Brazil

This report is part of the Bank's ongoing economic work on medium-term policy choices for Brazilian economic recovery and development and resulted from a Bank mission... Show More + which visited Brazil during May-June 1984. Recent macroeconomic developments are reviewed, including the 1983-84 stabilization programme, recession and levels of economic activity, inflation, employment and wages, energy developments, balance of payments and external debt and public finance. Short-term and medium-term prospects are examined in the context of two base cases and alternative external scenarios. The report presents perspectives on medium-term strategies for economic recovery and development in the areas of trade, industry, agriculture, energy, public sector management, the financial sector, and employment, and offers suggestions for government reform of export promotion policies, public finance and fiscal policies, and external debt management. Show Less -

The Brazilian economy, after a decade and a half of very rapid growth, has entered a period of retrenchment and adjustment. To a considerable degree, its present problems... Show More + were triggered by events in the international economy beyond Brazil's own control; domestic economic recovery will depend heavily on the resurgence of world trade and the easing of tensions in the international financial market. Important modifications of strategy and policy execution will be required. This report analyzes several key policy areas and makes the following recommendations: (i) Brazil should embark upon a concerted program of trade liberalization, particularly in regard to imports destined to export production; (ii) the credit subsidies currently funneled through the Monetary Budget must be reduced; (iii) the investment program should be strengthened; (iv) policies to raise labor productivity rather than those to fix wages are preferred; and (v) social needs should continue to get attention. The following policy issues should be studied: (i) policies related to job creation; (ii) tax policies and financial sector reforms; and (iii) price intervention policies. Show Less -

The object of this report is to provide a diagnosis of the major issues and options facing Brazil as it attempts to cope with the energy problem, which is largely a... Show More + result of a high demand for petroleum. The major issues in Brazil's energy sector include allocation of investment priorities between and within the various energy subsectors, the special problems of substitution of diesel oil, and issues related to overland gas imports and energy prices and taxes. The current situation, including the resource endowment, the energy balance, prices and organizational aspects, is reviewed. The prospects for energy supply and demand, the interfuel substitution and conservation programs, and various aspects of the investment program are examined. Show Less -

This review of Brazil's trade policy focuses on the manufacturing industry and its impact on industrial efficiency and manufactured export growth. It includes discussion... Show More + of the Brazilian experience with policies to promote and regulate the development and acquisition of industrial technology and their impact on output and exports. The report is organized in three separate parts: (i) background on industrial development; (ii) a review of trade policies, concentrating on a quantification of the relative incentives for production oriented toward the domestic market and for exports; and (iii) a review of technology policy, including development of human resources, basic research and development, industrial technology, and technology transfer. Three case studies exemplify the main types of technological transfer. The report does not attempt to elaborate all possible policy implications but to present the main information and analytical tools to be considered in the preparation and evaluation of policy alternatives. Show Less -

This report reviews agricultural performance and policies in Brazil in recent decades. In view of the energy crisis and balance-of-payments problem, a high priority... Show More + has been placed on the sector to expand both domestic food production and exports, as well as to provide substitutes for imported petroleum and growing employment opportunities. Particular attention is given to rural credit, the minimum price program, subsidies to the producers and consumers of wheat, land taxation, foreign trade policies, and the program to substitute sugar alcohol for gasoline. The report assesses government policies and offers some recommendations for change aimed at sustaining Brazil's agricultural performance, which has been among the best in the world in the post-World War II period. Chapter II discusses government policies toward agriculture, and Chapter III addresses foreign trade policies specifically and agricultural exports. Chapter IV examines the sugar and alcohol program, and the final chapter is a summary of major recommendations. Show Less -

Further settlement and economic development of the Northwest is currently one of the high priorities of the Brazilian government. A special program, POLONOROESTE, has... Show More + been established to help bring order to the large, spontaneous migratory flow to the Northwest and, consequently, at increasing the productivity, incomes, and social welfare of the region's present and future population. The major components of the program include: (i) road reconstruction and improvement, particularly in the areas of greatest agricultural potential; (ii) consolidation of existing settlement projects and establishment of new ones, improvements in physical and social infrastructure and services, and measures to protect the natural environment and interests of the indigenous population; and (iii) establishment of a number of urban support centers in the more remote rural areas. The program entails substantial risks emanating from the region's size and frontier status, its rapidly-growing population, its confused land tenure situation, its fragile and imperfectly known natural environment, its Amerindian population, and its thin administrative structure. The government must be prepared to accept some of the negative effects frequently associated with accelerated development in frontier areas. Show Less -

The capital goods producing industries have played an important role in the growth of Brazil's industrial sector since the earliest stages of its modern development.... Show More + But at the beginning of 1979, these industries were faced with a situation of considerable excess capacity. Further expansion of exports was needed and appeared possible. Financial facilities needed expanding as well, so that more export credit might be made available. In addition, efforts were required to stimulate specialization and avoid dispersion of production both at the product and plant levels. A policy framework encouraging a more open economy was considered desirable. The prevailing system of import protection needed major revision, focusing on exchange rate overvaluation, tariffs on capital goods, prior import deposits, export subsidies, and fiscal subsidies for production. Show Less -

This special report on Brazil focuses on population dynamics and on the development of human resources or, from a somewhat different point of view, the provision of... Show More + basic services in the broader context of development. Its aim is to facilitate the search for effective policies and efficient programs. The specific objectives are: (i) to assess the historical evolution of various socioeconomic indicators; (ii) to relate the evolution of these indicators to a broader historical framework of population and development; (iii) to analyze available data and estimate the quantitative relations between variables pertaining to population dynamics; human resource development; and labor markets, income distribution, and basic macroeconomic variables; and (iv) to articulate these quantitative relations in simple simulation models and to analyze costs and outcomes of selected policy interventions. The report concludes that the benefits of rapid economic growth have not been distributed evenly and that meeting the basic needs of the entire population is a political rather than economic issue. Show Less -

This special report on Brazil focuses on population dynamics and on the development of human resources or, from a somewhat different point of view, the provision of... Show More + basic services in the broader context of development. Its aim is to facilitate the search for effective policies and efficient programs. The specific objectives are: (i) to assess the historical evolution of various socioeconomic indicators; (ii) to relate the evolution of these indicators to a broader historical framework of population and development; (iii) to analyze available data and estimate the quantitative relations between variables pertaining to population dynamics; human resource development; and labor markets, income distribution, and basic macroeconomic variables; and (iv) to articulate these quantitative relations in simple simulation models and to analyze costs and outcomes of selected policy interventions. The report concludes that the benefits of rapid economic growth have not been distributed evenly and that meeting the basic needs of the entire population is a political rather than economic issue. Show Less -

Since the beginning of 1974 the Brazilian economy has been dominated by the problems of adjustment to the changed conditions of the international economy. The major... Show More + dilemma has been to seek a viable compromise between balance-of-payments and growth objectives. Since mid-1976, a gradual but steady tightening of monetary policies has slowed the growth of money and credit slightly. However, recently the rapid growth of credit extended to the private sector and the large inflow of funds on external account have led to a rapid expansion of the monetary base. This has been difficult to control. The statistical basis for making any statement about overall levels or trends in poverty and inequality in Brazil, is lacking, but indications are that distribution is skewed and poverty widespread. For the growth rate to reaccelerate, manufacturing exports must continue their rapid expansion while import substitution must continue its already impressive pace. The underlying dynamism of the Brazilian economy is such that a suitable adjustment could be carried out without causing undue hardship. In addition, long run capital requirements now appear to present much less of a potential problem than they once seemed to. Show Less -