Economic History of Brazil - Colonial Period

Colonial Period

Portugal's exploitation of Brazil stemmed from the European commercial expansion of the fifteenth and sixteenth centuries. Blocked from the lucrative hinterland trade with the Far East, which was dominated by Italian cities, Portugal began in the early fifteenth century to search for other routes to the sources of goods valued in European markets. Portugal discovered the maritime passage to the East Indies around the southern tip of Africa and established a network of trade outposts throughout Africa and Asia. After the discovery of America, it competed with Spain in occupying the New World.

Initially, the Portuguese did not find mineral riches in their American colony, but they never lost the hope of someday finding such riches there. Meanwhile, in order to settle and defend the colony from European intruders, the Portuguese established a pioneer colonial enterprise: the production of sugar in the Northeast. Beginning in about 1531, cattle began arriving in Brazil, and a cattle industry developed rapidly in response to the needs of the sugar industry for transportation and food for workers. The discovery of precious metals in the colony's Center-South (Centro-Sul), a relatively undefined region encompassing the present-day Southeast (Sudeste) and South (Sul) regions, came only in the eighteenth century.