Volume 43, Number 171,
October-December 2012
Structural Limits on Economic Development:
Brazil (1950-2005)
Bibiana Medialdea
PRODUCTIVE WEAKNESS AND
LIMITED ACCUMULATION CAPACITY ( ...continuation )

Figure 1. Structure of Production Sectors: 1950-2005
(% of gdp)

Sector production at basic prices.
Source: Prepared by the author based on data from ibge (National Account System) available at: http://seriesestatisticas.ibge.gov.br/lista_tema.aspx?op=0&no=12

The external debt crisis in the 1980s drastically interrupted this dynamic of growth and transformation. Since then, economic activity has been growing at a very reduced rate. In the three previous decades, gdp increased at an average annual rate of 7.6%, while in the following twenty-five years, it did not even reach 2.2% annually, in such a way that the gdp per capita barely grew at all (it grew at a rate of 0.4%). Performance of the industrial sector was even worse; it only increased 1.2% annually, while it increased at 8.7% during the previous decades.8 As a result, starting from the mid-1980s, the industry quickly backtracked over the next decade, losing around 20 percentage points of participation in the gdp. Later on, from 1995 to 2005, the relative weight of industrial activities fluctuated between 26% and 30%, which, as shown in Figure 1, situates the sector in a relatively low position compared to the early years of the 1960s.

However, the Brazilian productive structure was not even able to overcome the weaknesses that impeded its accumulation dynamics during the thirty years of “prodigious” growth and accelerated industrialization, and even less so when the isi strategy collapsed. Throughout all of these decades, Brazilian industry has essentially been unable to resolve its fundamental deficiency: the incapacity to produce capital goods in a significant proportion that would strengthen the internal accumulation capacity.

The process of industrialization seen in the first decades determines an initial advance in production of equipment goods (transport materials and mechanical industry), whose contribution to the industry of transformation was elevated from 3.9% to 15.6%9, although the initial numbers were so low that by 1980 the equipment goods sector only made up a sixth of the industry of transformation. Moreover, the mechanical industry, which is the heart of the machinery production, contributed no more than 7.8%. And in the following decades, growth in production of capital goods would be negligible, with an annual average of 0.5% between 1981 and 200510, which consolidated Brazil’s weak specialization in this type of goods. According to Carvalho and Kupfer (2007), from the beginning of the 1990s, the set of equipment goods maintained a relative weight in the industry of transformation of only 2.5 percentage points higher than in 1980, while the mechanical industry even saw its participation fall (oscillating between 6.5% and 7%).11

We must take into account another piece of data. Starting in 1980, the industry not only lost positions within total production, but also the industry of transformation lost a large amount of relative weight. Using the same sources indicated in the previous paragraph, we conclude that it went from around 78% between 1950 and 1980 to lose almost 10 percentage points and end up at 69.8% in 1993, until falling to the current 60%. This phenomenon implies that the most dynamic industrial activities have been related to mining, construction and basic services (water, gas, electricity) and that manufacturing branches have had pretty slow growth, even more pronounced for those that manufacture capital goods. As such, specialization in this type of product has seen a greater drop than indicated in previous data.

8The average cumulative growth rate of gdp, gdp per capita and industrial gdp were calculated using 2011 prices with data estimated by the ipea based on data from the ibge (Sistema de Contas Nacionais). The series of data can be consulted at: http://www.ipeadata.gov.br/. Industrial production is estimated using the added value of the industry of transformation at basic prices.

9We estimate this data based on nominal production data from the industry of transformation and the gdp, obtained from the ibge (1990).

10 Calculated based on the ibge (Pesquisa Industria Mensal, Produção Física), data available at:

http://seriesestatisticas.ibge.gov.br/lista_tema.aspx?op=0&no=8

11 The activities considered by Carvalho and Kupfer (2007), “of greater technological content,” never surpass 25% of industrial production. We also recommend referring to Siquiera (2000) and García (2007).

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 48, Number 191, October-December 2017 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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