worries about Dutch disease and commodity dependence
there is now a revival of interest in industrial policy—partly because of worries about Dutch disease and commodity dependence.
economist.com
Thus forcing PBR to invest in lower profitable refineries intead of concentrating on digging presal out.
Or forcing Vale to go into fertilizers and invest into steel mills.
"Brazil never wholly abandoned industrial policy. Interest on loans made by its giant national development bank, the BNDES, is set at less than half market rates, involving a selective subsidy. Since Luiz Inácio Lula da Silva was elected president in 2003, industrial policy has become more pronounced and explicit. The BNDES supports innovation by providing seed money for ventures in biotechnology, pharmaceuticals and information technology. More controversially, it backs mergers and foreign takeovers by big Brazilian companies. These have included the creation of Brasil Foods, a big food company, and the merger of two big meat firms, JBS and Friboi. The petrochemical industry has consolidated in Braskem, a joint venture between Odebrecht, a construction giant, and Petrobras, the national oil company. The electricity industry is reorganising around Eletrobras, the former state monopoly.
Critics denounce all this as the creation of “national champions” that are beholden to the government, either directly or indirectly. Luciano Coutinho, the BNDES’s president, retorts that Brazil’s new multinationals are highly competitive Darwinian survivors of decades of economic volatility. “We have an open economy, it’s different from the model of the 1960s and 1970s. The market is imperfect, but the state also makes mistakes,” he concedes."
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