Why does Brazilian industry keep shrinking?

Over the past 30 years, Brazil’s transformation industry has fallen to 1947 levels. While part of the drop, going all the way back to the beginning of the Second Republic, is a reflection of the current economic crisis, it is undeniable that Brazil is facing a structural change in its economy.

Why is this happening?

For industry, the answer is a combination of several issues: “legal insecurity, bureaucracy, high taxes, higher interest rates that curb productive investments, a weaker currency, and a sheer lack of infrastructure are the main reasons why local producers face more costs,” explains Paulo Skaf,...

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