Economic Premise
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The Economic Premise series summarizes good practices and key policy findings on topics related to economic policy. They are produced by the Poverty Reduction and Economic Management (PREM) Network Vice-Presidency of the World Bank.
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Publication The Brazilian Competitiveness Cliff(World Bank, Washington, DC, 2013-02) Reis, Jose Guilherme; Canuto, Otaviano; Cavallari, MatheusBrazilian exports of goods and services have grown sharply in recent years, with sales nearly three times higher in 2010 than in 2000. However, Brazil faces considerable competitiveness challenges: its export performance depends mostly on favorable geographical and sector composition effects. Such challenges increased after the recent global economic crisis. A recent slowdown in industrial exports, production, and investments seems related to supply-side difficulties stemming from a wide range of inefficiencies and rising costs, rather than insufficient demand. Although a stronger currency is one of the factors behind the lower competitiveness of Brazil's manufacturing exports, sluggish productivity performance, lack of dynamism at the firm level, and a real wage uptrend seem to explain a significant part of the overall loss of competitiveness. This diagnostic reinforces the urgency of resuming the agenda of microeconomic reforms, increasing the investment-to-Gross Domestic Product (GDP) ratio, and advancing toward better-skilled human capital.Publication The Euro Experience and Lessons for Latin America(World Bank, Washington, DC, 2012-10) Hurtado, CarlosIt is natural to think, and economic theory predicts, that integration in an economic zone like Europe fosters growth and development, particularly when integration refers to trade opening among countries. It is expected that openness (to trade) promotes growth and being closed (to trade) deters it. Trade theory also concludes that (trade) integration is beneficial to all countries, large and small, and that small economies are likely to benefit relatively more from integration. This note reviews the development of the European Union's euro zone and its impacts on growth and finds lessons that can be useful for Latin America.Publication A Brave New World for Latin America(World Bank, Washington, DC, 2010-04) Giugale, Marcelo M.With variations across countries, Latin America's economic agenda will change over the next few years. Fiscal policy will be monitored more independently, and may lean more against cycles. Financial regulation will be heavier, and less attuned with a single international model. Innovation will be at the center of trade strategies. Equity will begin to replace equality as the driver of social programs. More state agencies will be managed by results, starting the long process of earning citizens' trust. The region will play a larger global role, led by Brazil. And if the world's economy holds, most Latin Americans will be on a faster development path.