1 Brazil, the Global (Financial) Crisis and Innovation José E Cassiolato RedeSist - International...
-
Upload
brittney-thomas -
Category
Documents
-
view
215 -
download
1
Transcript of 1 Brazil, the Global (Financial) Crisis and Innovation José E Cassiolato RedeSist - International...
1
Brazil, the Global (Financial) Crisis and Innovation
José E CassiolatoRedeSist - www.redesist.ie.ufrj.br
International Seminar on Innovation and Development under Globalization:
BRICS Experience
Trivandrum, 19-21 August 2009
2
Structure
• 1 – A financial crisis?• 2- Impacts on Brazil• 3 – What next
3
A financial crisis?
• Financial crisis, recession, depression …• A crisis in the capitalist system • or a crisis of the capitalist system?
4
Present economic crisis as a crisis of an accumulation regime which is intensive in the use of oil and other minerals in the mass production and consumption of autos and other consumer durables
• Crisis as an expression in a specific historical context of the internally created limits (“internal barriers”) that capital runs up against• these barriers manifest themselves in an
interconnected manner• by the fall in the rate of profit and • in periodic crises of massive overproduction
• Great disagreement on the measurement of the rate of profit
• The rate of investment (nearest approximation to the accumulation of physical capital) provides an expression of capitalists’ propensity to accumulate in real capital and so gives an indication of the way they view the profitability of such investment
• Capital devises ways to offset the fall in the rate of profit and also to defer the moment commodities (goods) become impossible to sell and overproduction is manifest
5
• Main mechanisms used by “advanced economies” for offsetting fall in profit and deferring overproduction :• High foreign investment in “emerging
economies”, notably China• Strong increase in the rate of exploitation from
the 1980s onwards
•extension of the working year (in the USA in manufacturing nearly two weeks more in 2002 than in 1982).
•Containment and fall of real wages• Massive accumulation in financial services• Massive recourse to debt
6
Share of wages on GDP
1975 2006
EU - 15 69.9% 57.8%
Japan 76% 60%
USA 65.9%* 60.9%**
Source: Sarfati 2008; Notes: * - 1970; ** - 2005
0
500
1000
1500
2000
2500
US GDP Dow Jones
US – The diverging growth of NYSE and GDP
7
USA - Profits and net investment as % of GDP 1960-2006Finance as a crisis deferring mechanism
USA - Profits of the financial sector as a % of total profits (5-year moving average)
8
• Finance as a crisis deferring mechanism • Personal debt (consumer & mortgage) to offset
the fall of workers’ wages in a context of low levels of domestic investment
• Creation of the so-called “wealth effect” from trading of fictitious capital (shares & bonds)
• Accumulation of fictitious capital produces nothing in itself, but it can spur some sectors until the financial crisis breaks out
• investment in offices and buildings• expenditure from financial salaries &
bonuses
9
Global savings, investment and current account
10
The crisis in Brazil
11
IT DID NOT AFFECT MOST PEOPLE ...Brazil – Gini Index – 6 main metropolitan areasMarch 2002 – June 2009
Crisis
12
Brazil – Poverty Rate (%) – 6 main metropolitan areas March 2002 to June 2009March 2002
June 2009
June 08
June 09
13
The importance of public nstituionsBrazil – Share of Public Banks in Financial System
14
Exports to China are helping a lot
• 1st half of 2009 exports to China overtook exports to USA• Exports to China:
• US$ 10.4 Jan-July 2009 against US$ 16.4 – whole 2008• But mostly basic goods …
0
10
20
30
40
50
60
70
80
90
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Basic Semi-manufactured Manufactured
15
But ...Fiscal Stimulus Programmes (% of GDP)
16
Brazil – What next …
17
Brazil - Specialization
17
Revealed comparative advantage1967 – 2006
Billions of GDP – PPA 2005
Source : CEPII,
en millièmes du PIB courant
Autres produits agricoles 9,7 Pétrole brut -5,2Minerais de fer 2,9 Gaz naturel -2,2Prod. agric. non comestibles 2,2 Matériel de télécommunication -1,6Sucre 2,1 Fournitures électriques -1,1Conserves végétales 1,3 Moteurs -1,0Minerais non ferreux 0,9 Chimie organique de base -0,9Fer et acier 0,9 Métallurgie non ferreuse -0,8Aliments pour animaux 0,7 Quincaillerie -0,8Produits de toilette 0,6 Produits raffinés du pétrole -0,8Cuirs 0,5 Aéronautique et espace -0,8
en millièmes du PIB courant
Minerais de fer 8,5 Aéronautique et espace -3,5Autres produits agricoles 7,9 Pétrole brut -3,5Fer et acier 4,8 Matériel de télécommunication -2,6Viandes et poissons 4,5 Engrais -2,6Sucre 4,5 Composants électroniques -2,5Cuirs 2,2 Produits pharmaceutiques -2,5Papier 1,6 Matériel informatique -2,5Aliments pour animaux 1,5 Gaz naturel -2,0Véhicules utilitaires 1,3 Produits raffinés du pétrole -1,9Automobiles particulières 1,1 Machines spécialisées -1,9
1967Points forts Points faibles
2006Points forts Points faibles
18
• Well positioned for a “sustainable” techno-economic paradigm• Good S&T capabilities• Natural resources and endowments (water, clean energies,
etc)• Possibility of deepening inclusion of marginalized segments
of society• But with problems, e.g
• External• Geo-political: how to re-specialize western economies
and what will they “offer” to developing countries????• Internal
• Difficulties in finding political consensus towards a national long term project (the blind colonized elite, etc.)
• Financial capital is not dead !!!• The role of TNCs