Corporations and local economies in the Brazilian Amazon: the impacts of the mining sectors scheduled investments in Southeastern Pará (2004-2010)

• Published in: Applied economics Vol. 44; no. 10; pp. 1285 - 1302
• Main Author: de Assis Costa, Francisco
• Format: Journal Article
• Language: English
• Published: London Routledge 01.04.2012; Taylor and Francis Journals; Taylor & Francis Ltd
• Series: Applied Economics
• Subjects: Brazil; Economic growth; Elasticity; Foreign investment; Input output analysis; Investment; Local economy; Mining development; Mining industry; Pará; Production measurement; Regional development; Structural change; Studies; Brazil; Para Brazil
• ISSN: 0003-6846; 1466-4283
• DOI: 10.1080/00036846.2010.539544

Southeastern Pará is an extraordinarily dynamic region. There were large cattle ranching projects, financed in the 1960s. Expansion of peasant agriculture, mineral projects and gold prospecting followed the ranching projects. Also important structural transformations reinforced the role of the urban centres and the local rural bases in the logistics of new economic sectors conditioned by the presence of Companhia Vale do Rio Doce (CVRD), in the region since 1985. This article presents the results of an input-output analysis of the investment programme of CVRD from year 2004 up to 2010. The main findings are that the mineral sector has achieved a considerable influence over the economy of Southeastern Pará, so that during the cycle of investments each 1% in the growth of the mineral production creates growth possibilities of about 0.83% for the agricultural sector and about 0.86% for the local urban sectors. Considering just the production growth, a percentile point will imply growth at, respectively, 0.73% and 0.76% for those sectors. For the economy of the rest of the state of Pará, those elasticities would be, incorporating the investments, 0.80% and, without them, 0.68%. For the economy of the rest of Brazil they would be, respectively, 0.88% and 0.78%.