Why is Brazil’s economy, despite its potential, growing at a disappointing rate? After a strong performance of 7,5% in 2010, it fell back to 1% in 2012. As late developers, emerging economies are facing simultaneously, with varied intensity, four major challenges, which are currently, and for many years, will undermine their growth performance. These challenges are identified as: 1) the middle-income trap, 2) the competitive trap 3) the globalization trap, and 4) the Dutch disease. This presentation will define each problem using examples within BRIC countries of the mechanisms at play. Added to these challenges, Brazil’s peculiar state led development model comes at a cost not captured by the traditional prescriptions over what has been identifies as the “custo Brazil”. This hybrid system of economic governance is responsible for the creation of grabber friendly institutions with multiple vested interests making reform slow and expensive.
Philippe Faucher is professor and former Chair of the Political Science Department of the Faculty of Arts and Sciences at the Université de Montréal (www.pol.umontreal.ca/personnel/Faucher_Philippe.htm). He teaches international political economy and globalization. He has been working on the political and economic development of Latin America, concentrating on Brazil and Mexico. His current work deals with Latin America’s political institutions and economic policies. His current research project considers what political factors are contributing to the appropriation of economic rent from natural resources in a comparative perspective. Philippe Faucher worked as consultant to the Minister of administration and reform of the state (1995), and with the science and technology Minister (1999) of the Federal government of Brazil. He was a guest professor on several occasions in Brazil (UnB), France (IEP) and Morocco. He writes a monthly column on international economics and energy for Montreal's daily newspaper La Presse (www.cerium.ca/_Faucher-Philippe).