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Brazil - Industry


After 1987 problems that had confronted industry earlier in the decade intensified, adverse macroeconomic conditions persisted, and political troubles affected expectations adversely. Until the end of the 1980s, industry relied heavily on government protection and favors, but it also faced pervasive regulations and extensive governmental interference. These factors had a deleterious effect on industrial investment and on the productivity of several industrial subsectors, increasingly blunting the competitive edge they had struggled to achieve in the world market. Moreover, as a result of the fiscal crisis, the government was hard-pressed to continue to provide support and subsidies for industry and to maintain and expand the country's infrastructure.

The Collor de Mello administration, inaugurated in 1990, introduced significant changes in Brazil's economic strategy. Regarding industry, the government implemented measures to eliminate regulations, to liberalize trade, and to markedly reduce governmental favors and subsidies. It also announced a series of actions aimed at increasing industry's competitiveness. Despite these efforts, political and macroeconomic difficulties prevented the effective implementation of the new strategy, and the mounting fiscal crisis dampened efforts to rebuild and improve the badly deteriorated infrastructure. Therefore, an important part of the industrial sector failed to recover and to modernize. With stagnation, the domestic market could not give industry a dynamic push. Moreover, the reduction in investment, coupled with the deteriorating infrastructure, led to declines in competitiveness. These developments, together with fewer import barriers, caused industry's balance of trade to decline, from a peak of US$16.3 billion in 1988 to US$11.1 billion in 1991. In the early 1990s, despite sectoral weaknesses, the industrial sector became a major contributor to the country's exports and trade surplus.


Data as of April 1997



About Brazil
Table A. Selected Acronyms and Abbreviations
Table B. Chronology of Important Events
Transportation and Communications
Government and Politics
National Security

Historical Setting

The Society and Its Environment

The Economy

Historical Background and Economic Growth

- The Colonial Period
The Sugar Cycle, 1540-1640
The Eighteenth-Century Gold Rush

- The Economy at Independence, 1822
- The Coffee Economy, 1840-1930
- A Period of Sweeping Change, 1930-45
- Import-Substitution Industrialization, 1945-64
- Stagnation and Spectacular Growth, 1962-80
Stagnation, 1962-67
Spectacular Growth, 1968-73

Growth with Debt, 1974-80

- Stagnation, Inflation, and Crisis, 1981-94
The 1981-84 Period
The 1985-89 Period

The 1990-94 Period

The Labor Force and Income Levels
- Employment and Earnings


- Inequality and Poverty
Structure of Production
- Agriculture
- Livestock
- Fishing
- Industry
- Mining
- Energy
Electric Power
Natural Gas
Nuclear Power

- The Services Sector

Inland Waterways
Merchant Marine

Exchange-Rate and Balance of Payments Policies
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- Capital Flows and the External Debt
Fiscal and Monetary Policy, the Public Sector, and Inflation
- Fiscal Trends in the 1980s
- Pressures on Public-Sector Expenditures in the 1980s
- Fiscal Deficits and Inflation
Brazil's Real Plan
Trade Policies
Trade Patterns and Regional Economic Integration
Economic Outlook

Government and Politics

National Security

Science and Technology

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