ABSTRACT
One of the main issues regarding the Brazilian economy in the 1980s has been the economic effects of the huge transfer of real resources the economy has been forced to make to the rest of the world, in order to service its large external debt. The transfers of real resources were obtained at the expense of very low rates of domestic savings and investment. Investment by the public sector has been drastically reduced, bringing total investment to extremely low levels, whilst both the internal and external debts of the public sector have rocketed. The principal leading sectors in Brazilian output growth in 1984 continued to be the so-called industrial public utility services, transport and communications – among the non-tradeables. Perhaps the main structural challenge facing the Brazilian economy is to advance the industrialization process into the more technologically sophisticated areas, in order to reduce and eventually overcome the country’s technological gap.
