Answer these questions Assignment Example | Topics and Well Written Essays - 1500 words

Answer these questions - Assignment Example Since Brazil dependent on primary commodities, it experienced a case of Dutch Disease during this time. Another obstacle towards Brazilian development was the elastic supply of labor. Initially Brazil took advantage of the import of slaves from Africa but with the abolition of slavery that Brazil tried to ignore for as long as it could, Brazil began to gain labor from Southern Europe. The plantation owners began to press the government to transport labor from southern Europe at low costs. Thus an elastic supply of labor was maintained which resulted in a stable labor costs. While labor costs should have increased with the abolition of slavery, Brazil managed to keep them down through its lax immigration laws. One obstacle to the development of Brazil was the high cost of transportation. The country depended on waterways for the transportation of labor and other commodities. But the topography is Brazil is such that these waterways are not strategically placed within the country. Also the flow of certain rivers did not allow for an advantage through water transportation. The other option available to Brazil was land transportation. Unfortunately, land transportation was not a feasible option as most roads were broken and vehicles could not pass by them. The high cost of transportation therefore led to a limited interregional and international trade. Agriculture producers were only limited to market in their immediate vicinity. The surplus that was being produced in certain areas could not be transported in such a manner as to profit the crop owners. The inelasticity of supply that generated as a result meant that prices would increase every time the demand of advanced products increased i n the market. Thus the domestic agriculture sector of Brazil was unable to flourish as a result of the inelastic transportation system within the country. Even though the government realized the impact of the under development