Wednesday, January 11, 2012

Will a Shortage of Qualified Labor Derail the Brazilian Economy?

Brazilis booming. In contrast to the economies of the U.S. and the Eurozone -- where a mix of debt woes, dysfunctional politics and consumer weakness has conspired to dampen economic growth -- Brazil is on track for yet another year of above-average GDP performance. Driven by a number of factors -- including Chinese demand for raw materials, a fast-growing and highly acquisitive middle class, large inflows of foreign investment and the ongoing development of its vast pre-salt oil deposits -- the country is experiencing a multiyear growth spurt unlike any in its recent past.
However, while outsized economic growth brings the promise of greater national prosperity, it also poses a host of new challenges, some of which the country may not be fully prepared to address. “One of Brazil’s biggest problems,” says Masao Ukon, a partner in the São Paulo office of the Boston Consulting Group, “is a shortage of qualified labor.” Indeed, as one of the key inputs to Brazil’s burgeoning economy, qualified labor is a precious resource whose inadequate supply could pose significant risks to the country’s growth trajectory.


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