Overview of Sao Paulo


Economy of Sao Paulo


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Brazil

There is a Brazilian saying, "Brazil is the land of the future, and always will be." The country has striven to not only meet the market, but to be proactive and produce its own success. Brazil has become South America's most expensive country. Its currency, the Real (or reais in Brazilian Portuguese), has held steady and the economy continues to blossom. The country holds the world's 11th largest economy with agriculture and agribusiness being key elements to Brazil's success. There are moderately free markets and an inward-oriented economy. Its gross domestic product surpasses $1.6 trillion dollars making it the eighth in the world and the second in the Americas in the World Bank ranking.

On a country wide level, there continue to be issues with vastly unequal income distribution. While some Brazilians earn large fortunes because of the multitude of natural resources and large labor pool, many more Brazilians do not experience much economic success.

The Programa de Aceleracao do Crescimento (PAC) is a major investment plan of the Government of Brazil. The purpose of the organization is to promote investments of 503.9 billion reais in construction, sanitation, energy, transport and logistics in the 2007-2010 quadriennium. Accusations from opposition parties have called the PAC as a publicity stunt.

Sao Paulo

As well as being Brazil’s largest industrial, commercial and services centre, the state of Sao Paulo is also the country’s prime agricultural producer. Coffee was Brazil’s main export from the second half of the 19th century until the first decades of the 20th century. Brazilian agriculture has become progressively more diversified but coffee remains the most important agricultural product. Vast tracts of overexploited land have been reconverted to coffee growing thanks to organic and chemical fertilization. Another important crop in the Sao Paulo region is oranges, and the combination of good natural conditions and modern processes of seed selection and fertilization have helped Brazilian producers to become some of the most efficient in the world. Sao Paulo state is the largest producer of sugar cane in the country. In the past cane primarily served the demand for sugar in Europe, but in recent years a sizeable proportion has been reserved for the production of ethanol which is used as motor fuel.

Following the crisis in the coffee trade provoked by the stock market crash of 1929 cotton was chosen as a replacement crop. Cotton plantations occupy the western zone of Sao Paulo state, which had not previously been developed by the coffee growers. Other important crops are corn (usually destined for cattle consumption), soy, bananas and rice. There is a so-called green belt around metropolitan Sao Paulo which has mostly been cultivated by Japanese immigrants and supplies fresh salad and vegetables to the city of Sao Paulo.

The abattoirs of Sao Paulo receive cattle from ranches in the neighbouring states of Minas Gerais, Goiás and Mato Grosso do Sul. The cities around Sao Paulo state such as Barretos, Araçatuba, Andradina and São José do Rio Preto are important beef centres, and trucks carrying meat goods depart from there to feed the consumer markets of São Paulo and Rio de Janeiro. The region of Vale do Paraíba, near the border with Minas Gerais, is known for its dairy farms.

Sao Paulo is by the far the most important industrial state in Brazil and industrial activity is focused on the cities known collectively as Grande São Paulo - São Paulo itself, Santo André, São Bernardo, São Caetano, Diadema (known as ABCD), Guarulhos, Osasco and Suzano. Brazil’s important aerospace industry is based in the Vale do Paraíba, between the cities of São Paulo and Rio de Janeiro. Campinas has several universities and attracts the technology industry. Ribeirão Preto is the country’s largest producer of sugar and alcohol, and Franca in the far north is famous for its shoes and leather products.

Unsurprisingly Sao Paulo is the largest consumer of energy in Brazil, but almost 90% of its energy needs are catered for by hydroelectricity plants located across the state. Sao Paulo imports energy from other Brazilian states to supplement its needs; technically speaking half of the Itaipu electricity plant, Brazil’s biggest, belongs to Paraguay. Oil prospecting in the 1970’s revealed that Sao Paulo has negligible petroleum resources, but Sao Paulo state still boasts four refineries, more than any other. In recent years thermal plants have been built in order to reduce dependence on hydroelectricity which is greatly influenced by rainfall. Big industries such as the steel mills are becoming increasingly reliant on natural gas.

Due to overcrowding in the city of Sao Paulo successive governments have introduced incentives, such as tax breaks and free real estate, to encourage people to settle in other towns. Thanks to São Paulo’s superior infrastructure in terms of telecommunications, energy supply and transportation, it is nonetheless set to remain Brazil’s commercial hub for the foreseeable future.

Update 13/12/2010

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