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The Brazilian Competitiveness Cliff

Author

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  • Otaviano Canuto
  • Jose Guilherme Reis
  • Matheus Cavallari

Abstract

Brazilian exports of goods and services have grown sharply in recent years, with sales nearly three times higher in 2010 than in 2000. However, Brazil faces considerable competitiveness challenges: its export performance depends mostly on favorable geographical and sector composition effects. Such challenges increased after the recent global economic crisis. A recent slowdown in industrial exports, production, and investments seems related to supply-side difficulties stemming from a wide range of inefficiencies and rising costs, rather than insufficient demand. Although a stronger currency is one of the factors behind the lower competitiveness of Brazil’s manufacturing exports, sluggish productivity performance, lack of dynamism at the firm level, and a real wage uptrend seem to explain a significant part of the overall loss of competitiveness. This diagnostic reinforces the urgency of resuming the agenda of microeconomic reforms, increasing the investment-to–gross domestic product (GDP) ratio, and advancing toward better-skilled human capital.
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Suggested Citation

  • Otaviano Canuto & Jose Guilherme Reis & Matheus Cavallari, 2013. "The Brazilian Competitiveness Cliff," World Bank Publications - Reports 17038, The World Bank Group.
    • Handle: RePEc:wbk:wboper:17038
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    References listed on IDEAS

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    Cited by:

    1. -, 2014. "United States Trade Developments 2013-2014," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 37838, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. International Monetary Fund, 2017. "Brazil: Selected Issues," IMF Staff Country Reports 2017/216, International Monetary Fund.
    3. Alicia Garcia-Herrero & Enestor Dos Santos & Pablo Urbiola & Marcos Dal Bianco & Fernando Soto & Mauricio Hernandez & Rosario Sanchez & Arnulfo Rodriguez, 2014. "Competitiveness in the Latin American manufacturing sector: trends and determinants," Working Papers 1411, BBVA Bank, Economic Research Department.
    4. Nelson Marconi & Igor L. Rocha & Guilherme R. Magacho, 2016. "Sectoral capabilities and productive structure: An input-output analysis of the key sectors of the Brazilian economy," Brazilian Journal of Political Economy, Center of Political Economy, vol. 36(3), pages 470-492.
    5. Guilherme R. Magacho & John Mccombie, 2016. "Impacts Of Developing Countries Growth On Natural Resource Exporters: A Bop Constrained Growth Model," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 097, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. Vargas Da Cruz,Marcio Jose, 2014. "Do export promotion agencies promote new exporters ?," Policy Research Working Paper Series 7004, The World Bank.
    7. Tortorella, Guilherme Luz & Miorando, Rogério & Marodin, Giuliano, 2017. "Lean supply chain management: Empirical research on practices, contexts and performance," International Journal of Production Economics, Elsevier, vol. 193(C), pages 98-112.
    8. Porzecanski, Arturo C., 2014. "Brazil’s Place in the Global Economy," MPRA Paper 54257, University Library of Munich, Germany.

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    More about this item

    Keywords

    Private Sector Development - E-Business Economic Theory and Research Finance and Financial Sector Development - Currencies and Exchange Rates Private Sector Development - Emerging Markets Environmental Economics and Policies Macroeconomics and Economic Growth Environment;

    JEL classification:

    • D0 - Microeconomics - - General
    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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