Jan 03, 2012
from O Estado de S.Paulo - editor's view "O pessimismo do setor industrial" (The pessimism of the industrial sector)
This translation of parts of the article into English by the editor of this blog
The economists of CNI - THE NATIONAL Confederation of Industry - forescast another bad year for the sector, unable as it has been to match the expansion of the internal demand.
The forescast is particularly worrying, because the industrial activity remains the main source of quality jobs and the most important generator of tecnological modernization in Brazil.
It would be a mistake to play down the hardships of the manufacturing sector. The Brazilian economy still has to move forward a great deal in order to reach the so-called post industrial stage. The stagnation in the rich world has only aggravated some of those difficulties, already well-known for several years, even during times of prosperity.
A relevant amount of investment (classified as fixed capital) slipped abroad in 2011, being compensated for by increasing imports. But, according to BC (Central Bank), in 2012 there will be a reduction of US$ 5 billion in the commercial surplus.
In the government's view, the industry will get stronger this year, when the Plano Brasil Maior (Bigger Brazil Plan) will produce all the benefits created as it was launched in Augsust 2011.
The pitfalls of the plan are apparent. Through it, the government raise protective barriers in the automotive sector and establish fiscal benefits for manufacture exports, partial tax return being the major incentive. By relying of such plan, the manufacturing sector will never become competitive again. Protecting the internal market - if that ever comes about - does not make businesses any more competitive for exporting. As to the fiscal benefit, no patch will replace functional tax system.
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