produtiv capital 3 english

The extrapolation of the capital/product curve behavior by a logistic curve fit allows the evaluation of the investment that would be necessary in each year to keep a constant growth rate along the years. This was made for Brazil and Japan and showed quite similar behaviors, shifted in about 30 years. To grow 6% annually in the 1950’s Brazil had to invest about 14%, in1996 it needs to invest 32% of the GNP and it willneed to invest about 35% of the GNP if the present trend is kept.

The present Brazilian savings (25% of the GNP) is sufficient only for a 3% a year growth and only without surplus in the commercial balance. In order to return to growth rates close to 6% a year, Brazil must reach savings of 35% of the GNP. As it has been shown in the above mentioned book, only a vigorous optimization of the present model could yield a growth slightly above 4% a year.

The difference of production results (supposedly higher in developing countries) was a factor that in a market economy should lead - without national favoritism implied by the utopian global economy - to homogenization of the economic condition among all countries. The fast deterioration of this comparative advantage is a warning concerning the deficiencies of the adopted development model.

Brazil has an insufficient revenue and - according to statistics published by the World Bank along several years - the worse income distribution among the economically relevant countries. In the tenth or ninth economy of the world, 10% of the population retains 50% of the income.

With a work force approximately growing at an annual rate of 3% in an economy growing at the same rate, the explicit unemployment rate level, in the best assumption, will be maintained at about 6% and the informal employment at 20%.

With the vigorous policy of manpower productivity in the industry and services, with the inevitable manpower reduction in agriculture due to mechanization this situation should only be aggravated.

It should be observed that manpower retraining would only solve the unemployment problem locally in one sector but it does not solve the problem for the whole active population , which only the global

The policy that directly or indirectly estimates the capital deepening and the manpower reduction integrates modernity and global economy. Since the parameters that turned it economical in the developed countries - substitution of high-cost manpower - do not occur here, the modernizing investments are stimulated by fiscal and credit incentives.

The normalization of industrial and service activities to international standards is an additional factor to the intensification of capital use. Should adhesion to this normalization be inevitable, Brazil should act more vigorously so that it should not be induced to additional investments that do not exactly aim at the quality requirements intended by normalization.

On the other hand, most part of taxes and contributions charged are onerous to the manpower, giving to the investor a misleading indication.

Even financial resources for capital, such as contribution to social security, the Employment Time Guaranty Fund (FGTS) and the Worker Support Fund (FAT) were historically used as subsidy for the capital. It wouldn’t be exaggerated in a market economy model that the manpower and capital costs should be less influenced and, should they occur, used for the benefit and not against the abundant resources in our economy.

Without a vigorous policy for both capital productivity and investment - the true one, not the financial one - Brazil will not grow as it needs to. Analyzing examples of countries with good capital productivity - India and Chile - could be useful to find an alternative. Chile, which is better known in Brazil, opted for deindustrialization or for specialization which is hardly applicable to an economy having a dimension as ours. India, whose growth rate - maintained during 40 years in a discreet but consistent 4 to 5% annually and indifferent to the world economic cycles - is a question mark.

Decade	FRANCE	ITALIE	BELGIUM	JAPAN	GERMANY
50	1,89		2,66	2,07
60	2,02	2,29	2,54	2,09
70	2,47	2,50	2,58	2,70
80	2,96	2,92	2,88	3,31	4,06
90	3,09	3,01	2,87	3,47	3,59
Growth 90/60	53%	31%	13%	66%

Decade	CANADA	AUSTRALIA	NEW ZEALAND	UNITED KINGDOM	Average	standard deviation
50	3,08	2,78	2,82	2,43	2,5	0,4
60	2,89	2,75	2,75	2,40	2,5	0,3
70	2,66	2,87	2,95	2,63	2,7	0,2
80	2,85	3,14	3,35	2,82	3,0	0,2
90	3,06	3,27	3,66	2,88	3,2	0,3
Growth 90/60	6%	19%	33%	20%	28%

Decade	MEXICO	CHILE	ARGENTINA	INDIA	KOREA	BRAZIL	Average	standard deviation
50	1,50				1,30	1,16	1,3	0,2
60	1,50	1,79	3,09	1,96	1,30	1,27	1,8	0,7
70	1,69	2,07	3,03	1,99	1,55	1,30	1,9	0,6
80	2,32	2,18	3,73	2,10	2,15	1,95	2,4	0,7
90	2,63	2,08	3,74	2,19	2,40	2,86	2,7	0,6
Growth 90/60	76%	16%	21%	12%	85%	126%	46%