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    • Figs A to E map the spatial distribution of income

    2018-11-09

    Figs. 2A to 3E map the spatial distribution of income per capita and labor productivity in 1872, 1919, 1949, 1980 and 2000. Though the time benchmarks are primarily determined by the Census data, they are useful to provide a fairly broad characterization of the main phases of Brazilian development. It is reasonable to assume that patterns of spatial convergence of income per capital and labor productivity were significantly different between the various development phases during the 20th century (Reis et al., 2004). Up to 1872, the incursion of economic activity into the Brazilian highlands was practically restricted to the mining areas of the Center-South region which were settled during the 18th century. Figs. 2A and 3A show the wide spatial disparities of income per capita and labor productivity in 1872. The Northeast, in particular the semi-arid areas of the hinterland, was already the poorest region of the country. The richest areas were located around Rio de Janeiro, which was then the capital and the largest port of the country, and the cities of Rio Grande and Porto Alegre in the extreme south of the country which were then the main ports for the fertile areas of the Pampas. The high income per capita levels in the Amazon region were explained by the rubber boom. From 1872 to 1920, growth was mainly driven by the export of primary commodities, in particular coffee in the Center-South region and rubber in the North region. During most of the 20th century the economic frontier moves in the southwest direction pushed by coffee and industry. Figs. 2B and 3B show that, in 1920, São Paulo, together with Rio Grande do Sul, display the highest levels of income per capita and labor productivity, both areas combining a very productive agriculture with an emerging manufacturing activities. By then, the rubber economy in the Amazon had busted. From 1920 to 1950, the country completed the first stage of an import substitution industrialization process based mainly upon non-durable consumer goods industry. During this period the city of São Paulo and her surroundings consolidate their place as the order PalMitoyl Tripeptide-1 industrial pole of the country. Figs. 2C and 3C show that the concentration of income per capita in São Paulo is intensified by the mid-century when urbanization and the import substitution industrialization processes reached their peaks. Supplementing the industrial boom of São Paulo, coffee and soybean cultivation explains the spread of high income per capita towards the southwest areas of São Paulo and Paraná. From 1950 to 1980, coupled to a strong urbanization process, high trade protection, and strong state intervention, the import substitution industrialization deepened going into durable consumer, basic raw material and capital goods industries. By the end of this period, Brazil was perhaps the most autarkic economy of contemporary world with an import coefficient close to 5% of GDP, out of which non-oil imports responded for less than 3% of GDP. Figs. 2D and 3D show that during this period, economic activity definitely turned towards the northwest direction led both by the change in the location of the federal capital to Brasilia and the expansion of the agricultural frontier led by cattle, rice, corn and soybean. After 1980, all the bad things came together: the debt crisis, hyperinflation, and stagnation. In the ensuing decades the unavoidable policies were stabilization, fiscal adjustment and liberalization which are still lurking. Trade liberalization policies eliminated a large part of the bias against exports of primary commodities. During this period, agricultural and mineral exports were the main sources of growth. Demographically, the country faced the end of the urbanization process and the beginning of the population ageing process. With the end of the urbanization and import substitution processes, the high levels of income per capita start spreading towards the agricultural frontier in the Center-West and North regions. São Paulo and Rio Grande do Sul kept their leading positions while the Northeast region lagged far behind the rest of the country. By 2000, both in terms of income per capita and labor productivity there is a clear divide of the country in the northwest-southeast direction.