Volume 43, Number 171,
October-December 2012
Structural Limits on Economic Development:
Brazil (1950-2005)
Bibiana Medialdea

Another important feature is the productive precariousness of the Brazilian industry: not only does it produce capital goods in very low proportions, but it also demands them. The fact that imports occupy a very low position in purchases abroad reveals this, oscillating between 10% and 20% of totals.12 As such, because Brazil neither produces nor imports capital goods, it has a very insufficient supply of machinery and other equipment, a lack that clearly has an influence on its accumulation capacity.

By contrast, the widening of the industrial base is oriented mainly towards the production of both durable consumer goods (principally automobiles and household appliances) as well as intermediary goods needed for their supply. These productive lines, which were pillars of the strong growth seen in 1950-1980, currently account for the majority of manufacturing industrial production. According to Sochaczewski (1993), between 1952 and 1961, the production of durable consumer goods increased at an annual rate of 18.2% (6.6 percentage points above the industrial average). The dynamism in these branches was maintained until the end of the 1960s. Let us imagine, for example, that according to data from the Brazilian National Association of Manufacturers of Automotive Vehicles (Anfavea, in Portuguese), national automotive production was multiplied nine-fold13 between 1967 and 1980. Even though growth in the production of durable consumer goods slowed down after the industrial collapse in the 1980s, in the sense that other changes were not generated, Brazilian industry maintained specialization in this type of good. Between 1981 and 2005, they saw an annual cumulative growth rate of 3.7%, and although it seems like moderate growth, it is almost triple that of the industry of transformation as a whole (1.4%).14

The production of intermediate goods is another pillar of the industrial sector. Its relative weight in the manufacturing industry doubled during the decades of greatest growth, going from 20.2% to 44.4% between 1949 and 1980, and later being maintained between 42% and 43.5% (ibge, 1990). The most relevant aspect is that even though Brazil demonstrates some specialization in intermediate goods, the national supply is insufficient to cover the country’s productive needs. As such, internal demand is largely supplied by imports. Foreign purchases of intermediate goods constituted an average of 51.8% between 1974 and 2005 (see footnote 12).

The country’s deficient productive specialization is also confirmed by the fact that the most traditional industrial branches (like food and drink, textile, clothing and footwear) never cease to make up a large proportion of manufacturing production. Far from the 75% that these areas represented in 1950, they contributed around 40% to manufacturing in 1980, and in recent decades, this number has been between 33% and 35%, a relatively high amount. Let us consider that from 1981 to 2005 the branch of food and drink maintained stable participation of between 16% and 20%, while the textile, confections and footwear branches were maintained between 7% and 12%. Such a high specific weight of branches that are not very capital intense is consistent with the insufficiencies detected in the branches of capital goods and intermediate goods that supply them.

To summarize, the internal composition of the Brazilian industry clearly reveals its productive weakness: its incapacity to produce capital goods, to which we add the fact that it has very low imports of machinery and other productive equipment. As a result, the economy’s specialization does not produce a drive towards an important production of intermediate goods that could be incorporated into the production of capital goods. The negative interaction between these two aspects produces a structural limit that fundamentally affects the country’s development possibilities. This limit, which we identify by analyzing the Brazilian economy from the perspective of its productive specialization, is complemented by two more limits that are revealed through the perspective of supply and efficiency of productive resources: the weakness of capital stock and low working productivity.

12 The data covers between 1974-2005 and was obtained based on data from Funcex. The original data is available at the following portal: http://www.funcexdata.com.br/indicadores.asp . The proportion of imported machines and equipment over the total confirms this aspect: the average from 1970 to 2005 is considerably reduced, at 23% (obtained from the same source).

13It went from exactly 7.903 in January, 1967 to 71.027 in December, 1980. Data available at: http://www.anfavea.com.br/tabelas.html and at the IPEA portal (http://www.ipeadata. gov.br/).

14 Specifications on this data source can be consulted in footnote 10.

Licencia de Creative Commons  Problemas del Desarrollo. Revista Latinoamericana de Economía by Instituto de Investigaciones Económicas, Universidad Nacional Autónoma de México
is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License

Published in Mexico, 2012-2018 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 195 October-December 2018 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,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Moritz Cruz. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: January 9th, 2019.
The opinions expressed by authors do not necessarily reflect those of the editor of the publication.
Permission to reproduce all or part of the published texts is granted provided the source is cited in full including the web address.
Credits | Contact

The online journal Problemas del Desarrollo. Revista Latinoamericana de Economía corresponds to the printed edition of the same title with ISSN 0301-7036