Cast study Case Example | Topics and Well Written Essays - 500 words

Cast - Case Study Example Exports of agricultural produce constitute Brazil’s major revenue earner. Brazil’s manufacturing industry lacks competitiveness because there is no comparative advantage in the industrial sector. The cost of energy, raw materials and wages is high and the consequence is the escalation of the manufacturing costs. Brazil has failed in the quest to keep the industrial operating costs below those incurred in other countries. Therefore, the countries with lower operating costs are more competitive in manufacturing compared to Brazil. Brazil’s governments in the 20th and 21st centuries have been eagerly developing a world class manufacturing strategy. The government’s course of action is aimed at switching from the agricultural based economy to one that is industrial based. The government wanted to protect the local industries from international competition by imposing taxes on imports through the practice of protectionism. For Brazil to move its resources from the uncompetitive industrial sector to competitive industries, comparative advantage should be given prior consideration. The country should stick to developing agriculture and diversifying the use of agricultural products. For instance, sugar cane can be used to produce more ethanol whose demand is high. Sugar cane is primarily used to produce sugar but diversification will provide a platform for the production of ethanol. The global ethanol trade is lucrative and Brazil would have an upper hand in the international market as a result of its comparative advantage with regard to agriculture. For effective competitive advantage, the agricultural resources should be developed and harnessed into different industries to diversify products coupled with the expansion of the global market (Chaddad, 2014). President Rousseff’s policies limit Brazil’s dependence on foreign goods but they disregard the aspect of comparative advantage. The