Increased Productivity Key to Brazil’s Growth Says World Bank

By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – According to a just-released study from the World Bank, Brazil must increase its labor productivity in order to grow its stagnant economy. At the country’s current productivity rate, Brazil’s gross domestic product (GDP) is estimated to grow 1.8 percent, but should the country boost productivity, says the World Bank, it could rise to as much as 4.4 percent.

“This [productivity increase] does not mean making people work longer hours, but [using] resources more efficiently,” explained World Bank chief economist Mark Dutz, to the local media on Wednesday, March 7th.

“The most important thing,” he stressed, “is to use Brazil’s resources more efficiently.”

In Brazil, the labor productivity rate has increased 0.7 percent a year since the mid-90s. Labor productivity measures the amount of goods and services that a worker produces in a given amount of time and is a common indicator of a country’s economic growth.

According to the report, entitled “Emprego e crescimento: a agenda da produtividade” (Employment and Growth: the Productivity Agenda), the average Brazilian worker today is only 17 percent more productive than they were twenty years ago. By comparison, the average worker in countries with robust economies is 34 percent more productive than twenty years ago.

For Brazil to increase labor productivity, the World Bank says it most focus on four areas: comprehensive tax reform, improved public policy coordination and evaluation, elimination of ineffective subsidies, and promotion of greater trade with companies both in and out of the country.

“The restrictions on international trade are particularly large in Brazil. The barriers to foreign competition prevent Brazil from learning from the best in the world,” said Dutz.

Speaking at a ceremony on Wednesday marking the publication of the World Bank report, Brazil’s Chief of Staff Eliseu Padilha welcomed the World Bank’s recommendations.

“We must keep Brazil in this growth and development trajectory,” expressed Padilha. “As the World Bank emphasized, Brazil deserves, and we believe that Brazilians, especially, deserve a growth more sustainable and inclusive, so that the country can have a fully equipped workforce with competence for the 21st century.”