ABSTRACT
After decades of import-substituting industrialization Brazil today possesses a complete set of industries. Brazilian enterprises are capable of producing virtually everything, though mainly at a relatively high price and with a somewhat dubious quality. 1 International competitiveness is relatively low, and manufactured exports rely to a large extent on state subsidies. Now facing grave financial problems, however, the state can no longer sustain a policy of subsidization. Unfortunately, only few enterprises can today meet international efficiency standards since in Brazil’s inflationary environment, raising prices has always been a much easier option than raising productivity. Furthermore, after ten years of investment being deterred by a turbulent economic environment, the technological gap between Brazil and advanced countries is widening.
