Chapter 3 Industrial Policy and the Post-New Brazil

The Post-New Brazil privatized, and then foreign capital companies increased their investment, acquiring local capital and privatizing companies.This process is considered a turning point in the modernization of Brazil's companies Ninomiya 2013.As for industrial policy, after it had played a central role, it gradually lost so much legitimacy over the course of the 1980s that it was virtually absent from the new economic model that was ushered in by the structural reforms, at least in its strictest version Peres 2006, 69 In the 2000s, perspectives on industrial policy changed.In 2003, Luiz Inacio Lula da Silva of the Worker's Party (PT) was elected president.The new government's position on industrial policy was one of the key differences from the prior government (1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002) of President Fernando Henrique Cardoso of the Brazilian Social Democratic Party (PSDB), which had implemented neo-liberal policies.Arbix and Martin 2010, 2 claim that the industrial policies implemented by the Lula government (PT) were evidence of the rebirth of "State Activism".Kupfer, Ferraz and Marques 2013, 327 state that "In the 2000s, industrial policy made a comeback in Brazil, and with growing importance".This tendency, the "comeback of industrial policy," is not unique to Brazil.According to Peres and Primi 2009, 43, "Industrial policies have been making a (slow) return in Latin America and have been able to operate, albeit on a small scale, in open economies and with orthodox macroeconomic policies, contrary to the previous conventional wisdom that they were incompatible".Industrial policy has attracted attention in the past decade.In Brazil's case, The PT government's proactive stance on industrial policy is seen to be a reinstatement of the government role in the economy, and it also seems to have been a reaction to the decade of the Washington Consensus in the 1990s, whose aim was to minimize government's role.The literature that supports the vision of a "comeback of industrial policy," mostly describes a theory of industrial policy in economics with public policy both its justification and the method of its implementation.These are important discussions for understanding industrial policy in Brazil, if one wants to extract the relevant lessons for good practice.However, the original purpose of industrial policy is industrial development with structural change.It is important to analyze the impact of this both for industry as a whole and for business.In Brazil's case, there was a significant increase in industrial production during this decade, whether this was due to the government's industrial policy or not.For example, the number of cars produced increased from 2004 (2,317 thousand units) to 2014 (3,173 thousand units), as did television production from 2004 (8,729 thousands units) to 2014 (14,537 thousands units).Due to the discovery of huge petroleum and gas