The Brazilian economy needs diversification. Rio police kill an 8-year-old girl. The government on Twitter. And what to expect from Jair Bolsonaro at the UN General Assembly, tomorrow. (This newsletter is for platinum and gold subscribers only. Become one now!)
The Brazilian economy became less complex
Over the past ten years, Brazil has lost five positions in the Economic Complexity Ranking (prepared by a group of researchers from Harvard and MIT since 2011), dropping to 52nd out of 133 countries. The ranking measures the knowledge intensity of an economy by considering the complexity of the products it exports. Now, Brazil comes behind much smaller economies such as Costa Rica and Uruguay.
Why it matters. The researchers point out that diversification is the key to development. But while the country added 13 new products to its export portfolio, it didn’t do it in a way that increased people’s income (the rise between 2013 and 2017 was of only USD 22 per person).
Brazil has failed to initiate a process of structural transformation, reallocating economic activity from low-productivity sectors (such as agricultural activities) to highly productive areas such as textiles, electronics and machine production. “The global share of Brazilian textile exports has...