Lessons from Brazil’s Early “De-industrialization”

According to a report released recently by Boston Consulting Company, the average salary of Brazil’s industrial labor force has more than doubled in the past ten years, while the average annual growth rate of industrial productivity is only 1%. Premature “deindustrialization” has resulted in backward industrial competitiveness and a drag on economic development.
In order to avoid falling into the middle-income trap and maintain the rapid growth of economic data, Brazil, on the one hand, chose to develop a consumer economy and promote the expansion of the tertiary industry; On the other hand, Brazil started to rely on the export of natural resources, but neglected the development of labor-intensive basic industries. Brazil gradually became a raw material base from an industrial power.
Aroi Theo Campero, a researcher at Brazil’s Vargas Foundation’s Economic Policy Research Center, told reporters that on the one hand, Brazil is extremely short of suitable infrastructure construction, such as modern airports, highways, ports and communication networks, which have become objective bottlenecks restricting Brazil’s economic development. On the other hand, Brazil, while subsidizing the poor with a large amount of funds, focuses on the tertiary industry while expanding employment. Excessive investment in the service sector has further promoted Brazil’s “deindustrialization”. People who have just entered the middle class are unwilling and do not need to engage in low-end manufacturing, resulting in an extreme shortage of mature labor and senior talents needed by industrial production departments.