Opinion – Sergio Leite: The urgent re-industrialization of Brazil

The country’s economic growth is essential for people’s well-being. We cannot, however, be satisfied with rates that are still so far below the potential of Brazilian industry, agribusiness and many other segments of our economy.

In the 2000s, Brazil has been facing a worrying process of deindustrialization.

The national manufacturing industry was consolidated in the second half of the last century as an important generator of highly qualified job vacancies, with better remuneration and a participation in the formation of the GDP that was reduced from a level above 25% to around 10% in recent decades, with a strong impact on the generation of jobs and well-being for people.

And why has the national industry lost and continues to lose ground? Due to a series of factors, especially the structural aspects that make the so-called Brazil cost strongly impact our competitiveness and our development. In this sense, we have challenges of various natures, such as issues of taxation, bureaucracy, logistical infrastructure and many others.

In addition to the Brazil cost, new challenges have been posed over time. Added to this is the strong protectionism on a global scale that today marks the large economies, the pandemic and, more recently, the conflict between Russia and Ukraine, two important players in the globalized economy.

Today, the steel industry, in order to stay in the sector in which I have been working for more than 45 years, works with an idle capacity, according to the Instituto Aço Brasil, of more than 30%. Steel consumption in the country remains far below its potential. According to the same institute, from 1980 to 2021, domestic consumption increased from 100.6 in 1980 to 122.3 kg per inhabitant in 2021. China, in the same period, grew from 32 to 666.5 kg per inhabitant. /year.

Although the difficulties preceded the pandemic, Covid-19 worsened the situation even further, with the Brazilian manufacturing industry accumulating a significant drop in production in the last decade.

We need to mobilize for the re-industrialization of Brazil, since we had late industrialization and premature de-industrialization. The weakening of our industry has been reflected in less employment and often the flight of skilled labor to other countries.

Apart from all the great challenges that lie ahead, the Brazilian industry, for the most part, is very competitive within the walls. For this very reason, I believe in our immense capacity to overcome these obstacles and to generate, increasingly, value for the entire Brazilian society.