In Brazil, two Presidents from the Workers’ Party (Partido dos Trabalhadores = PT) held
power for thirteen and a half years from the beginning of 2003 until the middle of 2016.
Although the PT administrations mostly enjoyed upward trend, they ended up in negative
growth rate, high unemployment and inflation rate, and budget deficit. The main objective
of this paper is to identify the problems of economic management in Brazil by examining
the stance of the PT administrations on strengthening industries and the outcome of their
efforts. This research will be based on the argument of Luiz Carlos Bresser-Pereira, a
Brazilian economist who has insisted New Developmentalism since 2003. While he does
not hide his sympathy for the PT administrations which he considers brought back the idea
of developmentalism, he also keeps a distance from them, claiming that their idea is Social
Developmentalism, not New Developmentalism. The focus of New Developmentalism is
on overcoming Dutch disease, that is, devaluating the currency to the industrial equilibrium
exchange rate. The PT administrations released three industrial policies: PITCE in 2004,
PDP in 2008 and PBM in 2011. The goal of them was to push up export through innovation.
The data of export shows that there was a big increase in export between 2002 and 2017.
However, the main engine was primary commodities. It is hard to say the increase came
from innovation. Bresser-Pereira points out what was missing in the PT strategy was the
aspect of the exchange rate control. His idea which stands apart from both the orthodoxy
and the PT stance is convincing at a time when Brazil is struggling to improve the
competitiveness of the industries.
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