From semi-strongstagnationstrong to growth in a sino-centric market.pdfVIP

Brazilian Journal of Political Economy, vol. 28, nº 1 (109), pp. 3- 27, January-March/2008 From semi-stagnation to growth in a sino-centric market ANTONIO BARROS DE CASTRO* According to recent available information, the Brazilian economy may be entering a cycle of sustained growth. The dominant current interpretation points to the progresses made in terms of monetary stability, Balance of Payments and structural reforms. Indeed, without monetary stability and the commercial opening of the economy, investments would not be increasing and credit growth would not be helping the emergence of millions of new consumers. But these achievements should be taken as generally conditioning, rather than actually shaping the new picture. Some unexpected (not rarely positive) consequences of overcoming the long enduring semi-stagnation, the emergence of China as a major player, and its consequences on the necessary re-structuring of the Brazilian industry, seem to be decisive in the present day redefinition of the Brazilian GDP growth potential. Key-words: semi-stagnation, sino-centric, growth. JEL Classification: 0, 011, F4. THE LONG MARCH TOWARDS OVERCOMING SEMI-STAGNATION From 1947, when a systematic recording of Domestic Accounting started to be made, to 1980, the Brazilian economy grew at an average annual rate of 7.5%. At that time, the average growth of a group of national economies then considered as underdeveloped was 5.7%,1 while the Japanese economy, the unquestioned growth record-holder, achieved an average expansion of 8% per annum. In the very year of 1980, the Brazilian economy still showed a strong * BNDES, President Advisor, Emeritus Professor, Federal University of Rio de Janeiro. E-mail: abarroscastro@.br. The author is grateful to Francisc