Foreign Investment in Brazil

The nation we know today as Brazil was discovered for Europe in 1500 by Portugal. Prior to colonization, Brazil was a nation comprised of hunter-gathers that were moving towards new agricultural technology. Brazilians had no towns or domestic animals to sustain their economy, they were illiterate men and women striving to survive every day. When Portugal began to dominate, the discovery of gold took over Brazil’s agricultural based economy. Even with Brazil’s independence in 1822, slavery and other forms of oppression were still prominent because of an already established caste system. Throughout all the changes in Brazil’s governmental structure and economic status, it is clear that the increased investment of foreign capital has caused an influx of brutality and unlawful actions to their people. The desire for foreign nations like Portugal to extract more precious minerals gave way to the African slave trade as well as enslavement of indigenous people. History presents two viewpoints about the importance of understanding the global impact that mining has on the worldwide economy; the point of view from Chief Executive Officers of multinational mining corporations and the point of view from young adults working in the mines. Bringing to light these differing perspectives connects the desires of the two parties and shows how the struggle regarding mining became a worldwide issue.

Portugal’s Foreign Investment in Brazil During the Late 17th Century

The first gold rush in Brazil took place in 1693-1695 finding most of the precious metal in the coastal areas inland. The popularity and knowledge for gold increased causing masses of people to gather to mining towns with the hope of making large profits. Eventually, the gold started to become less plentiful which pressured the leaders of the gold mines to come up with more creative ways for extraction. Foreign investors with large amounts of capital became very interested in the industry and began to buy large portions of land to sustain the functions of massive mines. Labor required in the more advanced mines grew dangerous with the overwhelming competition surrounding the area. Soon, shipments of slaves brought by multinational corporations from Africa were brought over to Brazil to create a work force that could be abused.

In order to understand the magnitude of this population boom in Brazil due to the gold rush the land known as Minas Gerais underwent dramatic changes in their community and governmental structure. What was once a quaint, calm metropolis converted into a problematic state of confusion and disorganization between government officials and inhabitants. A quote from former government official José João Teixeira Coelho describes the turmoil well, “The majority of the inhabitants of this captaincy either have come directly from Europe or are born of Europeans. They arrive here excited and with the hope of advancing their fortunes.” (Skidmore, Chapter 6) noticing that the prominence of the mines has completely taken over the culture and citizenship of Brazil. Later in his address he reveals that while some perceived the Portuguese men as high class they were really the “scum of the masses” and “despair of the elite”, that took what wasn’t theirs and tortured indigenous people (Skidmore, Chapter 4). They are bringing criminal behavior and acts that are not ideal for a fluid and steady society. This strong incentive by foreign entities to maintain strength in the gold mining industry dismisses the impact that their influence could have on the people of the nation.

As the stress of managing the extraction of gold heightened and the amount of enslaved peoples increased through the early 18th century, government officials of Minas Gerais implemented laws requiring a passport to be signed by governor-general of Bahia, Rio de Janeiro. This regulation was ordered to reduce the number of slaves imported to Brazil, but due to the influx of people from the gold it was difficult for authorities to check every individual. Another way around this law was for large multinational corporations to pay large sums of money to governmental regulators to illegally import their slaves. Despite regulations on the books, thousands of slaves were found working in mines. The incentives were substantial; some mining corporations would pay their housing and for families to be sheltered, fed, and cared for while they were out working brutal hours. This type of system worked in favor of large corporations with disposable incomes and greatly hurt the enslaved people who were only gaining the benefits as explained above, not a physical salary. It is important to take into consideration the value of money to the enslaved people coming from places such as Guinea, to them, the benefits that multinational corporations promised to reward them were more than they would ever get in their homeland. Slaves were often captured in areas where resources and quality of life were low. Promises from large mining corporations put thoughts of safety and prosperity in the minds of enslaved peoples, but the reality was never what they desired.

While Minas Gerais is only one of many territories devoted to gold mining, the history of how the mines affected indigenous communities and the government are great examples of what can happen when foreign investment becomes too prominent. The power that capital can have over a nation less fortunate is substantial because it can give hope for a better life. Throughout the course of history, we see how large, dominant countries have the ability to command control of governments and land of nations with less power. There is a direct relationship between power and status when it comes to conquering and winning the people of a country over. The power comes from capital, how much can you invest in an undeveloped country to provide what seems like a dual benefit for both parties, when in reality it is most likely only helping the larger nation. The top tier of the caste gains control of the government directly and starts to instill unique policies within the already developed nation. While the lower tiers in the governmental structure are  the conquered nation and its indigenous people who have to adapt to major changes in what was once theirs. Overall, it is clear that capital and size of a nations resources are what enables them to conquer other countries, thus allowing them the ability to have complete freedom in the way in which they use their power.

Sources

Skidmore, Thomas E. Brazil: Five Centuries of Change. 2010. Brown University Library, library.brown.edu/create/fivecenturiesofchange/.

 

Minas-Rio is one of the world’s largest mining projects, and was initially expected to export 26.5 million tons of iron ore in 2013– exceeded that by around 2 million. Brazilians say that there is no youth in the mines– no children. As soon as a child can hold a tool, they are put to work.  It’s estimated that more than 400,000 children are employed as domestic workers in Brazil. This statistic directly correlates with elevated sexual violence, domestic abuse, and child labor violations. The following are poems intended to illustrate the perspective that a CEO of a multinational corporation and a young male miner have regarding the prominence of the mining industry.

 

 15 year old Male Miner   

We don’t play, we work
We don’t eat, we nibble
We don’t rest, we push
We don’t cry, we persevere
Childhood is nothing but an idea
A figment of my imagination
Realities for children of the rich
Luxuries that my offspring will not have
I pray my wife does not bare daughters
It is much more brutal for girls in mines
Emotionally destructive
Those wounds cannot heal like my hands and feet
They bleed until the day a woman dies

 

“Also, the sex trade has evolved in recent years, increasingly through the Internet. Furthermore, due to the Internet’s virtual nature, it is difficult for the authorities to investigate and suppress.” Link

                                                                                                                                                 

“At Anglo American, we are working to make this future a reality – combining integrity, creativity and smart innovation, with the utmost consideration for our people, their families, local communities, our customers and the world at large” Link

 

CEO of Anglo-America, Mark Cutifani

Enforce sustainability projects
Increase employment in hurting countries
Skills from my Bachelors in Engineering
It’s best for the global economy
I see unused land waiting for a job
Having to sacrifice the lives of few
Nothing but dollar signs in my future
Criticize, I look at the big picture
Look at the statistics—I’m helping you
Natural selection will carry through time
Prioritizing my family and friends
I suggest you get to work and do too

 

Brazil struggles to keep the Amazon safe from multinational mining corporations. It is imperative that the government takes the appropriate steps to strive for the safety of Brazil’s environment. The Amazon provides oxygen and habitats for wildlife and humans.

Link

 

Attached is an article involving recent mining disasters in Brazil and how multinational corporations have taken responded. Link

 

My name is Kathryn Bergin, I am a Junior at Lehigh University and a member of the Women’s Varsity Swimming and Diving Team. I’m studying Finance and Spanish through the Rauch School of Business and Economics.