Brazil is in a crisis again. The COVID-19 pandemic has spread across the country and political incompetence has led to a massive health crisis. Investment outflows have been rapid and the Brazilian real has depreciated dramatically. The Brazilian economy is set to contract again after three years of weak positive growth.
Brazil’s development bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES) has announced some measures to deal with the financial instability caused by the COVID-19 pandemic. However, these measures are being criticised for being insufficient. Rather than being a temporary policy mistake that can be corrected easily, BNDES’ passive response is linked to the bank’s structural retreat from the economy over the past five years.
During the 2000s, BNDES was acclaimed as a catalyst of the country’s economic growth. Globally, developing countries such as Indonesia saw the rise of BNDES as something favourable and sought to mobilise their own national development banks.
By acting as a lender and a minority shareholder of major domestic companies, BNDES played a key role in Brazil’s state-activist growth model of which the observers have labelled ‘liberal neo-developmentalism,’ ‘developmental neoliberalism,’ or ‘democratic state capitalism.’ Furthermore, BNDES actively supported national champions’ internationalisation strategy by financing export and investment activities. During and after the global financial crisis, BNDES’ role extended and was used by the government to carry out counter-cyclical operations. Read More »
By Erik Reinert and Richard Itaman.
At the OECD’s origin, we find the 1947 Marshall Plan that re-industrialised a war-torn Europe. At the very core of the Marshall Plan was a profound understanding of the relationship between a nation’s economic structure and its carrying capacity in terms of population density. We argue that it is necessary to rediscover this theoretical understanding now, in the mutual interest of Africa and Europe.Read More »
The rise of a new global ‘robot reserve army’ will have profound effects on developing countries but will it mean people will be working hard or hardly working?Read More »
In two previous posts on this blog, I’ve discussed the issue of premature deindustrialization and some of its possible consequences. In a recent paper, I, along with co-author Bret Anderson of Southern Oregon University, explored the potential consequences of premature deindustrialization further by examining the possible connections between premature deindustrialization and the defeminization of industrial employment. Premature deindustrialization is a situation in which the shares of manufacturing value added and employment begin to shrink at per-capita income levels much lower than those of the early industrializers, along with manufacturing employment peaking at lower levels. The scarce manufacturing jobs that do remain, however, are likely to be relatively high paying jobs that countries and workers compete for. In our work, we assessed whether premature deindustrialization is a feminizing or defeminizing force in industrial employment. By examining 62 countries from 1990 to 2013, we find that premature deindustrialization is likely to amplify the male bias of industrial upgrading.Read More »
In a previous post, I wrote about the global trend of premature deindustrialization; the trend towards lower levels of industrial employment, and a shift away from industrial employment at lower levels of per capita income, and how the effects on human well-being of these trends are not yet clearly understood. An important question in understanding the impact of these changing structural patterns on individuals’ well-being is to whether either a lifting of the living standards of those not in formal employment, or the generation of employment to replace the manufacturing employment, is taking place.
In a recent working paper, I illustrated how combining a household level indicator of well-being with decomposition of change analysis can shed light on these questions by focusing on two specific episodes of growth; South Africa from 1996 to 2007 and Brazil from 1991 to 2010. Using Census data from IPUMS, I created indices of well-being on a scale of 0-100, using indicators such as child survival rate, access to clean water and electricity, and educations levels, culled from census data. Next, each household was assigned to a “type” based on sectoral employment of the household head and urban/rural location, and average household scores were calculated for each type. A decomposition of change analysis was then used to assign improvement in well-being to improvement within the types and shifts in population between these types.Read More »