Policy Memorandum Harvard Case Solution & Analysis

Options

To resolve the problem of income disparity among different classes, the action plan suggested to eliminate this disparity is the expansion of industrialization. For this action plan I have given some alternatives through which the government can expand its industrialization. The first alternative recommends the government to provide loans and lump-sum amount for the establishment of industrial activities with the help of foreign direct investment. Brazil is so rich in terms of actual beauty that could bring high investment from international countries. The strong tourism industry will strengthen the economy in terms of finances that ultimately result in government spending on the development of population. Brazilian government can also reduce subsidies on the raw material which in turn will greatly encourage the investor to capitalize their investment with the help of agricultural and investment activities. More investment will also generate large number of job opportunities which will positively contribute in the reduction of income disparities.

Our second action plan for the development of education system of Brazil is to enhance the quality of education which includes efforts to reduce the increasing teacher absenteeism in government schools. In order to achieve the high quality education the ratio of teacher and pupil has to be increased. Spending solely on the infrastructure is not enough to raise the level of education, hence, in order to upgrade the academic system of Brazil the government must have to spend on the availability of basic infrastructure of classroom. It has been founded that many schools in Brazil were running on extremely low ground rules of providing education. It has been observed that many institutions are providing education with the absence of notebooks and basic stationeries in the class.

For the first action plan of expanding industrialization, recommended option to accomplish the task are the availability of finances through foreign direct investment and the availability of subsidies on the manufacturing raw material.

As it has been mentioned in the case, the education minister has allocated four years to revamp the entire education system of Brazil. The first advantage of industrial expansion is that it will increase the overall GDP of Brazilian economy. It will fasten the economic growth by many folds as well as reduce the income disparity among various social classes and will ultimately increase the living standard of the citizen. The second positive aspect of the increased industrial activities is the increased level of foreign direct investment which will provide huge amount of monetary assistance to Brazilian economy. If the economy is strong in terms of financial assistance then it will increase the government spending on the public welfare and education system. Finally, the most important positive aspect of industrial expansion is that it will increase the employment sources for a common man. It will also increase the purchasing power of a common citizen due to which they will be able to purchase quality education for their children. The government scheme of industrial development will support the investors in terms of finances and reduced prices of raw material. The investors have to build plants into rural areas and provide shelter and education opportunities to the poor worker and their children.

Apart from all the benefits obtained through the development of employment structure to eliminate income disparities there are some shortcomings that push the government to look utterly at the matter. It is highly recommended to calculate the financial cost involved in it because currently the country is not in a position to take massive investment decision on its own. Hence, if a country decided to go for massive industrial projects then the government should take support from FDI’s to assist its operations. On the other hand, the thought that halts the expansion idea is its long-term approach because no industry would develop in a short span of time. Another threat that could be disastrous for this alternative is from investor's perspective and their willingness, it is highly expected that the investor refused to develop their business in rural areas. It could also be possible that people don’t want to spend their money on the welfare activities of their workers.

The second alternative recommends improving the quality of education through restructuring the academic infrastructure by a continuous check and balance system. It is the most feasible action for the recommended alternative because it is less costly as compared to the industrialization expansion which was a base on the mass investment.................................

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