Read more about the article The Middle-Income Trap and Resource-Based Growth: The Case of Brazil

The Middle-Income Trap and Resource-Based Growth: The Case of Brazil

This paper examines Brazil's economic growth patterns over the last three decades and identifies a missed opportunity for the country to attain high-income status by the mid-2010s. Instead, Brazil has suffered from low productivity growth, and has made little progress in transforming its production and export structures in favor of higher value-added activities. This premature de-industrialization makes it challenging for Brazil to transition from its long-standing upper-middle-income status. Brazil now has a limited, two-decade window to catch up with high-income nations before losing its demographic dividend, potentially leaving the country with an aging population without achieving high-income status. Therefore, it is crucial for Brazil to raise productivity growth through competition policies, and by embracing technological change. Achieving this goal requires comprehensive trade reforms to improve domestic competition, and to harness technology advancements effectively. This paper discusses key elements of such a policy framework within the broader context of a development strategy aimed at breaking free from the middle-income trap.

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Read more about the article Jumpstarting the Brazilian Economy

Jumpstarting the Brazilian Economy

Everything about Brazil is oversized – the population (at 217 million, the largest in Latin America), the land mass (fifth largest on earth) and by almost everyone’s reckoning, the economic potential. But so, alas, are its chronic problems that range from a lack of economic mobility to social divisions that undermine its capacity to make collective sacrifices in the quest for prosperity. There are signs – there have long been signs – that Brazil could pull itself up by the bootstraps. Much of the world rides in passenger jets made in Brazil, works in office buildings erected with Brazilian steel, eats soy grown in Brazil and learns from Brazil’s expertise in extracting oil in ultra-deep waters. Three of the eight largest hydropower installations on earth are located in Brazil, and more than half of Brazil’s energy consumption is derived from renewable sources. But to turn promise into plenty, Brazil needs to make hard decisions that prioritize growth and poverty reduction over the care and feeding of entrenched interest groups. It won’t be easy – but the gains would be worth the pain.

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Read more about the article A ciência tem um papel fundamental no desenvolvimento brasileiro

A ciência tem um papel fundamental no desenvolvimento brasileiro

Experiências aqui abordadas ilustram bem tanto a necessidade das chamadas "instituições que fazem a ponte entre ciência e inovação", quanto os ganhos decorrentes de esforços de pesquisa científica em universidades ou instituições de pesquisa. Esforços de contenção fiscal precisam incluir um reordenamento de gastos que preserve e amplie investimentos em ciência

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Read more about the article How to heal the Brazilian economy

How to heal the Brazilian economy

The Brazilian economy has been suffering from a double disease in the last few decades: a combination of anemia in productivity increases and an obesity of the public sector. On the one hand, the mediocre performance of productivity in Brazil in recent decades has limited its GDP growth potential. On the other, the expansion of public spending has become increasingly incompatible with such limits on the potential expansion of GDP, particularly since the growing public spending has not achieved commensurate socioeconomic results.

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Read more about the article Brazil and South Korea: Two Tales of a Middle-Income Trap

Brazil and South Korea: Two Tales of a Middle-Income Trap

The middle-income trap may well characterize the experience of Brazil and most of Latin America since the 1980s. Conversely, South Korea maintained its pace of evolution, reaching a high-income status. Such divergence of economic growth can be related to their distinctive performances of domestic accumulation of technological and organizational capabilities. Their different approaches to global value chains and trade globalization reinforced such discrepancy in domestic accumulation processes.

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Read more about the article What can Brazil expect from joining the OECD?

What can Brazil expect from joining the OECD?

Brazil can expect significant benefits from joining the Organization for Economic Cooperation and Development (OECD). The organization has shown to effectively promote better policies and institutions among its members countries, with significant positive effects. Considering the evidence that institutions are behind a large share of long-term increases in welfare standards, the benefits of membership go well beyond the modest costs involved in participating in the organization. Among the studied benefits are increases in trade – which are larger than those due to other international organizations such as the World Trade Organization (WTO) or the International Monetary Fund (IMF) –, increases in foreign direct investment, improvements in education, and better results in governance. Risks are small compared to potential benefits. We estimate the benefits by benchmarking against an estimate of the benefits of acceding to an institution with similar goals and policies – the European Union (EU) – and find them to be very large.

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Read more about the article Climbing a High Ladder – Development in the Global Economy

Climbing a High Ladder – Development in the Global Economy

This book approaches the opportunities and challenges faced by developing countries to raise their per capita income levels during the recent phase of globalization. After dealing with the post-global financial crisis economic landscape in advanced economies, it deals with the windows of opportunity opened by trade and financial globalization for developing countries to climb the income ladder. Domestic preconditions for a developing country to benefit from those windows are then pointed out. China, Brazil, and Sub-Saharan Africa are presented as case studies. The book ends with an assessment of the impact of the coronavirus crisis on the global economy.

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Read more about the article Brazil at a Post-Pandemic Macroeconomic Crossroads

Brazil at a Post-Pandemic Macroeconomic Crossroads

Moving forward—or not—with structural reforms aimed at enhancing fiscal adjustment and lifting private investment will define whether a sustainable—or unsustainable—growth-cum-debt trajectory will prevail in Brazil in the next decade. The extent to which its economy regains its attractiveness for foreign investors will play a key role.

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Read more about the article The two sides of capital flows to Brazil

The two sides of capital flows to Brazil

There was a significant inflow of funds in Brazil's external financial account in October and November for investments in both stocks and fixed income instruments. The bulk of the recent inflow has come in a “passive” way, and it did not include considerable volume on the side of “active” investors. For the wave to unfold in the availability of external resources to finance investments in the country, progress and confidence in the domestic fiscal and regulatory agenda will be relevant.

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Read more about the article Brazilian Economic and Political Outlook 2020/2021+ Economic Development and Global Value Chains Insertion: a view from Brazil and South Korea

Brazilian Economic and Political Outlook 2020/2021+ Economic Development and Global Value Chains Insertion: a view from Brazil and South Korea

Brazilian Economic and Political Outlook: The discussion about the Economic and Political Outlook 2020/2021, was moderated by John Welch, Executive Director of the Brazilian American Chamber of Commerce in NY, the Dunn Liberty Fellow in Economics at The King’s College, and Member of the Board of the Brazil-Canada Chamber of Commerce, with the participation of Christopher Garman, Managing Director at Eurasia, Andrea Gardella, Senior Economist at Export Development Canada and Otaviano Canuto, Principal, Center for Macroeconomics for Development. -------------------------- Economic Development and Global Value Chains Insertion: a view from Brazil and South Korea: Speakers: Otaviano Canuto - Senior Fellow at the Policy Center for the New South; Joonkoo Lee - Professor, Hanyang University. Moderator: Leonardo Paz Neves - Intelligence Analyst, International Intelligence Unit, Fundação Getulio Vargas

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Read more about the article Why is President Bolsonaro’s popularity on the rise in Brazil?

Why is President Bolsonaro’s popularity on the rise in Brazil?

Despite downplaying the seriousness of COVID-19, Brazil’s president’s approval rating is at its highest since he took office. Brazil has the world’s second-highest number of coronavirus deaths after the United States. President Jair Bolsonaro’s dismissive stance has helped oversee the coronavirus’ rapid spread, with more than four million cases and 135,000 deaths rocking the country. Millions have lost their jobs and the economy is in recession. But support from the poor has made Bolsonaro’s popularity rocket to its highest level since he took office in 2018. So what is the reason for this?

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Read more about the article Brazil, South Korea: Two Tales of Climbing an Income Ladder

Brazil, South Korea: Two Tales of Climbing an Income Ladder

The “middle income trap” may well characterize the experience of Brazil and most of Latin America since the 1980s. Conversely, South Korea maintained its pace of evolution, reaching a high-income status. Such divergence of economic growth can be related to their distinctive performances of domestic accumulation of technological and organizational capabilities. Their different approaches to global value chains and trade globalization reinforced such discrepancy in domestic accumulation processes.

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Read more about the article Brazil, South Korea, and Global Value Chains: A Tale of Two Countries

Brazil, South Korea, and Global Value Chains: A Tale of Two Countries

South Korea has climbed the income per capita ladder up to high levels, while Brazil may be considered a case of a “middle-income trap”. Such divergence of economic growth performances can be related to their distinctive approaches to global value chains and trade globalization, as well as to domestic accumulation of technological and organizational capabilities.

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Read more about the article Brazil’s Economic Crossroads: Which Path Will It Choose?
A screen displays data inside the Ministry of Science, Innovation, Technology and Communication's (MCTIC) crisis management command center in Sao Paulo, Brazil, on Tuesday, June 30, 2020. Brazil's telecommunications operators have provided the government with geolocation data to help monitor population mobility, concentration and risk of contamination in an effort to help stop the spread of the coronavirus. Photographer: Jonne Roriz/Bloomberg via Getty Images

Brazil’s Economic Crossroads: Which Path Will It Choose?

The scar of COVID-19 will take a long time to heal. And the country will also have to battle on the economic side, where the impact will be deep and long-lasting. Starting from a jump in the already high level of debt in relation to its GDP, coming from both sides of the equation: spending has skyrocketed while a steep decline in its gross domestic product is expected for this year. A combination of a credible return to the fiscal adjustment path and investment-friendly structural reforms would also have the additional positive effect of making possible new rounds of foreign capital inflows. That would reinforce the likelihood that the Brazilian economy will go down the optimistic path of growth and debt, rather than the pessimistic one.

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Read more about the article Brazil 2020-21: Predictions and Perspectives

Brazil 2020-21: Predictions and Perspectives

Brazil-Florida Business Council 2020-21: Predictions and Perspectives Join us to hear from this spectacular assemble of celebrated speakers on their predictions and perspectives for 2020-21 in the US and Brazil, as both economies are struggling during a global health and economic pandemic: Alberto Ramos, Alberto Bernal, Lisa Schineller, Otaviano Canuto, and Christopher Garman. Program moderator: Julia Leite

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