responsibility. With all the reforms and programs to get Brazil out of the Depression, job opportunities were opened for them where they would work alongside men.
Women were also granted the right to vote in 1932 under Vargas as Brazil was slowly working on getting out of the Depression.
Impact of the GD on the Societies of Brazil
Cure to the Great Depression Brazil
Vargas had created an all new constitution for Brazil, established the 8 hour workday, and abolished child labor to help the economy.
The diversity in Brazil's economy also augmented it's progression out of the Depression. Industrialization started to grow in Brazil as the onset of World War II was apparent and exports were being made more and more to other nations for money. Brazil also went from relying on coffee to support its economy, to relying on a larger variety of crops and work other than agriculture for money.