Brazil has potential for global production chains, according to IBRE

25 October 2013

Although they represent a very small percentage of exchanges on a world level, Brazil has the potential to participate in the formation of global production chains. This is the evaluation of Lia Valls, researcher at the Applied Economics department of the Brazilian Institute of Economics (FGV/IBRE).

Lia highlights that sectors such as food - which presents a diversified industrial base in the country and high stock of foreign capital - already demonstrate having the conditions to develop under the fragmentation system of goods production among countries. The starting point to lead a regional hub, however, is to ensure that the coordination cost and uncertainties are smaller than the gains for the exploitation of local comparative advantages, emphasizes the researcher, who added, In South America, these costs are still high.

Check out the complete analysis by the economist on IBRE's website here (in Portuguese).

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