Publications /
Research Paper

Back
Download PDF
The Middle-Income Trap and Resource-Based Growth: the Case of Brazil
Authors
Otaviano Canuto
Hinh T. Dinh
Karim El Aynaoui
March 1, 2024
Related topics: 
Economy
South America

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.

RELATED CONTENT

  • The Current Brazilian Situation
    Authors
    Marcus Vinicius de Freitas
    February 22, 2016
    If one opens the newspapers nowadays, Brazil will come out as a melting opportunity. The country is currently facing its largest economic crisis, mostly resulting from a negative political environment where the current Administration has been deeply swollen by Brazil´s largest corruption scandal, the so-called Lava Jato (Car Wash) Operations, whose investigations have brought to light the fact that billions of US$ dollars were being used for campaign financing, illicit enrichment an ...
  • Featured Q & A: How Will the Fed’s Rate Hike Affect Latin America?
    Authors
    Uri Dadush
    January 12, 2016
    Q: The U.S. Federal Reserve on Dec. 16 raised interest rates, ending what Fed Chairwoman Janet Yellen called an “extraordinary seven-year period” during which policymakers kept the federal funds rate near zero in an effort to support the economy. How will the Fed’s action affect Latin American economies, many of which are struggling with anemic growth and low prices for their commodity exports? How will the interest rate hike affect Latin American countries’ ability to pay off their ...
  • Download PDF
    Commodities: a new era
    Authors
    Yves Jégourel
    December 14, 2015
    The end of supply chain is the natural corollary of the sustained price fall of virtually all commodities observed over the past many months. If it appears premature to state exactly what is the impact of this deconsolidation in the commodities value chain, it is believed that the strategic role of physical trading is strengthening. Under such circumstances, the industrial strategies of developing countries and commodity exporters may have to evolve and, in priority, foster optimizi ...
  • Scholarly Collaboration in Regional Science in Developing Countries: The Case of the Brazilian REAL Network
    Authors
    Eduardo Amaral Haddad
    Jesús P. Mena-Chalco
    Otávio J. G. Sidone
    November 18, 2015
    The Regional Economics Applications Laboratory (REAL) celebrated its twenty-fifth anniversary in 2014. Since then, REAL has become one of the leading research centers of regional science worldwide. In this article, we describe the scholarly network involving REAL’s alumni working in academia in Brazil. We analyze the patterns of research collaboration among around fifty Brazilian researchers whose main activities are related to academic institutions in Brazil. The Brazilian REAL net ...
  • Download PDF
    Brazil after the 2014 Elections: A Bumpy Road Ahead
    Authors
    Sergio Fausto
    February 27, 2015
    Brazil’s future prospects, and ability to harness its advantages, will hinge on its own policy choices over the next few years. Yet the outlook for meaningful change is unclear. At present, Brazil is in a weaker position than four years ago, from both an economic and a foreign policy standpoint. Even in a scenario where Brazil’s economy gradually returns to the course it was on until 2008, no major strategic changes are likely to happen in Rousseff’s four-year term. ...
  • Download PDF
    Is Manufacturing Still a Key to Growth ?
    Authors
    Uri Dadush
    February 10, 2015
    Manufacturing is declining as a share of GDP not only in advanced countries, but in developing countries as well. This new trend, a result of complex forces, should be seen on balance as a reason for development-optimism, not pessimism. In the 21st century economy, manufacturing remains important, but poor countries can attract investment, grow rapidly and diversify away from agriculture on the basis of many possible sources of comparative advantage, without artificially promoting m ...