Impact of globalization

Introduction

Globalization is the intricate procedure of countries around the world becoming more entwined through international trade. For better and worse, this entwining then further affects other aspects of the local societies, indelibly changing their cultural and political landscapes (Doh & Luthans, 2018). These changes are naturally controversial, with the supporters of globalization believing that it brings financial gain to countries across the globe. Its opponents counter that it just helps the developed countries get richer, while leaving the less developed nations in the dust. Regardless of one’s perspective, everyone agrees that globalization has a large impact on the world’s economy, and the process is happening at a rapid pace thanks to the technology of the information age. It has had an especially big impact in South America’s Brazil.

Brazilian history

Before the globalized present, however, a look at Brazil’s past may prove helpful. Brazil is a treasure trove of diverse resources including valuable metals and agricultural products. This is why Portugal took an interest in colonizing Brazil. The indigenous people were forced into slavery to work the sugar cane farms that sent sugar back to Europe. France and Spain also took an interest in the natural riches, and also sent colonizers to Brazil and South America. Eventually, the slaves rebelled and won independence from their captors. Despite Brazil’s tumultuous past, it is now considered a developing nation, and is a melting pot of cultures and ethnicities. Catholicism is the main religion in the country, it has a relatively young working population, and the primary language is Portuguese. Doh and Luthans (2018) describe the country as having “the largest… and the most important economy in all of South America” (p. 386) however, its economic growth has waxed and waned due to inflations and recessions. Brazil is projected to potentially have a bigger presence in the international scene in oncoming years. Brazil’s economic success is due in part to having a relatively stable political situation, but that might change with their new incoming president.

Brazilian present: Bolsonaro

In Brazil’s recent presidential election, far-right candidate Jair Bolsonaro won the presidential election and is scheduled to take office in January. It has been an a global trend in recent years for far-right candidates to win out over left wing candidates, such as Donald Trump of the United States, and the Brexit vote of the United Kingdom. Bolsonaro is reportedly an ex-military veteran with very polarizing political beliefs who gained popularity in the polls after previous two presidents, Lula and his successor Rousseff, were both caught in huge corruption scandals, the latter involved in one with Venezuela (Watson, 2018). Brazilians also blamed the previous two presidents and their social democracy for the economic slump, due to being the dominant political party at the time, which lead to the political pendulum shifting from left to right. As Doh and Luthans (2018) point out, the political environment can have a huge impact on the citizens of a country, potential risks prospective multinational corporations look at, and how both domestic and international corporations conduct business.

Ecological

Even though Bolsonaro has yet to take office, his announced plans to clear more of the rainforests of Brazil are already causing impacts. According to Lopes (2018), due to Bolsenaro’s intentions when he gets in office, workers decided to get a head start and increased the rate at which deforestation of the rain forest took place more than doubled during the months leading up to Bolsonaro gaining most of Brazil’s support and winning the election. He plans on turning the cleared land into farmland, since agriculture is a large source of Brazil’s economy. He also promises that the plentiful resources of the rainforest would be for the country of Brazil, and not outside countries to reap. However, like the US President Trump, he does not believe climate change is a big issue, and instead sees it as a barrier preventing Brazil from growing economically. For this reason, he has threatened to leave the Paris Climate Accord, and is thinking of restructuring Brazil’s environmental agency to be included/handled by their agriculture agency (Lopes, 2018). This decision could make some multinational corporations leery of moving locations to Brazil if they are sensitive to investing in green solutions or ecological innovations.

Brazil’s borders contain a large amount of the Amazon rainforest, which is one of the largest rainforests in the world, and the flora that live there absorb large amounts of carbon dioxide, helping to reduce the carbon footprint. Not only would deforestation affect the amount of carbon dioxide, it is home to millions of species of animals that can only survive in the very sensitive ecosystem of the Amazon. With the forests being diminished every day, many species could be at risk of extinction, thus damaging the ecotourism of Brazil. While this may seem like a short-term good decision for the local loggers and Brazilian companies who use the resources harvested from the Amazon, it is also not good news for the indigenous tribes who still inhabit the forests.

Bolsonaro is also planning on allowing deforestation, industrial mining and farming to take place on the protected reservations of the indigenous tribes and describes the indigenous residents of the reservations as essentially being “animals on display in a zoo” (Phillips, 2018). He is also planning on making the human rights ministry that deals with indigenous people, dissolve, and letting the agricultural agency be in charge of that as well. The indigenous people are not forced to live on the reservations, but generally tend to stay on the reservations in order to preserve their culture and way of life. Allowing the deforestation and commercial activities raises concerns about the preservation of their cultures. Their health as well as mining is known to cause pollution due to dust and the by-products of the operations. Farming is also known to cause pollution of local water sources due to the run off of fertilizers and pesticides that could damage the delicate ecosystem and pollute much of Brazil’s waterways.

Technology

Technology has allowed Brazil to become a competitive country on the global stage. Improvements in biotechnological research and advances such as genetically modified seeds have allowed the agricultural sector to make the process of growing crops such as soybeans, coffee and corn more effective and efficient. They can now grow a larger quantity of crops that also have increased resistance to insects, and drought. This greater yield of crops can lead to increased exports which is great for Brazil as agriculture is one of its biggest exports.

While Brazil is reaping the benefits of technology, there is not an emphasis placed on technology and innovation, and it is difficult for research to occur there. Brazil is relatively new to the research sector and the economic instability of several recessions and bouts of inflation stunted the growth of this sector. According to Mari (2018), there is no communication going on between the main three stakeholders that are normally involved in research: privately owned businesses, government researchers and students doing research at universities. Alas, that is not the only problem as there is little motivation for people to conduct research, as there is a high tax to pay, and the financial incentives are not enough. Not to mention, with there being a focus on agriculture, the working population is not as trained or skilled to be able to work with technology and innovation.

Trade

Thanks to increased ease of global communication technology and more open trade policies, Brazil has been able to trade and compete on an international level, but their economic growth seems to have stagnated. As previously mentioned, Brazil has high tax rates, making goods expensive for other countries to import when they could get them from China for less. Brazil is also seen as a risky place for multinational corporations to try and do business due to the economic instability, tricky legal environment, and several corruption scandals.

Doh and Lutherans (2018) mention the massive corruption scandal involving not only the president at the time and the state-owned oil company, but numerous other companies. To get a feel for how expansive this scandal is, it has even been called the biggest corruption scandal in the country’s history. More recent investigations of the corruption have found that Odebrecht, a globally competitive Brazilian conglomerate that deals with commercial contracting and construction was also involved. The conglomerate was found to have paid bribes in order to secure numerous contracts across the globe (Gallas, 2018). Understandably, this scandal led to several multinational corporations to leave the country, and has left lasting impacts on the Brazilian economy that are still being resolved today.

Implications

Brazil is seemingly struggling to find the equilibrium between boosting the economy through agriculture and protecting the ecological environment. Brazil’s Future Orientation Score and Competitiveness ratings are both fairly mediocre. Brazil needs to either find a sustainable way to continue in the agricultural sector without putting the local ecosystem in danger, or they need to branch out. The country should start investing more heavily in technology and innovation, and making it a primary focus. They need to make the innovation and research process more integrated by encouraging stakeholders to communicate more openly, and offer better financial incentives to companies that get involved in research. Innovation is the future, and if Brazil wants to get out of the economic slump it has been in, technology is the way to go. They should take notes from fellow BRIC country India, and also try building up their telecommunications sector, and training citizens in information technology. It would also be advisable to train workers how to speak English, in order to make them a more appealing offshoring site to international businesses for services such as customer service.

Conclusion

Overall, Brazil with its rich expanse of natural resources and large economy has the potential to become a strong developed nation in a few decades. However, Brazil faces several hurdles it must overcome. It must find the balance between the economy and ecosystem, it must overcome the corruption scandals and gain back the trust of its people and international companies. Brazil should start focusing on branching out into other sectors, such as the technology sector, and would do well to train managers in how to fight corruption and improved skills in international management. It will be interesting to see how the incoming right-wing president’s policies will play out, and whether or not they prove to be profitable and ethical.

References

  1. Doh, J. P., & Luthans, F. (2018). International management: culture, strategy, and behavior (Tenth edition.). Retrieved from http://www.worldcat.org/title/international-management-culture-strategy-and-behavior/oclc/989951843?referer=di&ht=edition
  2. Gallas, D. (2018). Brazil’s Odebrecht corruption scandal – BBC News. Retrieved December 9, 2018, from https://www.bbc.com/news/business-39194395
  3. Lopes, M. (2018). Activists feared Brazil’s Bolsonaro would accelerate Amazon deforestation. Now they think it’s already happening. – The Washington Post. Retrieved December 8, 2018, from https://www.washingtonpost.com/world/2018/12/07/activists-feared-brazils-bolsonaro-would-accelerate-amazon-deforestation-now-they-think-its-already-happening/?noredirect=on&utm_term=.14dd056a0acc
  4. Mari, A. (2018). Why Is It So Hard To Innovate in Brazil? The Legal Issues. Retrieved December 9, 2018, from https://www.forbes.com/sites/angelicamarideoliveira/2018/07/10/why-is-it-so-hard-to-innovate-in-brazil-the-legal-issues/#3edff3d6a6fa
  5. Phillips, D. (2018). Bolsonaro abolishes human rights ministry in favour of family values | World news | The Guardian. Retrieved December 8, 2018, from https://www.theguardian.com/world/2018/dec/06/outcry-over-bolsonaros-plan-to-put-conservative-in-charge-of-new-family-and-women-ministry
  6. Watson, K. (2018). Jair Bolsonaro: Far-right candidate wins first round of Brazil election – BBC News. Retrieved December 8, 2018, from https://www.bbc.com/news/world-latin-america-45780176
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