The problem of maintaining stable financial conditions has arisen in the last decade in the presence of an incredible demographic push. Therefore, maintaining a high rate of economic development has been sacrificed, more or less deliberately, to internal financial stability. For Brazil 2003, please check computerannals.com.
State investment commitments have resulted in an almost uninterrupted series of budget deficits, with the exception of the years 1951 and 1952, which have been the largest in the past three years. The coverage of government expenditures in excess of revenue took place mainly through inflationary means. These took the form of credits to the public sector by monetary authorities, credits which in the decade rose from a consistency of 19.3 billion cruzeiros at the end of 1949 to 221.7 at the end of 1959 (about 11.5 times).. The variation in bank loans to the economy was of lesser magnitude (approximately 7.2 times), the rate of which has, however, intensified in recent years. From the offer point of view, the
Financial relations with foreign countries were characterized by the prevalence of negative balances in the current balance of payments and by a highly variable contribution of foreign capital over the years. If the economic development of Brazil has been favored by the government policy of import controls and, starting from 1957, by a highly protective tariff of local industries, it can be said, however, that these interventions have contributed to increasingly isolating the economy Brazilian. The shortage of availability abroad, which occurred during most of the period, did not allow for an adequate capitalization process. On the other hand, the consequent contraction in imports of non-essential goods has favored the development of domestic production of consumer goods. Despite the government’s efforts to diversify exports as much as possible – and thus to ensure a less variable flow of foreign currencies – the exchange possibilities of Brazil depend, as in the past, on three main products: coffee, cotton and cocoa. whose prices have not ceased to decline on international markets. For coffee, the world overproduction crisis was especially felt by Brazil due to competition from the African product and the current level of changes judged too high by exporters.
For the financing of the five-year plan announced by President J. Kubitschek in January 1956, the Banco Nacional de Desenvolvimento Econômico was strengthened, established in 1952. The purpose of the new body is to provide its financial assistance for the development of communication, the scarcity of which still represents one of the most serious problems in the country. Initially, the Bank operated with funds collected through forced loans borne by taxpayers, for quotas established in proportion to the income tax paid. Banco currently operates as a state tax agent for the collection of special taxes that the law, together with other funds, has assigned to it for its institutional purposes. In addition to the Banco are made flow the revenues from agricultural surpluses sold by the United States.
In recent years, the spread of inflationary impulses has imposed a restrictive action on public and private spending, assisted by a large contribution of foreign credits (by the United States).
In addition to the credit and public finance spheres, various restrictions have also been implemented in the area of foreign trade and currency policy. With the customs reform of August 1957, the system of specific tariffs was replaced with the ad valorem one ; with fees scaled from 150% to zero, so that the regulation of exchange rates has partly ceased to play a fiscal and protectionist role. The exchange system has also undergone significant changes, again in order to strengthen exports and further limit imports, including those of capital goods which, before October 1958, had enjoyed preferential treatment.
Currently, the official exchange rate of the cruzeiro against the US dollar is 18.50. But it is increased to exports by means of premiums which vary according to the products. In July 1959, these premiums were set for two distinct categories of products, with the practical effect of creating three exchange rates for exports: 76 cruzeiros per dollar for coffee and cocoa exports, 100 cruzeiros for those of cotton, tobacco and other agricultural and mining products, and the free exchange of the market, already established in 1953, for the others. On importation, the exchange rate is fixed through weekly auctions in which the state offers the “promessas de venda de cambio” for sale. The result is a particular change from time to time, different according to the nature and origins of the imported products, and consisting of the official one, increased by the cost of the aforementioned certificates. The price difference realized between the sales revenues and the cost paid to exporters constitutes a net gain for the benefit of the state.
The auction trading system already practiced for dollar certificates was extended in 1955 to certificates in other currencies for imports from other countries (including Italy) which together form the so-called limited convertibility area (ACL). Starting from 1959, the auction market for the two types of certificates was unified; the import from the two areas can therefore be carried out either with certificates in dollars or with those drawn up in any other currency of the countries participating in the ACL