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CIAO DATE: 12/00

Before Neoliberalism: Brazil's Export-Oriented Growth and the Failed Embedded Politics of Entrepreneurs 1

Eduardo R. Gomes *

International Studies Association
41th Annual Convention
Los Angeles, CA.
March 14-18, 2000


I. Brazil's Export-oriented Growth and the Politics of Reforms

Brazil's Export-oriented Growth and the Politics of Reforms

This is an analysis of the impacts of the export-oriented growth of Brazil's manufacturing industry on the politics of that country's entrepreneurs, from the late 1960s to the late 1980s.

The outward expansion of Brazil's industry is an important element of the early changes of the country's import-substitution model, and it must have also been influential in the political shaping of strategic actors for Brazil's development such as business.

The effects of this industrial export drive on local capitalists have not be yet extensively studied and my interest in this topic is basically aimed at figuring how business groups have been politically influenced by the early outward reorientation of import-substitution, including as a way of gaining better insights on the politics of transition toward open economies 2 .

The literature on neoliberal reforms in Third World countries has largely relied on generic structural cleavages for figuring the identity and the collective actions of these and of other social actors and this is hardly sufficient for an adequate understanding of those changes.

The recent transitions of authoritarian, newly-industrializing countries to democratic and market-oriented societies have involved frequent political changes, policy redefinitions, not to mention unsustained economic performance. This complex unfolding of these dual transitions makes it very difficult to understand these transformations based on bipolar social differentiation, as they have been commonly approached.

Garretón, for instance, has specifically acknowledged this problem. Focusing on the Chilean economic and political reforms, he asked if there was any "space for the reconstruction of social and political actors without which societies are unable to reform and transform themselves," instead of taking them as a given (Garretón, 1994: 217). Besides, by arguing in favor of a theory that "assigns to actors and subjects the historical capacity to create and mold dynamics and structures," Garretón sets the political economy approach aside, since it "always refers to structural forces that conform to structural logic from which actors are inferred and within which they enjoy little autonomy" (Garretón, 1994: 217; cf. also Heredia, 1994: 265; Geddes, 1995).

In fact, the even fewer direct references to the "export-oriented" drive after the crisis of import-substitution also seem to rely on "given" structural cleavages, with similar limitations. In a review article published more than ten years ago, Haggard suggested that the "ability to shift policy toward an outward-looking growth strategy rests on a certain political autonomy from short-term interests of the protected private sector" (Haggard, 1986: 357).

Haggard's view echoes O'Donnell's assumption of "bureaucratic-authoritarian" regimes as a decisive condition for solving the "pressing" bottlenecks of import-substitution, but there may be other possibilities of class coalitions in favor of an export drive of the manufacturing industry (O'Donnell, 1979).

In an evaluation of the options after import-substitution, Kaufman, for example, suggested that export promotion of manufactured goods "probably involves the widest number of potential coalitions and cleavages, since so much would depend on the types of products exported and whether they are sold in a world or regional markets," and not on a full autonomy from the existing interests, as suggested above (Kaufman, 1979: 211; Patton, 1989).

As export-promotion strategies have been set within different coalitions, they may as well involve distinct impacts on the classes' politics, issues that have been hardly explored beyond the above contributions. Therefore, a more detailed concern with topics such as ideology and collective actions of important social actors in the reforms of developmentalist inward-oriented states is needed and this study is framed toward filling this void.


II. Business Politics in Brazil's Import-substitution and After

As other Latin American countries, Brazil's import-substitution industrialization was developed targeting only the domestic market, based on protectionism, on an overvalued exchange rate, on a variety of incentives for foreign direct investment in addition to an extensive range of economic activities carried by the state (as entrepreneur, as provider of basic services, etc.) (Tavares, 1972; Hirschman, 1968).

Therefore, given that this governmental intervention was commonly carried out through a variety of agencies poorly articulated, the state ended up having a quite influential role in shaping business politics toward a fragmented interest articulation. To this extent, during Brazil's industrialization, entrepreneurs have basically worked for influencing the process of policy-making or for getting specific privileges from the state through various channels of interaction with public spheres, such as bureaucratic rings, policy networks, by and large, with short-term demands, in a narrow and dispersed way (Diniz and Lima Jr., 1986; Leopoldi, 1984; Schmitter, 1971; Abranches, 1978; Evans, 1979).

On the other hand, in the process of getting collectively organized, capitalists have relied on the corporatist institutions built by the state in the 1930s, as well as on their private sectoral associations constructed since the 1950s, and these organizational structures have also had a significant fragmenting impact on the patterns of business collective actions (Erickson, 1977; Diniz and Boschi, 1979; Boschi, 1979) 3 .

Because of this system of interest organization, set by the state in the 1930s, capitalists ended up exchanging their organizational autonomy for a relatively meaningless monopoly of organization and representation. Nevertheless, as state initiatives toward promoting development after the 1929 crisis were successful, this organizational format became a partially important arena for business politics, too (Diniz and Lima Jr., 1986) 4 .

Since the 1950s, capitalists autonomously began to form other corporatist organizations outside the constraints of the official structure, rooted in the industrial sectors of durable and intermediate goods that were emerging in the country at that point. Given their voluntary basis, these associations could control free-riders, and they became more representative of the members' interests 5 .

However, as these organizations were also built for influencing particular policy arenas, they ended up generating politico-organizational impacts similar to those of the official structure. They also became partially subordinated to the state, not to mention that they became quite narrowly focused in the demands articulated (Diniz and Boschi, 1979; Abranches, 1978; Martins, 1985) 6 .

Beginning in the mid-1960s, however, Brazil's government tried to modify the country's inward-oriented industrialization, and it set up a series of export-promotion policies for the manufacturing industry which were successful in stimulating its outward expansion (Table n. 1, Appendix).

To this extent, the involvement with international markets must be considered for understanding the outline of business politics after import-substitution - and before neoliberalism - and an important political issue that emerges is the impact of this outward expansion of the manufacturing industry in the 1970s and 1980s on the dispersed and fragmented pattern of "subordinate corporatist politics" of the industrial entrepreneurs, formed during the country's import-substitution industrialization.

This is where lies the central concern of this research, and some of the most important questions for dealing with this topic are: How did the export-oriented growth of Brazil's manufacturing industry affect previous patterns of subordinate corporatist politics of the industrial bourgeoisie? Has the outward expansion reinforced the existing subordinate corporatist practices? Or has the export-oriented growth stimulated changes in the business politics? How? To what extent? Why? What accounts for continuities and/or for transformations in the patterns of political behavior of the Brazilian industrialists as they got engaged in international markets? What are the most important implications of these transformations of business politics for Brazil's current development challenges?

As will be indicated in the next section, the export-promotion model is a particularly interesting influence to be studied for understanding the role of business in Brazil's recent development challenges, given that, for the very first time, long protected entrepreneurs were put in face of the choice between improving productivity to face competitive markets out of their control (based on valuable subsidies), or keeping their economic activities restricted to the closed domestic market. To this extent, the supportive policies for industrial exports involved no particular incentive for new collective actions, beyond competition abroad. Domestic market was kept closed to foreign competitors and these policies were composed of a variety of subsidies from different governmental agencies, with little - if any - coordination, in a "policentric" decision-making arena, as appropriately portrayed by Lima Jr. and Lima (1987).

However, as a way of opening the research for considering the specific influence state intervention may have had in the political outcomes on the domestic level, this study is substantively focused on one sector that was openly stimulated towards engaging in export activities - the textile industry - and on a second one that had its outward expansion uniquely framed in a sectoral plan - the paper and cellulose industry. As "representatives" of the easy and late phases of import-substitution respectively, those two distinct sectors embody different economic conditions for internationalization.

Based on these sectors, two of those which had substantially engaged into exports, this study will show that the exporting industrialists from these sectors engaged in absolutely new collective actions, relatively out of the state guidelines, toward long-term and encompassing goals. Quite distinct from previous patterns of the subordinate corporatist politics, these initiatives approach what could be labeled "sectoral corporatism".

However, neither of the efforts was ever implemented nor a more concerted relationship between business and the state was ever built. As it appears that there was significant political room for another format of state intervention, with the announcement of the New Industrial Policy in 1988, this paper ends by suggesting that this outcome may conform to a case of "failed embeddedness", opening a discussion about some possible limitations of the concept of embeddedness itself (Evans, 1992; Cheibub, 1988).


III. Brazil's Export Promotion Policies and the Country's Adjustment

Brazil began to carry out a set of policies specifically targeted at promoting exports of manufactured goods since the mid-1960s, basically as an effort for overcoming some difficulties related to the import-substitution model of industrialization, long followed by the country.

These problems derived from inner conditions of import-substitution itself, particularly its import-intensity. Most governments since World War II have had no concern with improving Brazil's terms of trade and, as time went by, the value of country's exports, largely based on coffee, stagnated. In order to keep sustained growth, Brazil continuously ran balance of payment deficits, which resulted in unmanageable government budgets and into a chronic and rising inflation (Tavares, 1972; Hirschman, 1968; Skidmore, 1977).

In the early 1960s, these economic difficulties merged with critical injunctions of populist politics, resulting into a broad politico-institutional crisis, and ensuing the installation of an authoritarian regime through a military coup d'état, backed by some civilian groups. The new regime dismantled the country's democracy through waves of severe repressive policies, and it also carried out many economic reforms (Skidmore, 1967; Stepan, 1973).

Brazil, however, followed a particular path within the new authoritarian regimes of Latin America, based on the resumption of a strategy of state-led development and policies for stimulating an overseas expansion of local manufacturing industry. Originally implemented as a mechanism to help expand the growth of Brazil's industrial park, the export-promotion policies of manufactured goods served other needs as well, such as the necessity for improving the balance of payments, the need of paying the country's large foreign debt, among others (Kaufman, 1979; Serra, 1979).

The export-oriented growth of Brazil's manufacturing industry began in the second half of the 1960s with the application of a full array of export incentives and subsidies, such as assorted tax-exemptions, subsidized credit lines, devaluation, along with others. These policies were easily and autonomously carried out by the new authoritarian regime, and they generated a quite positive response from entrepreneurs (Clements and McClaim,1990).

I take 1968 as the starting point of this first phase research, as it was the moment when the government introduced the crawling-peg system of devaluation. This policy was decisive for preventing the erosion of export revenues due to inflation and, therefore, for building business confidence in foreign sales and the general impact of this support can be figured by the large rate of subsidy offered (Table n. 2, Appendix).

The initial steps toward promoting exports took place in a favorable international environment, and thus this period can be thought of as an "easy phase of export-oriented growth", if we can rely on the periodization of import-substitution for figuring what comes after, as Cason insightfully did (Cason, 1993; Lago, 1992).

Shortly after, however, Brazil's exports faced the hard impacts of the first oil shock, and this initiated what can be seen as the second and "difficult" period of the outward-oriented expansion (1974-1979), keeping the previous analogy with the phases of import-substitution. International demand declined, and Brazil had also to deal with growing protectionism abroad. On the domestic front, Brazil had chosen an expansionary response to the oil crisis and, if this provided for high growth rates, it also resulted in problematic foreign indebtedness, as well as growing inflation and high interest rates.

During the 1980s, because of previous policy options and of the second oil shock, Brazil faced even more difficult challenges, particularly a larger foreign debt and yearly inflation rates skyrocketing from three to four digits rates. Export expansion declined and Brazil's economic policies lost coherence, as they were pressed by many conflicting forces, as the need for producing trade surpluses and the need for stabilizing inflation carried out through a number of heterodox shocks. The transition to democracy, starting in 1985, brought out a concern with redistribution. With all these economic difficulties both at home and abroad, this period can be seen as the "critical" phase of export-oriented growth (Frieden, 1991; Modiano, 1992; Table n.3, Appendix).

Since the late 1980s/early 1990s, Brazil entered a complex process of deregulation, privatization and trade liberalization, and no room was left for any specific active policy of export-promotion as before, bringing to a close the period covered by this research.


IV. The Textile Industrialists in the Export-oriented Growth

Brazil's textile industry is a paradigmatic example of the light-consumer goods industry consolidated in the early and "easy" stage of import-substitution. Relying on unsteady protectionist barriers before 1930, the textile industry was originally developed based on local capital reacting to attractive opportunities for investment, resulting from the consumption market formed in the fringes of the agro-exporting economy and from the disruptions of Brazilian imports of textile products (Stein, 1979).

This sector expanded with the country's import-substitution process, but the relative importance of the textile industry in the manufacturing sector as a whole declined, as more modern sectors began to produce larger shares of the country's GDP. The participation of the textile industry in Brazil's GDP went down from 22.2 in 1939 to 10.1% in 1969 (Baer and Villela, 1985: 299, 302).

Since its early stages, the textile industry has been formed of many micro, small, and medium enterprises and a small quantity of large companies (Braga, 1988: 123). Anyway, the large enterprises are the most active members of their group at their main class association, SINDITEXTIL (Syndicate of the Textile and Weaving Industry of the State of São Paulo). Despite being a state organization, SINDITEXTIL is connected to a parallel association of national scope, ABIT (Brazilian Association of the Textile Industry), and can be taken as the most important in the country.

For various reasons, foreign companies have kept a minor presence in this sector, either in joint ventures or by themselves. Despite the origins and features of this sector, the textile industry got engaged in export activities shortly after incentives were offered, and its outward-oriented drive has been quite impressive (Table n. 4, Appendix).

The initial "easy" period of export-promotion witnessed a significant expansion of textile exports, after an erratic evolution between 1964 and 1967. The average yearly growth rate for the period 1968-1973 was approximately 75%, and the total output grew from US$ 22,7 in 1968 to US$ 324,8 million in 1973 (Table n. 4, Appendix).

During this early stage, the textile industrialists expressed their adherence to the export activities through increased foreign sales, new investments and open support to the export-promotion policies. They have also constantly demanded an expansion of existing benefits for their engagement in foreign sales, usually through short-term and narrowly focused requests.

In 1972, for example, Edmundo Kehdi, president of the Textile Association of the State of São Paulo (ATESP), demanded an expansion of subsidized credit for exports to reflect what he saw as a significant rise in exports from the textile sector in that year. Subsidized credit was qualified by him as an extremely positive factor in the bid to reduce the final price of exported goods (GL Dec. 1, 1972). He also considered the price reduction allowed by the subsidies as their main justification: "It is precisely at that initial phase, he said, that the businessperson lacks technical assets and other resources, and he depends very much on his price to be able to compete in international markets". Besides, Kehdi argued the case for export incentives in general as an essential ingredient in the drive to conquer new markets, and he tried to make his point by recalling that Japan had resorted to the same strategy, for the same reasons (GL Dec. 1, 1972).

By no means was Kehdi alone in his efforts. In many occasions throughout this phase, SINDITEXTIL and other entrepreneurs tried to enhance this and other subsidies, largely, with positive results.

The late 1960s and the early 1970s were a period of fine-tuning of the main incentives. This adjustment involved frequent negotiations on subsidies such as exemptions from States Sales Tax and from Industrial Products Tax with different authorities and agencies, both at state and federal levels (CT Mar. 12, Sep. 29, 1969, Jul. 22, 1970; Apr. 28, 1971; Mar. 8, 1972, Jul. 5, 1972, Aug. 16, 1972).

During those initial years of the export drive, the engagement into export activities had also enhanced the concerns of the businesspeople with the industry productive conditions (supplying, financing, domestic and international consumption, along with others), but these considerations have never evolved into new collective actions. Up to the early 1980s, even when industrialists could produce more comprehensive diagnosis, their request was generally framed as a topical demand.

As a matter of fact, even in face of actual difficulties of becoming competitive abroad, there was no speculation about improving productivity or other initiatives that could contribute to price reductions. In accordance with the practices of subordinate corporatism, the only solution sought for these and of other problems was the expansion of state support on case-by-case basis.

For example, in mid-1971, when exports to the United States were resumed after an interruption of four months, an important businessperson involved in foreign sales blamed the domestic price of cotton for Brazil's lack of competitiveness in North America. After acknowledging that this market had been re-conquered by Asian producers, the industrialist announced - somewhat proudly - that the American buyers were finally "forced to accept ... Brazilian prices," given the exhaustion of export quotas of those suppliers from the Far East (JB Jun. 12, 1971).

In the early 1970s, the trade performance of the textile significantly fell for two years after 1974. Only in 1977, exports resumed an upward tendency, but at lower rates than before. From an average yearly growth rate of 75% of exports in the "easy" period, this second half of the 1970s registered an average increase of only 16% per year (Table n. 4, Appendix). In its efforts to sustain the country's high growth rates in an adverse international environment, the new Geisel administration expanded economic interventionism. Inflation, however, resumed an upward tendency, affecting the performance of the sector at home as well, with high interest rates, declining sales and growing unemployment.

The government also began to perceive a couple of shortcomings of the export performance of the textile industry and all these problems turned the second half of the 1970s indeed a "difficult" period. For the time being, textile industrialists were not challenged by the critiques from public authorities.

As a consequence, they kept on demanding new and/or an expansion of export subsidies in a dispersed way, very much within subordinate corporatist patterns. They engaged in no new type of collective action for dealing with the new circumstances. Actually, the effects of the economic crisis of the mid-1970s were extensive, affecting as much the Northeastern as the Southern regions of the country, where the jobless were estimated in 25,000.

Antonio Carlos Brito Maciel, president of the Syndicate of the Textile and the Weaving Industries of the State of Pernambuco (from Brazil's less developed Northeast region), singled out the three most strongest factors for the crisis, as part of a broader diagnosis of sectoral difficulties: high price of cotton, high costs for domestic finance when compared with competitors' costs abroad, and redundant capacity of the textile manufacturing park (GL Feb. 17 and 18, 1975).

Brito Maciel went on to recall that, in the long run, expensive credit inhibits modernization of the industry. However, this concern was never given a major consideration by the business environment up to the second half of the 1980s (GL Feb. 17, 1975).

As they had long done before, businesspeople from Pernambuco simply demanded genuine action from the high-level National Monetary Council (CMN) requesting new subsidies for the purchase of machines and raw materials, both in the short and long-term, and according to the usual conditions of subsidized credit for export operations, but they were not successful (GL Feb. 17, 1975).

Furthermore, in an official message to the Bank of Brazil through the state governor, textile merchants from Pernambuco came to the fore to show acceptance of the minimum price for cotton "to avoid the collapse of the sector and resulting paralysis of purchasing power and rising unemployment." In exchange, however, they called for better financial conditions for the purchase of this raw material, considering the negative impact of that subsidy on the industry's ability to compete internationally (GL Feb. 17, 1975). Surprisingly enough, subsidies for oneself were being justified by subsidies to someone else.

At that point, export-oriented growth had also put this industry in touch with a tightly regulated international market, and Brazil's economic foreign policy became a truly new arena for the politics of the textile industrialists, possibly reinforcing the subordinate corporatist practices.

By and large, entrepreneurs dealt with the problems on the international sphere on case-by-case basis, usually presenting specific demands for support, in general, in conflict with the governmental orientation. In fact, since the outward expansion of the manufacturing industry began, Brazil had faced a couple of problems with foreign countries because of its export activities, including technical difficulties in the handling of transactions (JB Apr. 29, 1972).

In 1977, for example, the European Economic Commission decided to include two more textile products in the quotas for exports from Brazil: cotton shirts sold to England and unisex underwear sent to France. These restrictions from Europe followed protests by those nations against the disturbing impact of Brazilian exports on their home market (JB Sep. 16, 1977).

As in other occasions, representatives from Brazil's textile industry reacted with various speculations, but did not express a great fear. The Ministry of Foreign Affairs classified the restriction from Europe as a routine procedure (JB Sep. 17, 1977, and Sep. 18, 1977).

Aristides Rache, vice president of the Federation of the Manufacturing Industry of the State of Minas Gerais and a textile entrepreneur, protested against the new European restriction, given that Europe represented 70% of Brazil's sales abroad. Showing himself surprised with the changes, he argued his case by stating that he also had "a promise to keep with the government to export a determined quantity of goods". In his opinion, his company could double its sales but this would be impossible due to the quotas imposed. He simply demanded that government should "improve its bargaining position over imports" (JB Sep. 17, 1977).

Brazil finally negotiated a new trade agreement with the European Economic Community, but the president of SINDITEXTIL saw this new accord for the next five years as unsatisfactory, given the small increases it included. The Ministry of Foreign Affairs, nevertheless, held the opposite view (JB Dec. 23, 1977; CT Dec. 29, 1977).

Government had an additional reason for not adopting a more aggressive position abroad: Brazil's trade partners would constantly point out that the textile sector had rarely fulfilled its quotas in the agreements and, to this extent, there was no particular reason for enlarging the allotments in the international trade accords (CT Feb. 3, 1977; CT Sep. 14, 1978).

The textile industry was the target of another retaliatory measure at the closing of 1978, now taken by the United States, though that country had already imposed pressures against the import of textile products from Brazil before that (EX Mar. 23, 1977 and JB Nov. 7, 1978).

The North American reaction to increasing consumption of imported textile products from Brazil took concrete form with the opening of a legal process in the United States demanding surtaxes to be imposed on men's and children's clothes coming from Brazil. The allegation, made on November 7, 1977, was that the competition was unfair due to the subsidies involved in the country's exports (JB Nov. 2, 1978).

After a year of complex negotiations, Brazil reached an agreement with the United States by which an export duty was to be imposed on textile, plastic, leather and rubber clothes and shoes. In return, the American government would not charge countervailing duties on those products. This measure was to take effect once the waivers of compensatory rights on such products expired in January 1979 (JB Nov. 7, 1978 and GL Nov. 8, 1978).

Named after the top negotiators from the two countries, the Bergstein-Simonsen Agreement established an export duty of 37.2%, corresponding to the total subsidies available for the textile exports, according to the United States Finances Department. It was agreed that this percentage should be applied gradually, and that it could be diminished through a corresponding reduction in subsidies or by another mutually-accepted strategy (JB Nov. 12, 1978, and Dec. 8, 1978; CT Oct., 19, 1978).

The Minister of Finances, Mario H. Simonsen defended the adoption of surtaxes for textiles because it was difficult to eliminate the premium credits of State Sales Tax and of Industrial Products Tax on a single type of product type being exported to a single country. He closed his comments by forecasting that the American retaliation would not set a precedent for other countries, which lacked legislation such as the United States Trade Act (JB Nov. 7, 1978).

In an implicit demand for more subsidies, the export director for the Indústrias Têxteis Santista from São Paulo, Armando Vivianni, expressed his hopes that Brazilian authorities would find "another formula" to make the country's products competitive in the United States. He was implicitly demanding more subsidies, and he was joined in this assessment by Edgar Arp, president of the textile syndicate of Rio de Janeiro (GL Nov. 8, 1978).

Textile exports grew at a yearly average rate of 5.3% from 1980 to 1988, and they even presented negative growth rates in three of those years (Table n. 4, Appendix). This weak performance is part of the story of the "critical 1980s", when the textile sector faced even more challenging difficulties at the international level.

On the domestic front, entrepreneurs had to deal with shifting orientations of the economic policies derived from a deteriorating economic situation. Due to a large foreign debt and to an escalating inflation that hit Brazil after the second oil shock, government zig-zagged in the economic sphere, shifting from debt payment with recession, to growth policies with stabilization, to other arrangements.

Mostly, businesspeople kept on demanding more subsidies for dealing with these and other problems, along with the subordinate corporatist pattern, in the midst of a growing criticism from the government that was pressing hard for increased exports. Nonetheless, SINDITEXTIL also autonomously tried to enhance exports by improving the resources for textile industrialists to get involved with foreign trade, through the creation of an office specifically oriented toward these goals. More than simply repeating the practices of requesting more subsidies from the state, SINDITEXTIL decided to act in a new way. In late 1981, after exports had grown at the level of 7% to 8% in the new decade, the textile syndicate tried to create a specific organization for supporting textile exporters, the Bureau for Fomenting the Exports from the Textile Industry.

The outline of the new undertaking were clearly shown in the first issue of its bulletin, when it was announced that the main goal of the Bureau would be to provide information on "matters connected to the export of manufactured textiles, in all their aspects." This support included information on the procedures for selling abroad and on opportunities to access "the model of an effective commercial exchange through direct contact with an importer" (BL Jan. 1982).

The bureau did not last long: it was in fact a redundant initiative given that the "additional" incentives it was offering were already available at SINDITEXTIL or at CACEX (Brazil's Foreign Trade Office) (BL, 1982-1985). It ended up making no difference for the scenario of the export activities of the textile industry: practically the same diagnosis that motivated the creation of the bureau was repeated a couple of times later, including in early 1988, by the president of the Brazilian Association of the Clothing Industry (FL Jan. 22, 1988; CT Jan. 21, 1988).

In fact, as the industry entered 1983, businesspeople and government representatives grew increasingly excited about another subsidy known as the "green and yellow drawback" (a reference to the colors of the Brazilian national flag) which took effect from the end of March. This mechanism was aimed to subject the inputs of export products produced in Brazil to the same subsidies as those bought abroad. With this strategy, the director of CACEX, Carlos Viacava, expressed hopes that the textile industry could reach US$ 1.5 billion in exports, almost twice the figure for the previous year (JB Feb. 7 and Mar. 29, 1983).

The green-and-yellow drawback was an old request of the textile sector. As early as 1971, industry leaders defended the extension of the drawback incentive to cotton locally produced as a way of equalizing the domestic and international prices of this input (CT Aug. 18, 1971; Mar 10, 1977).

With the collapse of the authoritarian regime in 1984/1985, trade and economic policies were subjected to demands toward redistribution, stabilization and resumption of growth on more sustained basis. This change made itself clear since 1986, when the first of the three "heterodox shocks" with price and wages freezes was implemented, aimed at a "complete" eradication of "chronic" inflation and at the same time reestablishing growth.

In fact, even before the first of the three heterodox "shocks" of the second half of the 1980s was implemented, SINIDTEXTIL president, Luis Américo Medeiros rose up to voice the concerns of the textile exporters. In February 1985, he said that: "Given that the likely anti-inflationary policy to be pursued by the Tancredo Neves administration [the first civilian president scheduled to be empowered a few weeks later], exports will be hardly supported through devaluation of the cruzeiro [Brazil's currency]" (JB Feb. 8, 1985). Not surprisingly, he added that it would be necessary to consider some kind of subsidy for helping export activities (JB Feb. 8, 1985).

The dilemma faced by the textile industry at that point was clearly perceived by Rabinovitch, from SINIDTEXTIL board of directors, who pointed out that this sector "as producer of consumer goods, is hurt by the application of a restrictive policy; as an exporter and wage payer, it has in the devaluation a source of improvement its competitiveness (EX May 2, 1984).

The first heterodox stabilization plan based on wage and prices freeze, named after the new currency it introduced, the Cruzado, was implemented in February 1986, resulting in the dilemma anticipated. Shortly after the first of the heterodox plan was set up, the director of ABRAJEANS, Ricardo de Castro, declared that the overheated consumption resulting from the wage and price freezes had provoked a series of problems for the textile sector, such as overpricing, lack of raw material, canceling of buying orders, along with others (JB Mar. 23, 1986; EX Mar. 31, 1986).

Later in the year, Ivah Pacheco, an overseer of a large textile company went further and said that "the Brazilian textile industry was not prepared to the increased demand, reaching the production of 1.1 million tons of fabrics, after having produced only 800.000 tons" (JB Sep. 23, 1986, Nov. 27, 1986, Oct. 10, 1986; GL Dec. 1, 1986).

In fact, this plan and later ones had only temporary success, given that they all lacked complementary policies for fiscal soundness, enhanced domestic competition, along with other initiatives. All of them caused similar problems for textile and other exports: the increased domestic demand harmed the foreign sales, and the fast heating of the economic activity generated a number of conflicts among suppliers, industrialists, wholesalers, retailers, and, of course, consumers.

Actually, in 1985, export revenues had a negative growth rate of 22% in relation to 1984, whereas in 1986, the yearly growth level was minus 6%. Exports resumed a positive growth only in 1987 (EX Mar. 31, 1986; Table n. 4, Appendix).

In the eve of the second one in mid-1987, SINDITEXTIL focused on particular but revealing problem and complained to the government against the price increase it had allowed for some types artificial fibers for the industry, right before the new price freeze.

Textile leaders then said that the industry was being weakened because of the lack of coordination of policies related to raw material. They requested that this price increase be revoked at the same time they demanded a price freeze for cotton (CT Jun. 16, 1987). They were partially successful in their requests as the increase allowed for fibers was lowered from 25 to 18%, but cotton prices continued to rise out of governmental control (CT Jul. 9, 1987; Sep. 4, 1987).

Earlier than that, limitations for supplying increased domestic consumption derived from the Cruzado Plan enhanced an existing concern with the technological backwardness of the textile industry, and this preoccupation was at the root of the call for a comprehensive modernization plan heralded by SINDITEXTIL in May 1986.

At that point, the syndicate president, Medeiros urged the members of the industry to make a joint effort for a deep analysis the sector and for planning solutions for long-term growth, at least, up to the year 2000. Accordingly, the plan resulting from these efforts became known as "Plan 2000", and it was essentially intended at expanding Brazil's exports twice or more in the following fourteen years, with an enlarged participation of finished textile products (JB May 29, 1986; FL Jul. 17, 1986).

The small participation of elaborated products in Brazil's export profile of textile goods was one of the major determinants for the drafting of this plan, according to a technical assistant involved in this effort (Simas, 1996, Interview). This perception echoed a critique made by CACEX representatives in the early years of the decade.

Scheduled to be finished in few months, the formulation of the plan involved all sectors relevant to the textile industry, from capital goods industry to the National Bank for Economic and Social Development (BNDES), going through the Technological Center of the Chemical and Textile Industry, not to mention, of course, representatives from the textile and clothing industries from all over the country (CNIT, 1986).

According to the same Simas, the latter institution was chosen by the entrepreneurs to organize the plan because it was a "neutral institution", a suggestion of how much was at stake at that point (Simas, 1996, Interview).

In order to define its claims, the plan referred to a previous comprehensive support provided to the auto industry in 1968 as an inspiration for the project prepared for the textile sector. The Plan 2000, however, actually centered itself on presenting "specific policies based on the improvement of existing provisions" instead of advancing generic goal or unrealistic instruments (CNIT, 1986).

The central problem addressed by the Plan 2000 was indeed the technological backwardness of the textile industry, and it recognized the need for a thorough renovation of all subsectors of this industry (CNIT, 1986). To this extent, the Plan recommended a mix of assorted tax reduction for imports of capital goods, and the reactivation of the "Plans for Nationalization of Textile Machinery" involving substantial subsidies for the local capital goods industry (CNIT, 1986: 13).

The Plan 2000 projected investments of US$ 6.6 billion, from which US$ 2.6 billion would go to equipment made in Brazil and US$ 4.0 billion to imported machines, in an expansion of 80% of the capital goods for the sector in fourteen years (CNIT, 1986).

With such a planning, the textile industry was overcoming the decision-making policentrism and the access policentrism and possibly the practices of subordinate corporatism, but not without conflicts (Lima Jr. and Lima, 1987).

Opening itself to cross-sectoral negotiations, the textile sector tried to include the local capital goods industry in the Plan 2000 without causing any major difficulty to this sector. Armando Vivianni, a member of SINDITEXTIL board of directors, pictured the negotiations with the capital goods sector in very pragmatic terms: "The Brazilian textile industry is in need of imports now for gaining time. However, as the textile reaches a better definition of its long term goals, the machine industry will also be able to invest more securely... It is decisive that, once the needed imports are made, the national machine sector does not get impoverished". In spite of this attitude, the capital goods industry constantly opposed the propositions from the textile sector for partially exempting imports of machines (FL Jul. 17, 1986; JB Jul. 10, 1986; EX Jul. 9, 1986).

In late 1987, the situation of the jeans industry echoed the plan's diagnosis. A leading businessperson from the sector, Andre Ranschburg, observed that the factors that favored Brazil's textile exports, such as the low cost of the labor force and the undervalued exchange rate, were hardly compensating the low productivity of the sector derived from its technological backwardness (IE/SR Dec. 1, 1987).

Despite the changes observed during the 1980s, the practice of requesting state protectionism through specific subsidies was not totally abandoned. When the decade was finishing. As late as 1987, Luis A. Medeiros demanded to the Minister of Finances, Mailson da Nobrega the reenactment of the exemption from income tax over the profits on exports.

According to the textile leader, without this subsidy, there will "certainly be a noticeable reduction on the volume of textile exports next year, since the profits made by a number of enterprises are basically derived from this fiscal incentive." He went on and indicated that not only the firms could suffer losses, but also Brazil's trade balance. In order to justify the request, he stressed that the textile industry was facing a difficult situation abroad, a "highly competitive" market, with declining growth rates (CT, Dec. 30, 1987).

Last, but not the least, it must be added that, in the last decade, textile entrepreneurs improved their gains through their participation in the trade conventions. Brazil negotiated a number of trade agreements with various nations and, in most of them, the textile businesspeople got actively involved in setting the parameters with fewer conflicts with the government, and in better conditions for the Brazilian industrialists involved in export activities.

All things considered, it should be finally mentioned that this plan was never implemented. It actually turned into a new – and more ambitious - proposal for an official sectoral policy under the so-called "New Industrial Policy" of 1989, but, even under this framework, nothing was made along the lines the industry had worked for.


V. The Paper and Pulp Industrialists in the Export-oriented Growth

The paper and pulp industry was a minor offspring of the easy phase of the import-substitution process, and it was partly developed in Brazil since the mid-1950s, as part of President Kubitschek's Target Plan of the second half of the 1950s (Geddes, 1994).

The paper industry grew at an yearly average rate of 7.6% during the period 1955-1964, at a level similar to that of the manufacturing industry in general. A typical sector of the "difficult" phase of import substitution, the paper industry also expanded its participation in the country's industrial output from 2.1, in 1949, to 3.3%, in 1967 (Baer, 1985: 217, 218).

The redefinition of the Brazilian cellulose industry in the direction of foreign markets can be linked to a conference of April, 1973, called by the National Bank for Economic and Social Development (BNDES) to exam the problems and perspectives of ten selected sectors of the national economy.

Among them, the paper and cellulose industry was the first to be considered, and the conference made an explicit recommendation for the sector to redefine itself and engage in exports (GL Apr. 26, 1973).

Before that, the development of the paper and cellulose industry was centered on the exploration of a new market niche for the sector's expansion in the domestic market. In the late 1950s/early 1960s, some paper and cellulose companies had found in the production of short fiber cellulose from fast growing eucalyptus tree a way of getting a secure provision of raw material for their activities.

This technical advancement allowed Brazilian producers to bypass the high entrance barriers of the paper and cellulose market, formed of the need of large and mature forest reserves as the industry's basic input. As a reaction to the possibilities that this fresh technique opened for the industry and for the country, in 1966, the Brazilian government created tax breaks destined to form funds for subsidizing forestation projects of eucalyptus (BNDES, 1991; Paolielo, 1988).

Concomitantly, the Paulista Association of Manufacturers of Paper and Cellulose (APFPC) decided to investigate the possibilities for an extensive use of short-fiber cellulose in the country as a whole. It requested support from BNDES and the development bank wont along this demand and called a private consulting firm named Leone Consultoria for carrying out the proper study. (BNDES, 1991).

As a result of the promising conclusions of Leone's study, BNDES officially included support for the paper and pulp industry in its operations, and it settled a minimum level of output of 100 tons/day of cellulose and 250 tons/day of paper for considering requests for financing projects for this industry with subsidized support (BNDES, 1991).

Whereas in the 1960s, industrialists did not have a major concern with expanding to the world market within their circles, this understanding changed, and the industry began to invest with an eye on foreign markets. In 1971, a leading producer, Companhia Suzano de Papel e Celulose, announced the building of a new factory and informed that part of its production would be sold abroad (ID Feb. 1969; JB Jul. 4, 1971).

At that point, BNDES and the Council for Industrial Development (CDI) had increased the level of daily production of paper and pulp required for a firm to receive benefits from the government to 1000 tons/day. This policy resulted in a minor opposition from the private sector, finally solved with lowering the requirement in half (BNDES, 1991: 18-20).

In the beginning of 1973, another important enterprise in the sector, named Cepalma, also announced its plans to start exporting. It opened a new plant in the northeastern state of Maranhão that would sell its output abroad (GL Jan. 20, 1973).

Not too long after that, the same Paulista Association of Paper and Cellulose Manufacturers (APFPC) reaffirmed the sector's interest in the international market, announcing that the several projects approved by the government during the previous year would add a combined load of 270,000 tons to the country's yearly production, part of which was to be shipped abroad (JB Mar. 2, 1973).

This was the positive context in which the paper and cellulose industry was approached at the above mentioned BNDES conference (GL Apr. 26, 1973). More than that, between 1968 and 1972, cellulose exports had grown from approximately 8,000 to 134,000 tons, in spite if the fact that cellulose production had hardly doubled its output (Tables n. 5, 6, 7 and 8, Appendix).

During this meeting of government officials and businesspeople from the sector, the president of BNDES, Marcos Vianna, said that the bank intended to draw a broad plan, in cooperation with the industry, for increasing the exports, while at the same time fulfilling internal demand (JB Apr. 25, 1973).

Apparently, APFPC had been working in the same direction of BNDES', stressing the importance of support from the government. For instance, after recalling the large growth of cellulose production up to 1973, an important member of APFPC board of directors named Marcello Pilar claimed that there was "a need for broad planning to direct the efforts already available in the private sector"(APFPC, 1973).

According to BNDES' evaluation made at that meeting by José C. Oliveira, there were several difficulties to be dealt with before the paper and cellulose sector could reach its goal of exporting 2.5 million tons in 1980. This BNDES officer stressed the problematic large number of small productive units, the lack of technological research and of good technical standards, besides inefficient management, as the main difficulties to be tackled.

Nonetheless, Oliveira stated that the sector could expand and attract investments, as was already happening. He also said that such initiatives would certainly count with BNDES and with government support in the form of fiscal and credit incentives (GL Apr. 26, 1973; JB Apr. 25, 1973) 7 .

This first period of export-oriented growth was therefore characterized by a positive performance of the paper and cellulose industry in the domestic and international arenas, based on the support for the exploration of a particular market niche, under highly positive business-state relations.

Nonetheless, the paper and cellulose sector soon felt the difficulties resulting from the oil crisis through an adverse demand for pulp. The paper production and exports, however, continued to grow steadily, whereas the domestic and international performance of cellulose became quite irregular (Tables n. 5, 6, 7 and 8, Appendix).

As a matter of fact, the paper and pulp industry was also actually helped by the expansionary adjustment to the oil shock adopted by Brazil in the second half of the 1970s. The government recognized that this industry had a great export and import-substitution potential and carried out a unique development plan for the sector, implementing additional incentives for its domestic and international expansion.

This was not a one-sided policy orientation, as the government also tried to keep the domestic market of paper and pulp adequately supplied and restricted the sector outward oriented growth, too.

Reacting to the above difficulties, entrepreneurs began to search for additional incentives, although they also developed new concerns for long-term, large-scale support. In addition, they looked for alternate ways of organizing themselves, and cellulose exporters founded their own association, the Brazilian Association of Cellulose Exporters (ABECEL).

In 1974, the government further restricted its support to the industry exports, canceling its Industrial Products Tax credit awards for foreign sales (JB Apr. 23, 1974). Surprisingly enough, these restrictions were accepted by the sector up to mid 1975 given the expanded domestic demand of both products (ID Jul. 4, 1975).

The Brazilian government had also decided to partially reduce fiscal incentives for eucalyptus farming by demanding a 50% participation of private capitals in all new reforestation projects and the president of the National Association of Paper and Cellulose Producers (ANFPC), Antônio Lopes, considered this decision detrimental to the industry (GL 4 Feb. 1974). He said that the sector's foreign expansion was "predicated" on the existence of incentives to tree farming investments and it could not bear any restrictions on such subsidies.

He added that such changes should only be enforced for future investment proposals, and ended up criticizing the new minimum production level required by the Council for Industrial Development for the installation of new plants. This new requirement was so high, he said, as to practically jeopardize any new productive investments in the sector (GL 4 Feb. 1974) 8 .

In the second part of 1974, Marcello Pilar, from APFPC, come to the fore to complaint against all these restrictions imposed on the sector. For him, these limitations could result in serious shortcomings for on-going investments, endangering the goals of the sector.

Pilar reaffirmed the commitment of sector industrialists to maintain their investments, but stressed again the need for a plan for the industry: "Without this plan, we will continue to have forest regulations, trade policies, prices and a series of important decisions of major importance for the sector and for the country taken under the waves of the circumstances" (ANFPC, 1974).

By the end of 1974, however, economic policies for the sector appeared much more acceptable. In face of the costs imposed on the country by oil crisis, the Brazilian government decided to stimulate investment that could contribute to earning of foreign revenues and to reducing imports.

The government attitude was displayed in the II National Development Plan (II PND), that contained ambitious goals for the growth of the national economy. The plan also spelled out benefits for specific sectors, including for the paper and cellulose industry, which seemed to fit the general strategy of local adjustment to the oil crisis (Brasil, 1974).

As the year ended, the Economic Development Council approved a specific plan for the sector, called National Program of Paper and Cellulose (PNPC). This plan specified the general goals from the II National Development Plan for the sector in terms of the country's auto-sufficiency, in a midterm perspective, and the production of exportable surpluses of cellulose at a level of 2 million tons in 1980 (JB Dec. 5, 1974; GL Dec. 5, 1974).

In order to reach these targets, the PNPC relied on an attractive support from BNDES, basically made of its participation in 60% of the investment projects, through 12-year loans, with negative interest rates (Brasil, 1974a). Investment in the sector, of course, increased enormously in the second half of the 1970s, only to face a declining demand abroad in the next decade. This problematic situation characterized the difficult 1980s (Tables n. 5, 6, 7, 8, Appendix).

A year later, Cherkasky acknowledged the importance of the sectoral plan for the industry development, stressing that "the existence of the program and its transformation into an official policy, involving adequate governmental support for the attainment of its goals, is a determining factor of stability in a worrying moment, caused by the international scenario"(ANFPC, 1975).

In fact, the cellulose subsector had been experiencing a problematic international situation since 1975, with large stocks and lower and unstable prices, but the government took up to 1977 to recognize these difficulties (Table n. 6, Appendix). In face of these and other problems, ANFPC indeed came to resort more frequently on short-term, localized demands, such as the request to the Institute of Sugar and Ethanol to authorize sugar to be packed in sacks made of kraft paper, as a way to create demand for paper (GL Oct. 3, 1977).

When the 1978 statistical handbook of the sector was released, Cherkasky and Aún presented a negative evaluation of the overall economic policy of the government. On the one hand, they complained about the imposition CIP price controls, stressing that such a practice was a serious obstacle to new investments in the sector. According to them, price controls should be eliminated, and this change was seen as vital for the country not to revert to dependency on paper and cellulose imports (GL Oct. 17, 1978).

On the other hand, they also linked the immediate problems the industry was going through with general demands and asked for better coordination inside governmental bureaucracy. Chaerkasky and Aun proposed the creation of a possible "Ministry of Production" that would deal with the nations industrial and agricultural production, because they considered that these areas are related to each other and should not be under the authority of different agencies, as it was the case then.

Business-state relations had indeed turned partially tense in the late 1970s. Similar negative evaluations of economic policy-making were made a couple of months later by Jamil Aún (ID Jan., 1979). Differently from the paper subsector that was experiencing growth in production and exports in the second half of the 1970s, the export revenues from cellulose declined up to 1977, when they slowly began to recover. In 1979, cellulose foreign sales earned US$ 180.5 million, approximately six times more than the output of 1974/75, but paper exports had grown ten times its level of 1975, US$ 13.3 million (Tables n. 7 and 8, Appendix).

It should be finally mentioned that the goals set in the sector development plan were largely attained, particularly in the paper branch: by 1980, from the projected 3.6 thousand tons, 3.3 had been produced. Cellulose performance was less successful, as from a projected 4.2 thousand tons, only 2.8 had been made; the target of exporting 2.0 thousand tons had been translated into actual sales of only 890 thousand tons (ANFPC, 1980).

In the 1980s, paper and cellulose entrepreneurs autonomously presented a set of new, long-term and broad demands of state support that were finally pulled together in a second sectoral development plan, launched in 1987. For this and other reasons, the 1980s, despite being so difficult for the economy as a whole, were not nearly so for the paper and cellulose industry.

Nevertheless, in day-to-day operations, the situation was in fact more complicated and the industry did face some routine problems, although these difficulties did not change the predominant orientation in the collective actions of the sector businesspeople.

Paper and cellulose exports remained unstable, but actual output for foreign markets expanded: cellulose, for instance, grew from 890.7 to 1066.2 thousand tons whereas revenues expanded from US$ 364.3 to US$ 692.2 millions. Paper foreign sales, on the other hand, increased from 190.6 to 1103.5 thousands of tons and from US$ 155.5 to US$ 684.1 million (Tables n. 6 and 7, Appendix).

The decade opened with a large gap between external and internal prices for cellulose. Brazil's Foreign Trade Office (CACEX) tried to solve the problem with another contingency policy for exports. This governmental initiative had the effect of stirring animosity between paper manufacturers and cellulose producers.

Only in April 1981, there were suggestions of changes in economic policy that would deal with these problems. As a way to improve the industry's situation, the government exempted cellulose from price controls (JB Apr. 8 1981).

Besides facing such immediate matters, the sector was looking at its long-term future. In the opening year of the 1980s, paper and cellulose industrialists drafted and presented to the new government a document entitled "Strategic Directives of the Paper and Cellulose Sector in Brazil during the 1980s", a comprehensive proposal for sector development during the new decade. This proposal was the first product of a working group centered on strategic planning that had beeen meeting since the late 1970s (Pilar, 1997, Interview; APFPC, 1980).

Relying on the "scenario technique", the study assessed local and international social, economic and political conditions, in general terms and with relation to the paper and pulp industry in particular. Accordingly, it suggested a couple of initiatives in the areas of raw material, production and technology, trade policies, financial policies, at this point, without any quantitative target (APFPC, 1980).

Actually, this plan for the 1980s had been based on two other studies carried out by Leone and another consulting firm, entitled "Perspectives of the Brazilian Paper and Pulp Industry in the International Market" and "Structure of Production and Consumption of Cellulose and Paper in Brazil". Expressing the sector long and broad concerns with its development, Cherkasky pictured both analyses as the means for establishing "an objective and realist sectoral policy aimed at an adequate planning for the expansion of the domestic supply and for improving Brazil's comparative advantage to speed up the export program" (ANFPC, 1981: 10).

Sector leaders had the problematic background in mind when they put together this study for a ten-year expansion, that dealt with raw material production, jobs to be created and required levels of investment, among other issues (JB Dec. 10, 1980). In fact, earlier than that, Abílio Santos, the president of ABECEL, had stressed the lack of investment in the cellulose industry (GL Apr. 18, 1980).

This mobilization yielded results. A year later, Nelson C. Teixeira, from the Council for Industrial Development (CDI), announced the reinstallation of the Executive Committee on Paper and Cellulose, under the Ministry of Industry and Commerce. This committee was then charged with preparing the II National Paper and Cellulose Plan, in the context of the priority given to earning foreign earnings (because of the country's foreign debt) and of the export potential of cellulose. It was then expected that Brazil could expand its participation in the international market from 3.5 to 6%, installing ten new factories with a joint production capacity of 240,000 tons/year (JB Nov. 26, Dec. 26, 1981).

The paper and cellulose sector kept its activism alive and in March of 1982 the ANFPC issued an update of the 1980 document. The association again defended the need for a new plan for the sector, given the competitiveness of the Brazilian product and the shortage of the global cellulose supply. According to the estimates, Brazil should then work toward supplying that demand, despite the problems it still faced, as the lack of incentives for planting forests, overvalued currency and technological backwardness (JB Mar. 1, Aug. 22, 1982).

A semester later, BNDES announced that there would be enough financial resources to support the sector expansion, but at that moment no new policies were set up (JB Aug. 20, 1982).

In 1984, in an autonomous search for broad and long-term support from the government, cellulose producers explicitly demanded a second development plan for the sector. At that juncture, Armando Vieira Netto, president of ABECEL, complained there was not "a program or even a policy defined for the paper and cellulose sector" (JB Apr. 9, Aug. 22, 1984).

This entrepreneur then specified the support requested from the state by stressing that the sector did not need subsidies, but rather planning and adequate financing according to the industry conditions. Vieira Netto went on and said that investments in tree farming were too low and that there was not a single new project in execution or even being examined by the governmental authorities (JB Apr. 9, 1984).

Despite this quest for a new development policy for the sector - which would only be launched in 1987 - and the problem of different internal and external prices for cellulose, the sector actually had a very good performance in the early 1980s.

As in other moments, these results were credited to sector planning, as the sector leader, Cherkasky indicated in late 1983: "However, there was no improvisation, because this work has been in development for years, based on a strategy designed when the economic crisis started, a moment when the industries began to look for new markets abroad" (GL and JB Dec. 31 1983; EX Mar. 7, 1984; ANFPC, 1982, 1983, 1984).

Nevertheless, economic success also led to more criticism of the instability of economic policies and of price control, two problems that gained much larger proportions during the second half of the 1980s. Still in 1984, the vice-president of ANFPC, Boris Tabacof, referred to the country's constant changes in its agreements with the IMF, and complained against the simultaneous and numerous shifts in the economic policy-making 9 . Tabacof manifested himself against irrestrictive incentives but he favored the adoption of selective incentives for stimulating sectors and/or enterprises able to repay the subsidies in terms of production and employment (EX Jan. 25, 1984). Cherkasky went along the same lines shortly after and argued the case for export incentives just for compensating occasional unfavorable conditions at home (CP Jun./Jul. 1985).

At that point, the demise of the authoritarian regime brought up new priorities for the country. When the first civilian administration was being inaugurated in 1985, the president of ANFPC, Cherkasky, recognized that there would be a redefinition in the country's policy orientations toward social issues: "It should be considered that the new political model of Brazil will put more emphasis on the reinstatement of economic growth, while giving priority to production and employment and the consequent addressing of the social needs of the population, establishing, in the wake of democracy, a new type of relationship between businesses, workers and the general community" (CP Apr./May, Jun./Jul., Nov./Dec., 1985).

Nonetheless, ANFPC also recalled that the private sector was still experiencing serious difficulties in its capitalization and pointed to the stock market as a possible solution. Simultaneously, the Paulista Association of Paper and Pulp Manufacturers (APFPC) produced another report concerning the evolution of the sector over the next ten years. The association laid out problems and presented new proposals for the development of the paper and cellulose industry (APFPC, 1985).

After having stressed the positive performance of the sector, Cherkasky announced the document and cited once again the problems of the slump in the cellulose domestic prices, the deficient comparative advantages in relation to foreign competitors, the high costs of freights, the high ratings of the dollar, the high costs of inputs and of financing for exports, among other problems.

Cherkasky justified the sector requests of government support by mentioning that "similar decisions were also taken by the governments of countries that compete with Brazil in the international market" (CP Apr./May 1985; JB Jul. 31, Nov. 22, 1985; APFPC, 1985). Finally, in 1987, the demands for a specific sectoral plan were answered with a Second National Program for Paper and Cellulose (II PNPC), announced by the first civilian President José Sarney. This policy was qualified as "one of the realizations of Brazil's grand opportunities in a field that led the government to establish a new investment program, based on a proposal by the Ministry of Industry and Commerce, José H. C. Branco"(CP Jul./Aug. 1987).

Involving an estimated target of US$ 6 billion investment in the following seven years, the II PNPC generated a more than satisfactory initial reaction. It assumed a support of US$ 3.5 billion through subsidized loans by BNDES and by other state development banks, but the public sector failed to show up with these resources (Pilar, 1997, Interview; Rossi, 1997, Interview; Brasil, 1987).

In the following year, during a seminar about the sector called by the BNDES, Cherkasky stressed that "The Brazilian paper and cellulose sector was already executing investment projects with the combined value of US$ 2 billion, part of the US$ 7 billion predicted for the period 1987-1995" (ANFPC, 1988). Marcio Fortes, the president of BNDES, took the occasion to state that the sector had a priority status for the bank and promised assistance to all businesses that wanted to invest in this industry.

Anyhow, industry leaders continued to deal with everyday problems. In mid-1986, ANFPC applauded the drastic reduction in inflation brought about by Brazil's first heterodox stabilization plan, the so called Plano Cruzado.

The industrialists' association also informed that entrepreneurs were carrying out new projects as a result of stabilization (EX May 14, 1986). After expressing support in the early days of the Cruzado Plan, ANFPC began to complain against the backlashes of heterodox stabilization: the price freeze was lasting too long, industry costs continued to rise, interest rates were also climbing, and all these difficulties were generating serious problems for the industry activities (CP Sep./Oct. 1986; Jan./Feb. 1987).

Still, the attention dedicated to these matters was increasingly linked to broader concerns with economic policy. In this case, the ANFPC connected stabilization with the need for a more durable industrial policy: "In the wake of the goals sought by the government, a new concern is rising, as something inherent and basic, with the establishment of an industrial policy - clearly stated, durable and adequately compatible with the new national economic reality", a claim possibly answered later on with the New Industrial Policy later instituted by president Sarney (CP Jul./Aug. 1986).

Besides, the paper and cellulose association even related this need for more effective state intervention for industrial development with the transition from authoritarianisms: "This project is starting to have a stronger outline with the return of private businessmen to many meetings that have been called in several government agencies, especially the Ministry of Industry and Commerce." Business also claimed for a policy-making process more responsiveness to their interests: "This participation of businesspeople is indispensable for us to follow the path of the development program and it is a response to a summons by President José Sarney, who wants private enterprise to become the leader of the process of growth" (CP Jul./Aug. 1986).

During the second half of the 1980s, Cherkasky basically dealt with "growth problems". He stressed the difficulties to capitalize themselves and defended the conversion of the country's foreign debt into available capital for the sector, and also a strengthening of the stock market. Neither proposal was ever developed. In addition, several times he also confronted price controls of CIP, by and large, sustaining that this government intervention prevented enterprises to be profitable and to keep investing: "Without profits, there was no way to sustain investments and the country is in risk of losing its auto-sufficiency in paper and cellulose and becoming a net importer during the next decade" (GL Dec. 8, 1987).

The second heterodox stabilization attempt, in June 1987, was well received by the sector because, differently from the first effort, it enhanced the importance of the foreign sector of the economy; "We are again giving priority to the external sector, not only because of export increases but also in consequence of several actions linked to debt negotiation. The debt default, which made it so much more difficult to obtain the participation of foreign resources, not only shunned foreign investments but also drained our foreign reserves, which now have to be rebuilt" (GL Dec. 8, 1988).

As the decade ended, the sector seemed to be well in tune with the governmental orientation toward trade liberalization. In mid-1989, ANFPC brought out the need of redefining the country's trade in the direction of a more liberal commercial policy, based exactly on "comparative advantages": "The road of exports has two lanes. The return lane, meaning imports, must also be redefined, so that Brazil will not end up isolated. After all, no trading partner will happily accumulate negative balances in commercial accounting" (CP Jul./Aug. 1989).

To this extent, in addition of assuming an updated view of the country's internationalization, ANFPC apparently consolidated its concern with long and general implications of its own sectoral development, constantly translating them into evaluations and plans. Its short-term, targeted request can only be understood as residual practices.

As it had happened with the textile industrialists, none of these palns were ever put into practice. In fact, in early 1997, ANFPC was about to release another ten-year development plan for the sector and the blueprint of this proposal was presented to me in an interview however, with an open skepticism about is political impact on the governmental circles, given the strict concern with stabilization they had assumed (Pilar, 1997, Interview).


VI. Conclusions

By looking at the political reactions of business to their international expansion, I was specifically interested in investigating the industrialists' collective actions after import-substitution and before neoliberalsim.

As this development process was characterized by short-term, narrowly-focused demands from these business sectors, usually presented in a dispersed way through state-centered corporatist organizations, I investigated to what extent this pattern of interest politics could be modified by the interaction with more dynamic, and more competitive markets from the international arena, based on the export drive of Brazil's - so far - inward-oriented industrialization.

On the one hand, it was shown that entrepreneurs relied on existing institutions to improve their situation in face of the challenges from abroad, very much along the traditional subordiante corporatist practices of presenting short-term, narrowly focused demands. On the other hand, it was also indicated that exporting industrialists also autonomously tried to improve their performance abroad, through policy provisions for the sector as a whole in the long-term.

To this extent, this research suggests that the involvement of industrialists with the world economy prior to the neoliberal opening was indeed influential enough important for stimulating them to engage in new collective actions toward these goals at one point or another. It is worth mentioning that some initiatives might even had provoked spillover effects, as the request of the textile industry through the Plan 2000 for a support similar to the one previously provided to the auto industry.

More specifically, the international challenges must have been influential enough for stimulating business to overcome the "access policentrism" and the "decision-making policentrism" that characterized Brazil's trade policies until the late 1980s, and to engage in those new collective initiatives.

Regardless of being a valuable political resource for subordinate corporatist practices - and taken as such in part - this dispersed locii for policy making did not appear as an obstacle for these innovative collective actions of the industrial exporters, possibly approaching "sectoral corporatist" practices.

This study also considered the role of a more structured state intervention in the shaping of the political reactions of local businesspeople, as they got involved with international trade. Again, this influence also appeared to be relevant, although not in a straightforward way.

In order to develop this concern, this research compared a group that was carefully stimulated by the state for overseas expansion - as the paper and pulp entrepreneurs - to another one that was just exposed to export subsidies, as the textile industry.

The close interaction between the state and the pulp and paper sector, developed even before its outward expansion, is certainly at the roots of the sector latter concerted collective actions. However given the similar outcomes found in the textile industry, an organized state intervention may not be a decisive condition for organized business, as suggested by Peter Evans' concept of autonomy embeddedness (1992).

Differently from his view, my study of the textile and auto industries, with their organizational outcomes, suggests that the market can also stimulate business to organize around long term, large scale goals.

In addition, again in contrast to Evans' thought, it should also be stressed that an embedded relation between the private and the public sector is not necessarily conducive to any related politico-economic outcome, as the failure in implementing these proposals indicate. They were turned into actual governmental policies, but never implemented.

We have, therefore, to ask why no policy was ever implemented if the state agencies and the private sector were willing to engage into a long term, large scale collaboration toward promoting specific sectors of the economy? And looking at the Brazilian situation at that point, one can only point out to the lack of political will from the part of the Presidency and the unstable macroeconomic conditions the country faced.

Those are outside dimensions yet not included in Evans' reasoning, but it seems that they may play a role in triggering a successful embedded interaction. In other words, if, as Amsden says, "what accounts for the differences in rates of growth of industrial output and productivity among late industrializing countries is not the degree to which the state has disciplined labor but the degree to which it has been willing and able to discipline capital", one can conclude that the Brazilian state clearly failed to do so, and possibly not because of the lack of interested business partners, I can now add (Amsden, 1992: 61).

Anyhow, the way business organizes and does politics will have an important impact on the tasks laying ahead for these countries' development, and the findings of this study must be assessed in relation to the above views and to Brazil's future.

Considering the outcomes of the late 1980s in relation to Brazil's main development challenges nowadays - as its full integration into a highly-competitive world economy - it must be added that these initiatives of business along sectoral corporatism contrast sharply with the current understanding they have been subjected to.

By and large, scholars are assuming that corporatism is doomed to vanish, either for political or economic reasons. With respect to politics, it is often argued that the centralized state, with a powerful policy-making machine (particularly for economic matters) is being replaced by the minimum state, with de-centralized authority, ensuing ample room for market self-regulation.

A de-regulated, open economy also has a similar impact, making it difficult for coporatist organizations to have any condition for organizing long-term, large-scale sectoral projects, given that their economic survival would depend on individual, localized adaptation to new, highly demanding global competition (Tapia, 1994; Almeida, 1994).

However, in spite of the lack of economic and political room for planning and for a more active integration into the world economy, I think that this possibility should not be completely eliminated, given the possible emergence of a "post-neoliberal" scenario in Latin America, in which there might be a broader concern with planning, of course, not exactly as it existed in the past.


References and sources

a) Books, dissertations and articles

- Abranches, Sergio H. H. de, 1978. The Devided Leviathan: State and Economic Policy Formation in Authoritarian Brazil. Ph. D. Dissertation, Cornell University, Dept. of Political Science

- Abreu, Marcello de P., org., 1992. A Ordem e o Progresso - Cem Anos de Política Econômica Republicana, 1889-1989. Rio de Janeiro, Editora Campus

- Almeida, Maria H. T. de, 1994. "O corporativismo em declínio?" in Evelina Dagnino, org. Os anos 90: política e sociedade no Brasil. São Paulo, Brasiliense

- Amsden, Alice, 1992. "A Theory of Government Intervention in Late Industrialization", in Louis Putterman and Dietrich Rueschemeyer, eds., State and Market in Development: Synergy or Rivalry. Boulder, Lynne Rienner

- Arnold, Steven H., 1972. "The Politics of Export-Promotion: Economic Problem-Solving in Brazil, 1956-69". Ph. D. Dissertation, The John Hopkins University, Department of Political Science

- Baer, Werner, 1985. A Industrialização e o Desenvolvimento Econômico do Brasil, Rio de Janeiro, Fundação Getúlio Vargas

- Baer, Werner and Annibal Villela, 1985a. "Crescimento Industrial e Industrialização: Revisões nos Estágios de Desenvolvimento Econômico do Brasil", in Werner Baer, A Industrialização e o Desenvolvimento Econômico do Brasil, Rio de Janeiro, Fundação Getúlio Vargas

- Boschi, Renato R., org., 1991.Corporativismo e Desigualdade: A Construção do Espaço Público no Brasil. Rio de Janeiro, Rio Fundo/IUPERJ

- Boschi, Renato R., 1979. Elites Industriais e Democracia - Hegemonia Burguesa e Mudança Política no Brasil. Rio de Janeiro, Graal

- Braga, Helson C., coord., 1988. Estrutura Industrial e Política Governamental: Quatro Estudos de Caso. Rio de Janeiro, IPEA/INPES

- Carneiro, Dionisio D., 1992. "Crise e Esperanca: 1974-1980" in Marcello de P.Abreu, org., 1992. A Ordem e o Progresso - Cem Anos de Política Econômica Republicana, 1889-1989. Rio de Janeiro, Editora Campus

- Carneiro, Dionisio D. e Eduardo Modiano, 1992. "Ajustamento Externo e Desequilibrio Interno, 1980-1984", in Marcello de P.Abreu, org., 1992. A Ordem e o Progresso - Cem Anos de Política Econômica Republicana, 1889-1989. Rio de Janeiro, Campus

- Cason, Jeffrey, 1993. Development Strategy in Brazil: The Polítical Economy of Industrial Export Promotion, 1964-1990. Ph. D. Dissertation, University of Wisconsin-Madison, Department of Polítical Science

- Cheibub, Zairo B., 1988. "A 'Nova Política Industrial': Possibilidades e Limites". Perspectivas Internacionais, n. 18, pp 8-11

- Clements, Benedict J. and McClaim, J. Scott, 1990. "The Polítical Economy of Export Promotion in Brazil", in Lawrence S. Graham and Robert H. Wilson, eds. The Polítical Economy of Brazil: Public Policies in an Era of Transition. Austin, The University of Texas Press

- Costa, Wanda, 1994. "Corporativismo societal: interesse de classe versus interesse setorial" in E. Dagnino, org., Anos 90: Política e Sociedade no Brasil. São Paulo, Brasiliense

- Diniz, Eli, 1994. "Reformas Econômicas e democracia no Brasil dos Anos 90: As Câmaras Setoriais como Fórum de Negociação". Dados, v. 37, n. 2, pp. 277-315

- Diniz, Eli, org., 1993. Empresarios e Modernização Econômica: Brasil Anos 90. Florianópolis, Editora da UFSC/IDACON

- Diniz, Eli e Boschi, Renato R., 1991. "O Corporativismo na Construção do Espaço Público", in Renato R. Boschi, org., Corporativismo e Desigualdade: A Construção do Espaço Público no Brasil. Rio de Janeiro, Rio Fundo/IUPERJ

- Diniz, Eli e Boschi, Renato R., 1993. "Brasil: Um Novo Empresariado? Balanço de Tendências Recentes", in Eli Diniz, org., 1993. Empresarios e Modernização Econômica: Brasil Anos 90. Florianópolis, Editora da UFSC/IDACON

- Diniz, Eli e Boschi, Renato R., 1979. "Autonomia e Dependência na Representação dos Interesses Industriais". Dados, 22(1):25-48

- Diniz, Eli e Renato R. Boschi, 1978. Empresário Nacional e Estado no Brasil. Rio de Janeiro, Forense

- Diniz, Eli e Lima Jr., Olavo B. de, 1986. Modernização Autoritária: O Empresariado e a Intervenção na Economia. Rio de Janeiro, IUPERJ, Série Estudos, n. 47

- Ericson, Keneth P., 1977. The Brazilian Corporative State and Working Class Politics. Berkeley, University of California Press

- Evans, Peter, 1979. Dependent Development - The Alliance of Multinational, State, and Local Capital in Brazil. Princeton, Princeton University Press

- Evans, Peter, 1992. "The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change", in Stephan Haggard and Robert R. KAufamn, eds., The Politics of Economic Adjustmnet. Princeton, Princeton University Press

- Frieden, Jeffry A., 1991. Debt, Development and Denocracy - Moddern Political Economy and Latin America, 1965-1985. Princeton, Princeton University Press

- Garreton, Manuel, 1994a. "The Political Dimension of Processes of Transformation in Chile" in William Smith, Carlos H. Acuña, and Eduardo A. Gamarra, editors. Democracy, Markets, and Structural Reform in Latin America: Argentina, Bolivia, Brazil, Chile, and Mexico. New Brunswick, Transaction Publishers

- Geddes, Barbara, 1995. "The Politics of Economic Liberalization". Latin American Research Review, v. 30, n. 2, pp. 195-214

- Haggard, Stephan, 1986. "The Newly Industrializing Countries in the International System". World Politics 38 (2): 343-370

- Heredia, Blanca, 1994a. "Making Economic Reform Polítically Viable: The Mexican Experience", in William Smith, Carlos H. Acuña, and Eduardo A. Gamarra, editors, Democracy, Markets, and Structural Reform in Latin America: Argentina, Bolivia, Brazil, Chile, and Mexico. New Brunswick, Transaction Publishers

- Hirschman, Albert O., 1968. "The Polítical Economy of Import-Substitution Industrialization in Latin America". The Quarterly Journal of Economics 82(1)

- Hirschman, Albert O. 1987. "The Polítical Economy of Latin American Development: Seven Exercises in Retrospection" Latin American Research Review 22(3): 7-35

- Kaufaman, Robert, 1979. "Industrial Change and Authoritarian Rule in Latin America: A Concrete Review of the Bureaucratic Authoritarian Model" in David Collier, ed., The New Authoritarianism in Latin America. Princeton, Princeton University Press

- Lago, Luiz A. de C., 1992. "A Retomada do Crescimento e as Distorções do 'Milagre': 1967-1973" in Marcello de P.Abreu, org., 1992. A Ordem e o Progresso - Cem Anos de Política Econômica Republicana, 1889-1989. Rio de Janeiro, Editora Campus

- Leopoldi, Maria A. P., 1984. Industrial Association and Politics in Contemporary Brazil. Ph. D. Thesis, Oxford University

- Lima Jr., Olavo B. de e Maria R. S. de Lima, 1987. "Autonomia Organizacional e Policentrismo Decisório: A Política de Comércio Exterior" in Olavo B. de Lima Jr. e Sérgio H. Abranches, eds. As Origens da Crise - Estado e Planejamento Autoritário no Brasil, Sao Paulo, Vértice

- Martins, Luciano, 1976. Pouvoir et Développement Economique - Formation et Evolution des Structures Politiques au Bresil. Paris, Editions Anthropos

- Modiano, Eduardo, 1992. "A Opera dos Tres Cruzados: 1985-1989" in Marcello de P.Abreu, org., 1992. A Ordem e o Progresso - Cem Anos de Política Econômica Republicana, 1889-1989. Rio de Janeiro, Editora Campus

- O'Donnell, Guillermo, 1979. "Tensions in the Bureaucratic-Authoritarian State and the Question of Democracy", in David Collier, ed., The New Authoritarianism in Latin America. Princeton, Princeton University Press

- O'Donnell, Guillermo, 1978. "Reflections on the Patterns of Change in the Bureaucratic-Authoritarian State". Latin American Research Review. 13 (1):3-37.

- O'Donnell, Guilermo, 1977. "Corporatism and the Question of the State", in James M. Malloy, ed., Authoritarianism and Corporatism in Latin America, Pittsburgh, University of Pittsburgh Press

- Paoliello, Jose L., 1988. "The Brazilian Paper and Pulp Industry: Background, Present Structure and Future Outlook", in Gerard F. Schrender, ed., Global Issues and Outlook in Paper and Pulp. Seattle, University of Washington Press

- Patton, Martha J. 1989. State and Private Capital in the Polítical Economy of the Turkish Development. Ph. D. Dissertation, The University of Chicago, Department of Polítical Science

- Peñalver, Manuel et al., 1983. Política Industrial e Exportação de Manufaturados do Brasil. Rio de Janeiro, Fundação Getúlio Vargas

- Resende, Andre L., 1992. "Estabilização e Reforma: 1964-1967", in Marcelo de P. Abreu, org., A Ordem e o Progresso - Cem Anos de Política Econômica Republicana, 1889-1989. Rio de Janeiro, Editora Campus

- Santos, Wanderley G. dos, 1993. Razões da Desordem. Rio de Janeiro, Rocco

- Schmitter, Philippe C., 1971. Interest Conflict and Polítical Change in Brazil. Stanford, Stanford University Press

- Schrender, Gerard F., ed., 1988. Global Issues and Outlook in Paper and Pulp. Seattle, University of Washington Press

- Serra, José, 1979. "Three Mistaken Theses Regarding the Connection between Industrialization and Authoritarian Regimes", in David Collier, ed., The New Authoritarianism in Latin America. Princeton, Princeton University Press

- Skidmore, Thomas, 1988. The Politics of Military Rule in Brazil, 1964 – 1985. New York, Oxford University Press.

- Skidmore, Thomas, 1977. "The Politics of Economic Stabilization in Postwar Latin America", in James Malloy, ed., Authoritarianism and Corporatism in Latin America. Pittsburgh, PA, University of Pittsburgh Press

- Skidmore, Thomas, 1967. Politics in Brazil, 1930 - 1964: An Experiment in Democracy. New York, Oxford University Press.

- Stallings, Barbara and Kaufman, Robert, eds., 1989. Debt and Democracy in Latin America. Boulder, Westview Press

- Stein, Stanley J., 1979. Origens e Evoluçao da Indústria Têxtil no Brasil - 1850/1950. Rio de Janeiro, Campus

- Stepan, Alfred, ed., 1973 Authoritarian Brazil - Origins, Policies and Future. New Haven, Yale University Press

- Stepan, Alfred, ed., 1989. Democratizing Brazil - Problems of Transition and Consolidation. New York, Oxford University Press

- Tapia, Jorge R. B., 1994. " Corporativismo Societal no Brasil: Uma Transição Incompleta?", in Evelina Dagnino, org., Os Anos 90: Politica e Sociedade no Brasil. São Paulo, Brasiliense

- Tavares, Maria da C., 1972. Da Substituição de Importações ao Capitalismo Financeiro - Estudos sobre a Economia Brasileira. Rio de Janeiro, Zahar

- Teitel, Simón and Thoumi, Francisco E., 1986. "From Import-Substitution to Exports: The Manufacturing Exports experience of Argentina and Brazil", Economic Development and Cultural Change. 34(3):455-490

- Wilmore, Larry, 1985. Market Struture, Firm Size, and Brazilian Exports. Brasilia, CEPAL/United Nations

b) Sources

b.1) Periodical sources

- ANFPC: ANFPC Yearbooks

- BL: Bulletin of the Bureau for Fomenting Textile Exports of SINDITEXTIL

- CP: Celulose e Papel, ANFPC Magazine

- CT: Carta Textil, SINDITEXTIL Newsletter

- DC: Diario do Comercio

- ES: O Estado de Sao Paulo

- EX: Exame

- FL: Folha de Sao Paulo

- GL: O Globo

- GM: Gazeta Mercantil

- IE: Isto e

- IE/SR: Isto e/Senhor

- JB: Jornal do Brasil

- VJ: Veja

- VS: Visao

b.2) Documents

- APFPC, 1980. Diretrizes Estrategicas do Setor de Papel e Celulose do Barsil nos Anos 80. SP, APFPC

- APFPC, 1985. Diretrizes Estrategicas do Setor de Papel e Celulose do Brasil, 1985/1995. SP, APFPC

- Brasil, 1985. III Plano Nacional de Desenvolvimento, 1980/85. Rio de Janeiro, IBGE

- Brasil, 1974. II Plano Nacional de Desenvolvimento. Rio de Janeiro, IBGE

- Brasil, Conselho de Desenvolvimento Economico, 1974a. Programa Nacional de Papel e Celulose. Rio de Janeiro, IBGE

- Brasil, Presidencia da Republica, 1962. Plano Trienal (Sintese) 1963/65. Brasilia

- CNIT, 1986. Plano de Modernização da Industria Textil. Rio de Janeiro, CNIT

- MIC, 1989. Plano Setorial Integrado da Industria Textil e da Confecção. Brasilia

- MIC, 1987. II Plano Nacional de Papel e Celulose. Brasilia

b.3) Interviews

- Atolini, 1997. Interview with Luiz Atolini, SINIDITEXTIL assistant to the presidency

- Figueiredo, 1997. Interview with Ney Figueiredo, FIESP assistant to the presidency

- Galvão, 1996. Interview with Paulo Galvao, BNDES former project analyst

- Maia, 1994. Interview with Joao Maia, former general-secretary of the Ministry of Finances

- Moldan, 1997. Interview with Ludwig Moldan, ABECEL executive-secretary

- Nóbrega, 1997. Interview with Maílson da Nobrega, former Minister of Finances

- Pillar, 1997. Interview with Marcello L. Pilar, ANFPC director

- Rossi, 1996. Interview with José Carlos Bim Rossi, ANFPC director

- Simas, 1997. Interview with José Maria Simas, CNIT top technical analyst



Table n. 1. Brazil, Exports, Manufactured Exports (in US$ million) and
Share of Manufactured Exports/Exports (%) for Selected Years, 1965-1990
Year Exports Manufactured
1965 1,596 121 7.6
1970 2,379 360 13.1
1975 8,670 2,222 29.8
1980 20,132 7,489 44.8
1985 25,639 11,255 43.9
1990 31,390 17,013 54.2
Source: CACEX


Table n. 2 - Brazil, Subsidy Rate for
Manufactured Exports (%), 1965/1985
Year Subsidy Rate
1965 5.0
1966 5.0
1967 21.3
1968 26.2
1969 42.67
1970 52.69
1971 53.14
1972 58.82
1973 52.27
1974 55.16
1975 56.00
1976 62.17
1977 67.87
1978 63.12
1979 62.08
1980 36.98
1981 61.57
1982 68.96
1983 53.57
1984 48.70
1985 43.38
Source: Cason, 1993 and
Clements and McClain, 1990


Table n. 3 - Brazil, GDP and Inflation Rates (%), 1964/1979
Year GDP Growth Rate Consumer Price Index
1968 9.8 22.0
1969 9.5 22.6
1970 10.4 22.3
1971 11.3 20.2
1972 12.1 16.6
1973 14.0 12.7
1974 9.0 27.6
1975 5.2 29.0
1976 9.8 41.9
1977 4.6 43.6
1978 4.8 38.8
1979 7.2 52.7
1980 9.1 82.8
1981 -3.1 105.6
1982 1.1 98.0
1983 -2.8 142.0
1984 5.7 196.7
1985 8.4 227.0
1986 8.0 143.7
1987 2.9 231.0
1988 -0.1 682.3
1999 3.3 1287.0
Source: Abreu, 1992


Table n. 4 - Brazil, Textile Exports (in US$ million) and Growth Rate (%), 1968/1988
1968 22,7 -
1969 28,5 25.5
1970 41,8 46.7
1971 62,7 50.0
1972 145,4 131.9
1973 324,8 123.4
1974 444,8 37.9
1975 378,6 -14.9
1976 397,0 4.7
1977 500,5 26.1
1978 568,2 13.6
1979 756,6 33.1
1980 828,3 9.8
1981 864,5 4.8
1982 658,1 -23.9
1983 817,6 24.2
1984 1130,9 38.3
1985 882,1 -22.0
1986 837,7837,7 -5.0
1987 1005,4 20.0
1988 1219,6 21.3
Source: CACEX


Table n. 5 - Brazil, Cellulose Production and Exports (in tons), and Growth Rates (%), 1968/1988
Year Produc-tion Growth Rate Exports GrowthRate
1968 517,126 - 7,976 -
1969 567,311 9.7 18,562 132.7
1970 664,063 17.0 27,906 47.6
1971 721,500 8.6 22,449 -19.5
1972 898,340 24.5 134,248 498.0
1973 971,687 8.1 189,170 40.9
1974 1,129,526 16.2 135,305 -28.4
1975 1,189,608 5.3 152,199 12.4
1976 1,253,784 5.3 138,816 -9.1
1977 1,502,270 19.8 92,970 -33.0
1978 1,819,994 21.4 266,085 186.2
1979 2,447,751 34.5 578,700 117.4
1980 2,872,696 17.3 887,850 53.4
1981 2,795,790 -2.6 947,997 6.7
1982 2,894,770 3.5 872,946 -7.6
1983 3,057,773 5.6 981,563 12.4
1984 3,364,385 10.0 969,850 -11.2
1985 3,403,464 1.1 925,288 -4.5
1986 3,555,407 4.4 873,250 -5.6
1987 3,664,461 3.0 806,985 -7.5
1988 3,792,868 3.5 1,054,804 30.7
Source: ANFPC


Table n. 6 - Brazil, Paper Production and
Exports (in tons), and Growth Rates (%), 1968/1988
Year Production Growth
Exports Growth
1968 886,298 - 184 -
1969 952,673 7.4 578 214.3
1970 1,089,910 14.4 2,165 274.5
1971 1,237,012 13.0 3,505 61.8
1972 1,344,960 8.7 10,570 201.5
1973 1,587,403 18.0 42,563 302.6
1974 1,853,616 16.7 30,781 -27.6
1975 1,688,323 -8.9 13,366 -56.5
1976 2,045,969 21.1 32,166 140.6
1977 2,234,625 9.2 42,249 31.3
1978 2,534,407 13.4 103,602 145.2
1979 2,979,247 17.5 141,354 36.4
1980 3,361,697 12.8 190,648 34.8
1981 3,012,614 -10.3 329,350 72.7
1982 3,328,566 10.4 255,092 -22.5
1983 3,416,758 2.6 440,605 72.7
1984 3,742,302 9.5 702,640 59.4
1985 4,021,400 7.4 543,392 -22.6
1986 4,525,570 12.5 692,138 27.3
1987 4,711,664 4.1 609,341 21.9
1988 4,683,952 -0.5 1,103,599 81.1
Source: ANFPC


Table n. 7 - Brazil, Cellulose Export Quantity (in tons) and
Value (in US$ 1,000) and Growth Rates (%), 1968/1988
Year Export
Growth Rate Export
Growth Rate
1968 7,976 - 1,100 -
1969 18,562 132.7 2,923 165.7
1970 27,906 47.6 4,891 67.3
1971 22,449 -19.5 3,769 -23.0
1972 134,248 498.0 12,821 240.1
1973 189,170 40.9 23,137 80.4
1974 135,305 -28.4 36,680 58.5
1975 152,199 12.4 30,266 -17.5
1976 138,816 -9.1 26,285 -13.2
1977 92,970 -33.0 19,159 -27.2
1978 266,085 186.2 57,143 198.2
1979 578,700 117.4 180,531 245.9
1980 887,850 53.4 363,709 101.4
1981 947,997 6.7 364,875 0.3
1982 872,946 -7.6 293,257 -19.7
1983 981,563 12.4 310,183 5.7
1984 969,850 -11.2 396,415 27.8
1985 925,288 -4.5 278,942 -29.7
1986 873,250 -5.6 324,549 16.4
1987 806,985 -7.5 397,130 22.3
1988 1,054,804 30.7 625,913 57.6
Source: ANFPC


Table n. 8 - Brazil, Paper Export Quantity (in tons) and
Value (in US$ 1,000) and Growth Rates (%), 1968/1988
Year Export
Growth Rate Export
Growth Rate
1968 184 - 14 -
1969 578 214.3 49 250.0
1970 2,165 274.5 174 155.1
1971 3,505 61.8 283 62.6
1972 10,570 201.5 3,050 977.7
1973 42,563 302.6 13,750 350.8
1974 30,781 -27.6 17,935 30.4
1975 13,366 -56.5 9,382 -47.3
1976 32,166 140.6 16,463 75.4
1977 42,249 31.3 22,270 35.2
1978 103,602 145.2 53,345 39.5
1979 141,354 36.4 92,477 73.3
1980 190,648 34.8 155,541 68.1
1981 329,350 72.7 219,629 41.2
1982 255,092 -22.5 164,251 -25.3
1983 440,605 72.7 208,434 26.8
1984 702,640 59.4 345,560 65.7
1985 543,392 -22.6 262,786 -24.0
1986 692,138 27.3 346,811 31.9
1987 609,341 21.9 364,779 5.1
1988 1,103,599 81.1 604,105 65.6
Source: ANFPC


*: Dept. of Political Science and Graduate Program of Anthropology and Political Science, Universidade Federal Fluminense (Niterói, RJ, Brazil) E-mail:

Note 1: This paper is part of the project, "Brazil in Transition: An Assessment at the End of the XXth Century," financed by the Support Program For Nuclei of Excellence (PRONEX). The project is based at the Center for Research and Documentation of Contemporary Brazilian History (CPDOC) of the Getúlio Vargas Foundation and the Graduate Program of Anthropology and Political Science of the Federal Fluminense University (UFF, Niterói, RJ, Brazil) is a participating institution. Back.

Note 2: Except for the political analyses of Cason (1993) and Arnold (1972), this subect has been basically studied through the economic point of in Penalver et alli. (1983), Wilmore (1985), among others. Back.

Note 3: The hierarchical structure of the official corporatist system, for example, established that businesspeople were allowed to organize along their industry lines practically only at local level, in associations called "syndicates". At state and regional levels, capitalists could only form organizations of higher level, named "federations" based on syndicates of different industrial sectors. Along with the same lines, entrepreneurs could get nationally organized only into a single confederation for each of the three economic sectors (agriculture, commerce and industry), based on their multi-branches federations. Besides, capitalists were also explicitly forbidden to organize into a single peak association (Erickson, 1977). Furthermore, as all syndicates, federations and confederations of the official system were to be supported by a universal "syndicate tax," imposed on all firms (regardless of their active membership in these organizations), these institutions had no "selective incentive" to mobilize their members. This tax was part of the official corporatist apparatus and it actually made all entrepreneurs "free-riders" of their own organizations (Santos, 1993). Back.

Note 4: This general picture of the politics of Brazil's industrial bourgeoisie does not imply that this class was totally controlled by the state. The statist corporatist institutions were also used as a channel by the bourgeoisie for organizing and voicing its interests, especially in the more industrialized regions of the country. Entrepreneurs also fought for and were allowed to keep some of the civil associations they had built before the enactment of the corporatist laws in the 1930s (Costa, 1991; Boschi, 1979). Back.

Note 5: Despite the different nature of these private business organizations, they also enhanced the fragmentation of capitalists' interests, and the subordination of business to the state. As had happened with the official corporatist system, the successful intervention of the state expanding the country's industrialization after World War II turned private associations into important institutions of business politics. The new format of business politics did not displace the old structures, and the statist corporatist organizations have kept their importance. Moreover, in many cases - including the ones studied here - the new private associations were built in close connection with old related statist/official corporatist organizations, as a way of maximizing the articulation of business interests, in what came to be recognized as the "dual pattern" of business politics in Brazil. Accordingly, the private business associations became known as the "parallel" structure, and the ones constituted by the state, as the "official" system. Back.

Note 6: Business access to the state was also enhanced by the exclusion of labor from the same channels, allowing scholars to appropriately characterize this corporatism as "bifrontal" (O'Donnell, 1977) or "bipartite" (Diniz and Lima Jr., 1986). Back.

Note 7: As a matter of fact, the Brazilian state helped even more than that in the expansion of the paper and cellulose sector, by directly participating in a joint-venture with foreign capital. In June 1973, the Companhia Vale do Rio Doce, a large mining corporation owned by the federal government, signed an agreement with a consortium of eleven Japanese companies - forming the "Japan-Brazil Paper and Pulp Resources Development Company, Limited" - for the construction of a plant facility for producing short fiber cellulose. Back.

Note 8: This tax break indeed declined over time, from 50% in 1966, to 25% in 1978, for example, but it also provided an important support for the paper and pulp industry: up to 1976, more than 90% of the forests planted in Brazil was based on this particular incentive. Stil in the mid 1980s, approximately 50% of the existing forests had relied on the same tax break (BNDES, 1991). Back.

Note 9: The leader of ANFPC stressed that Brazil should not remain constrained by the debt and claimed for the adoption of new development policies. Tabacof expressed a sense of urgency in his proposals, as he saw a need for "re-igniting society's hope". He criticized the profits obtained from riskless financial investments and suggested a heavy taxation of these operations (EX Jan. 25, 1984). Back.