How to confront the global, structural and management crisis in bahia
HOW TO CONFRONT THE GLOBAL, STRUCTURAL AND MANAGEMENT
CRISIS IN BAHIAi
State of Bahia in Brazil is faced today with multiple threats to their economic, social
and environmental foremost among them: 1) the decline in exports; 2) the decline in
GDP growth; 3) insufficient domestic savings; 4) depression economic; 5)
deindustrialization of Bahia; 6) raising the Brazil Cost; 7) increasing regional
inequalities; 8) the worsening of social and environmental problems of Bahia; 9) the
worsening of the structural problems of Bahia and, 10) the crisis management in the
public sector of the State of Bahia.
1. Threat of falling exports of Bahia
Table 1, below, shows the evolution of the trade balance of Bahia from 2000 to 2011 .
Table 1 - Balance of trade - Bahia (US$ million)
Year Exports Imports Balance
2000 1944 2242 -298
2001 2 122 2286 -164
2002 2 412 1878 535
2003 3 261 1946 1315
2004 4 066 3021 1046
2005 5 990 3351 2639
2006 6 773 4475 2298
2007 7 409 5415 1994
2008 8 699 6310 2389
2009 7 011 4673 2338
2010 8 886 6706 2180
2011 11 016 7749 3267
Source : MDIC
With regard to international trade, the trade balance of Bahia, after negative results in
the early 2000s, successive surpluses recorded from 2002, reaching $ 3.3 billion in
2011. The Bahia exports grew on average 17.1 % from 2000 to 2011, compared to 15 %
recorded in Brazil. In 2007, 19.73 % of exports from Bahia were bound for the United
States, Argentina 12.15%, Netherlands 9.57 % and China 7.7 %, among others. Despite
the international crisis, the Bahia exports remained at growth in the latest period,
anchored in high commodity prices and the growing economies of China and Argentina,
important destinations of foreign sales in the State of Bahia.
To the extent that remains stagnant United States and the European Union economy,
China's slowdown and the decline in Argentina's, exports of Bahia may be seriously
affected in the coming years. Faced with the threat of future fall in exports, the
government of Bahia should strive to develop new productive activities primarily for
the supply of the domestic market of Bahia and the country supported the potential
existing in its territory. The Bahia government should also develop actions for the
restructuring of economic sectors that produce intermediate goods accounted for 72 %
of exports from Bahia that are affected by the fall in exports in the light of the impacts
of the global crisis on their production levels .
2. Threat of decline in GDP growth in Bahia
The economic structure of Bahia has great spatial and sectoral concentration. Industrial
activity is concentrated primarily in the Metropolitan Region of Salvador (RMS); grain
production in the West; irrigated fruit growing in the hinterland of San Francisco, and
the production of cellulose, in the extreme south of the state of Bahia- the four poles of
dynamic Bahia economy. Moreover, about two thirds of its territory lies in the semiarid
region that, besides presenting drought that affect economic activity, has its economic
base supported on family farms.
Regarding the sectoral distribution, the Bahia is characterized by the production of
intermediate goods and raw materials for export abroad and to the industry in other
regions of Brazil. The decline in Bahia exports of intermediate goods and raw materials
associated with the likely decline in Brazil's economic growth already observed at the
time contribute significantly to the decline in economic growth of the State of Bahia.
Figure 1, below, shows the evolution of GDP Bahia compared with the evolution of
Figure 1 - Annual growth rate of GDP of Bahia and Brazil
Analysis of Figure 1 reveals that the evolution of the GDP of Bahia bears a strong
correlation with that of Brazil. As there isn´t a favorable GDP growth in Brazil in the
coming years, Bahia will present performance similar to Brazil. It should be noted that
the Gross Domestic Product (GDP ) of Bahia grew 2 % in 2011 according to estimates
from the Superintendence of Economic and Social Studies of Bahia (SEI), reflecting the
dynamism of agriculture - which expanded 9.8%, led by grain production in the West
region- and the service sector - which grew 3.6 % , driven by retail. On the other hand,
GDP growth was limited by the performance of the industrial sector, which fell 2.9 % in
2011, largely due to falling demand in the international market.
2003 2004 2005 2006 2007 2008 2009 2010
Bahia’s GDP recorded a growth of 2.2 % in the 2nd quarter of 2013, compared to the
previous quarter. According to projections made by Banco Itaú, the average GDP
growth of Bahia will stay at 1.8 % between the years 2011 and 2015 and 2.6 % between
2016 and 2020, which approximates the GDP growth in Brazil designed also 2.6% [See
the article Bahia deverá crescer 1,8% por ano até 2015 (Bahia expected to grow 1.8%
per year until 2015) available on website
<http://www.sudic.ba.gov.br/Noticia.aspx?n=350 available on the website>].
To avoid the drop in economic growth and make the Bahia State grow at high rates, it is
imperative that the federal government promotes the use of economic potentials in the
state with the support of the government of the State of Bahia based on a development
plan focused on policy import substitution and the adoption of policies that contribute to
increase savings in the public sector and the private sector to raise the rate of investment
in Brazil to 25 % of GDP.
Additionally, the government of Bahia need to strive federal government to adopt
policies of fiscal and financial incentives to promote investments in all regions of
Brazil, especially in the North and Northeast where is the State of Bahia. In turn, the
government of the State of Bahia need to draw up a development plan also focused on
policy of import substitution and the use of existing economic potentials in their
territories. But for this to happen, it is indispensable that federal government in Brazil
and the government of the State of Bahia recover its investment capacity not only to
invest in infrastructure, but also provide incentives for the private sector to feel attracted
to invest .
3. Threat of insufficient domestic savings in Bahia
Bahia presents many difficulties to increase their savings rate to promote public and
private growth. In general, Bahia has always sought to attract foreign capital from other
regions of Brazil and abroad for investment in the productive sector in its recent history.
Between 1970 and 1980, with financing at subsidized interest rates, tax exemptions and
tax incentives with the investment of considerable resources coming repayable public
bodies to encourage the development of the country, the industrial districts were
deployed inside RMS (Center Industrial of Aratu and Petrochemical Complex of
Camaçari) and riding the park of intermediate goods concentrated in segments of the
chemical / petrochemical and non-metallic minerals. The deployment of Ford plant and
other industrial enterprises that occurred from 1980 to the present time in the State of
Bahia relied on tax incentives offered by the State of Bahia government.
To increase public sector savings in Bahia, which the state government needs to do is,
on the one hand, to renegotiate the repayment of domestic debt stretching it for a certain
period of time and on the other, make its current expenses are reduced dramatically or
grow less than the Gross Domestic Product (GDP) to dispose of funds for public
investments, especially in poor economic infrastructure (energy, transport and
communications) and social (education, health, housing and sanitation). Thus, the
conditions would be created for the public sector can invest and finance from its own
resources, and not borrowing as currently occurs. It is also necessary to encourage
increased private savings for investment decreasing the tax burden and reducing the
It should be noted that the payment of the Public Debt of Bahia in 2011 reached R$
1,415,394,618.00 (5.22 % of the budget) and the Interest and charges equivalent to R$
503,486,354.00 (1.86 % of the budget) and amortization amounted to R$
911,908,264.00 (3.36 % of the budget). It should be noted that the amount of
investments in 2011 amounted to R$ 1,752,502,441.00 (6.46 % of the budget). These
figures show that the state government of Bahia could renegotiate the debt service
payment by stretching a longer time investment that could at most double. The
composition of the Public Debt by Creditor Bahia in 2011 is presented in Figure 2
Figure 2 - Breakdown of debt by creditor of Bahia in 2011
If the government of Bahia wants to renegotiate the payment of its debt with creditors,
could articulate how Treasury (federal government) and federal banks accounted for
76.31 % of total public debt.
4. Threat of economic depression of Bahia
If it does not change the direction of the Brazilian economy, the recession will deepen in
Brazil with plummeting demand, a framework uncontrollable mass unemployment,
widespread bankruptcy of companies (including industry), low levels of production and
investments. In these circumstances, the depression will be installed in Brazil and in the
State of Bahia that will face the same problems in the United States and the European
Union since 2008 and Japan since the 1990s. To avoid economic depression in Bahia, it
must, first of all, to avoid an economic depression in Brazil working with the federal
government in the preparation of a development strategic and systemic plan
contributing to the elimination of existing and potential economic threats, enhancing
existing strengths in the Brazilian economy and the State of Bahia and the use of
existing opportunities and potential in Bahia.
Moreover, the Bahia government should strengthen existing strengths in its economy by
adopting strategies for strengthening their agricultural, industrial and mineral
production sectors, its energy, transport and communications infrastructure and their
poles of growth and development which are located its main economic structures.
Strengthening the existing economic strengths in Bahia requires the adoption of the
following strategies: 1) encouraging investment in increased productivity and increased
agricultural, mineral and industry production covering all regions of Bahia; 2)
encouraging investment in strengthening energy, transportation and communication
infrastructure across all regions of Bahia; and 3) structuring the axes of development of
Bahia (São Francisco, Chapada, Extremo Sul, Mata Atlântica, Metropolitano, Grande
Recôncavo, Planalto e Nordeste - Map 1 ) economically integrating together the poles of
growth and development of Bahia (Salvador, Camaçari, Feira de Santana, Vitória da
Conquista, Itapetinga, Lençóis, Jequié, Ilhéus, Itabuna, Porto Seguro, Eunápolis,
Teixeira de Freitas, Juazeiro, Irecê, Guanambi, Bom Jesus da Lapa e Barreiras - Map 2).
Map 1 - Axes Development of Bahia
Source : Magalhães, Cláudia et alli. Eixo Nordeste: Desempenho Econômico e Perspectivas. Desenbahia,
Map 2 - Poles of growth and development of Bahia
Source : PORTO, Edgard; CARVALHO, Edmilson. A espacialização da economia baiana, o Mercosul e
outras regiões. In: SEI: A Bahia no Mercosul. Salvador, 1996.
The Bahia government should also take advantage of the economic opportunities
existing and potential strategies for taking advantage of its vast natural resources (water
resources, mineral resources, farmland, renewable energy solar and wind, etc.). These
opportunities should be identified and evaluated for their viability for use, then prepare
investment plans aimed at economic and social development of Bahia. In this sense, the
necessary strategies contemplate the preparation of investment plans covering all
regions of Bahia for the exploitation of natural resources in the fields of energy
(hydropower, wind power plants, solar power plants, biomass, oil exploration in the
deep ocean layer pre salt), mineral, agricultural and industrial.
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To be successful in implementing these strategies, it is important that federal and Bahia
government have sufficient financial resources to be obtained with the renegotiation of
their public debt and reducing your expenses costing, as well the Bahia government is
structured in a network which is a kind of overall organizational structure that operates
according to a logic chart circular or star-shaped, the center of which is the lead
organization. Around this main organization (federal government) are several other
entities (state governments, municipalities and state and public enterprises) that
articulate with the first. The operation of this type of organization usually relies on
modern computer systems and telecommunications that enable centralized management
and control of all processes.
5. Threat of deindustrialization of Bahia
The current economic policy of the federal government is contributing to the de-
industrialization of Brazil which tends to deepen if nothing is done to reverse it. The
share of industry in Brazilian GDP (Gross Domestic Product) fell in 2011 to the levels
of 1956, when President Juscelino Kubitschek (JK) gave impetus to the industrialization
of the country by launching his Target Plan, which promised to make the Brazil forward
"50 years in 5". In 1956 during the JK government, industry accounted for 13.8 % of
GDP [See the article by Reinaldo Azevedo, under the title O PT da desindustrialização
- Participação da indústria no PIB recua aos anos 50 (The PT of deindustrialization -
Participation of industry in GDP eases to 50), available at the website
The Bahia industry is sensitive to international market conditions. In 2011, the
industrial output accumulated decrease of 4.3% in Bahia, according to the Monthly
Industrial Survey - Regional ( PIM - PF) of IBGE , which partly explains the slowdown
in global activity. In the twelve months to May 2013, industrial activity in the State of
Bahia increased 0.3 %, compared with the 1.8% drop observed nationwide.
Figure 3 below shows the structure of each sector participation in the total GDP of
Bahia from 2000 to 2008.
Figure 3 - Structure of Each Sector Participation in Total GDP of Bahia - Selected
Years - ( in% )
Source : SEI/Coordenação de Contas Regionais (2012).
Analysis of Figure 3 reveals that the secondary sector (industry) who participated with
50 % of the GDP of Bahia in 2000 was below 40 % in 2008 featuring the existence of a
process of deindustrialization. It appears, therefore, that the process of de-
industrialization occurring in Bahia is manifested in a range less severe than in Brazil as
a whole. However, Bahia will not be immune to the deindustrialization process that
records. The existence of expensive energy, bank "spreads" the biggest in the world,
valued exchange rate, huge tax cost and logistics poor tend to undermine the
competitiveness of the Bahia internally and externally. One of the problems that are
demanding urgent solutions in Brazil and in Bahia are the precarious transport
infrastructure and logistics bottleneck that contribute to the increased costs that make
the prices of products of the manufacturing industry in Brazil become 30% more
expensive than those made elsewhere.
To avoid deindustrialization of Bahia, the Bahia government should strive for the
federal government to adopt an industrial policy that contributes to effectiveness for
permanent reduction of production costs in Brazil industry against Asian countries,
especially China, that can only occur in four ways: 1) reducing the Brazil Cost with
falling tax burden and improving the logistics infrastructure in Brazil; 2) increased
productivity of the industry with the growing of its levels of efficiency and effectiveness
and strengthening their supply chains; 3) selective and permanent relief industry by
reducing the tax burden incident on it; and, 4) combating predatory competition of
imported products with the restriction or limitation of its entry into the domestic market.
Alongside all this, the government of Bahia should adopt measures aimed at : 1) to
overcome the huge problems of Bahia education at all levels to increase the supply and
training of human resources; 2) the development of knowledge resources by adopting
programs for implementation of R & D centers, further education institutions,
technology acquisition and attracting brains from abroad; 3) adequate resource
allocation for energy infrastructure, transport and communications by establishing
effective programs to eliminate bottlenecks; and, 4) fostering the links between the
supply chains of companies and their suppliers to eliminate gaps.
6. Threat of rising of Brazil Cost
Brazil Cost is one of the biggest barriers to the development of the country and
fundamentally results of: 1) the endemic corruption in the Brazilian public sector whose
annual cost in Brazil is around 41.5 and 69.1 billion dollars; 2) the high deficit public
(R$ 2 trillion); 3) the high real interest rates; and 4) the high " spread" banking; 5) the
highest tax burden (35 % of GDP) of the world's largest; 6) the high labor costs ; 7) the
high costs of the pension system; 8) the tax law complex and inefficient; 9) the high
cost of electricity; 10) poor infrastructure (blackouts in the electricity sector and
saturation of ports, airports , roads and railways); and , 11) the lack of skilled labor.
All these problems need to be overcome by the federal government to eliminate the
Brazil Cost. These solutions should be complemented by the adoption of measures
aimed at: 1) a drastic reduction of the tax burden by lowering the cost of government
spending and government debt burden by reducing the Selic interest rate, reducing the
"spread" banking and conducting a thorough reform of the state and public
administration in Brazil; 2) the drastic reduction of public debt with the decrease in
interest rates Selic, 3) eliminating the logistical bottleneck with incentives for public
and private investment in energy, transportation and communications infrastructure, 4)
deployment of networked organizational structure in the Brazilian state to raise levels of
efficiency and effectiveness of public administration in Brazil; and, 5) combating
corruption with achieving political reform and a reform of the state and public
administration through a Constituent Assembly exclusive.
In turn, the government of State of Bahia can collaborate in solving these problems by
fighting against corruption, reducing the cost of public spending, improving existing
infrastructure and helping to eliminate the shortage of skilled labor. Corruption can be
eliminated since there is transparency of their actions by the government of Bahia, the
cost of government of Bahia spending can be reduced since there is decrease in the
number of departments and commissioned positions, and the elimination of poor
infrastructure can be accomplished with investments and proper maintenance of the
power sector, ports, airports, highways and railways.
All these problems need to be overcome to eliminate the Brazil Cost. These solutions
should be complemented by the adoption of measures aimed at: 1) eliminating the
logistical bottleneck with incentives to public and private investments in energy,
transportation and communications infrastructure; 2) the deployment of networked
organization in the State of Bahia to raise their levels of efficiency and effectiveness;
and, 3) curb corruption endeavoring to carry out political reform and a reform of the
state and public administration through a Constituent Assembly exclusive.
7. Threat of increasing regional inequalities
Regional inequalities Bahia concern basically the following: 1) excessive economic
concentration in RMS - Metropolitan Region of Salvador (Capital of the State of Bahia)
- The RMS concentrate 70 % of the manufacturing industry in Bahia and is responsible
for 35-40 % of the state GDP; 2) Decline in development of the region of Bahia cocoa -
The revenue from cocoa has represented about 80 % of the Bahia exports in mid- 1970.
Today, the State of Bahia has the condition of cocoa importer. The cocoa sector debt
hits R$ 1 billion; and, 3) Underdevelopment of the semiarid region of Bahia -A semiarid
region covers about 70 % of the area of Bahia state, is characterized by having water
scarcity and extreme poverty, as well as having one agricultural of low productivity,
fledgling industry and activities related to trade and services underdeveloped compared
to the most dynamic regions of Bahia.
To eliminate or reduce regional inequalities becomes essential:
• To develop plans systemic and strategic of development for the State of Bahia as a
whole and for each region.
• To strengthen and integrate their poles of growth and development (Salvador,
Camaçari, Feira de Santana, Vitória da Conquista, Itapetinga, Lençóis, Jequié, Ilhéus,
Itabuna, Porto Seguro, Eunápolis, Teixeira de Freitas, Juazeiro, Irecê, Guanambi, Bom
Jesus da Lapa, Barreiras,, among others) to be connected to each other by roads
(highways, railways and waterways).
• To strengthen the axes of development of Bahia : 1) São Francisco; 2) Chapada; 3)
Extremo Sul; 4) Mata Atlântica; 5) Metropolitano; 6) Grande Recôncavo; 7) Planalto;
and, 8) Nordeste.
• To harness the endogenous development potential of each municipality and each
region with the use of factors of production (capital, human resources, knowledge
resources, research and development, information and institutions, among others).
• To optimize and improve existing factors of production (human resources, physical
resources, knowledge resources and capital ) .
• To promote proper allocation of economic infrastructure (energy, transport and
communications) and social (education, health, sanitation and housing).
• To promote the integration of the São Francisco River basin to the basins of other
rivers in Bahia and deployment of dams at strategic points of its territory to eliminate or
reduce water scarcity in semi-arid.
• To expand the existing industrial structure with the increase of their competitiveness,
to develop micro, small and medium enterprises and to promote the development of the
shipbuilding industry .
• To make the industry on the Bahia less dependent of São Paulo with the expansion of
the local processing industry.
• To create a competitive business environment that contributes to the innovation of
products and processes.
• To make the government of the State of Bahia to operate as Network to ensure,
through the Department of Planning with the support of the State Secretariats sectoral
integration in the actions of all public organizations in the implementation of strategic
• To establish UEDRs - Units Strategic of Regional Development to operate in the
network in each region covered by the development priorities of Bahia which are
connected to the Department of Planning and would articulate in each region its
municipalities actions, all organs of federal, state and municipal organizations, besides
civil society .
• To work with the federal government to provide tax and financial incentives for the
development of backward regions.
• To provide fiscal and financial incentives from the State of Bahia government for the
development of backward regions.
8. Threat of worsening social and environmental problems of Bahia
The Index FIRJAN Municipal Development (IFDM ) examined indicators of education,
health, employment and income of all municipalities in Brazil. The study was done by
the economic team of the Federation of Industries of the State of Rio de Janeiro (Firjan).
Social indicators show Bahia between poverty and development
(http://atarde.uol.com.br/noticias/5626617). With an index of 0.6093, a range that goes
from 0.0 to 1.0, Bahia occupies the 20th place among the 27 states of Brazil. No
municipality in the State of Bahia is part of the select club of 226 Brazilian cities where
the population lives in a high level of development (between 0.8 and 1.0).
The worst social indicators are in the trenches of Bahia. Ten municipalities still occupy
the range from low development indices which are 0.0 to 0.4. 186 municipalities in
Bahia are among the 500 worst Brazil IFDM. The misery of Bahia in Brazil only wins,
in order, to Maranhão, Piauí, Ceará and Alagoas. Among the 27 states that make up the
Brazilian federative unit, Bahia is in fifth place in terms of misery, and its population,
most basically lives in the semiarid region, but also in the Metropolitan Region of
The semiarid region of Bahia is a difficult challenge to overcome because is one of the
most inhospitable regions of the planet. The government of the State of Bahia does
nothing, does not help, to develop that region. There isn´t a plan for the development of
the region and developmental agencies, like SUDENE and DNOCS, that should
participate in planning to overcome poverty, failed. Bahia occupies the 6th position of
the country's GDP, that is, the sixth richest state of Brazil. However is the 20th in regard
to the Human Development Index (HDI). Bahia is the fourth state with the highest
concentration of income in Brazil. The extreme poverty of Bahia makes it as the 5th
most miserable in the ranking of the states of Brazil .
Income inequality in State of Bahia, measured by the Gini Index, declined in the period
2001 to 2009, but remains higher than that of Brazil, and it is in the twentieth position in
the ranking of income distribution. Despite the reduction of 21.2 % in 2001 to 10.1 % in
2009, the number of people living in extreme poverty follows significantly higher than
the national average, 5.2%. In 2009, 16.8 % of Bahia was illiterate, compared to 18.7%
of the Northeast and 9.7 % of Brazil. In Brazil, in the same year, the average schooling
was 7.5 years of study, while in the state of Bahia indicator signaled 6.4 years of study,
and its countryside, just 3.9 years.
Bahia has high crime rates higher than in other regions of Brazil and the world. In
Salvador, the number of homicides increased five times in ten years that has the
homicide rate of 61 per hundred thousand inhabitants, five times more than establishing
the United Nations Organization (UN) as bearable for large cities (12 per 100,000). Just
as a comparison: São Paulo has reached 8.95 per 100,000 inhabitants in 2011. The
increase in violence in the Metropolitan Region of Salvador (RMS) exceeded the rates
of major capitals like Rio de Janeiro and São Paulo. It is clear, through research, studies
and surveys conducted by the competent bodies, the countries where social inequality is
high, also report similarly high rates of other negative factors, such as violence and
Overcoming the current social problems requires the adoption of the following
strategies: 1) to strengthen the civil society organizations of Bahia so that they can press
the holders of economic power and the federal and the state government to make
concessions of a social nature that translate improving the income distribution of Bahia,
contemplating also participate in the design of government policy development; 2) to
invest in improving the infrastructure of education and health and the public transport
system and to increase the supply of affordable housing to meet the demands of society;
and, 3) to adopt a policy to prevent and combat crime by providing the majority of the
population of Bahia of means minimum for survival as employment, education, health
and housing, as well as restructuring the police and the courts to exercise combating
crime without the disproportionate use of violence.
The main environmental problems of the State of Bahia are: 1) predation forest
rainforest; 2) environmental pollution caused by industries along the coast where is the
forest rainforest; 3) degradation of springs, siltation and pollution of rivers due to
indiscriminate and predatory use of its waters for irrigation especially in the savanna; 4)
gradual destruction of the paths and vegetation with serious impact on wildlife due to
increased use of land for farming and grazing in the savannah; 5) vulnerability to
desertification “caatinga” due to the weather and terrain present in western Bahia in the
left margin of the São Francisco River, in the northeast region of Raso da Catarina
extending to Ribeira do Amparo southwards and into the state of Pernambuco and the
left bank of the Lake Sobradinho; 6) implementation of crops in the savanna that require
large amount of water in a region characterized by drought; 7) the occurrence of drought
that occurs when the water deficit is prolonged excessively victimizing the people,
crops and livestock for lack of water and taking the population of the savanna to tackle
the problem of malnutrition and hunger; and, 8) salinization of waters of the dams built
in the bush due to soil characteristics, many of which have become unusable for human
and animal use.
Likewise the social framework, the environmental situation of the State of Bahia has
also extremely serious. Today, very little remains of the lush jungle rainforest,
environmental pollution caused by wastewater from the cities of medium and large
industries and the waste released into rivers, bays and ocean without proper treatment
and degradation of springs, siltation and contamination rivers due to indiscriminate and
predatory use of its waters, especially for irrigation, represents a major threat to
ecosystems forest, cerrado and caatinga in the state of Bahia.
It appears , also, the gradual destruction of the paths and vegetation with serious impact
on wildlife due to increased use of land for farming and grazing in the savannah.
Accentuated the vulnerability of the savanna to desertification due to climate and
topography present in western Bahia on the left bank of the São Francisco River, Bahia
in the northeast region Raso da Catarina extending to Ribeira do Amparo southwards
and into the State Pernambuco and the left bank of the Sobradinho.
Occurs in the savanna irrationality to deploy crops that require large amount of water as
is the case of beans in Irecê, a region characterized by water deficit when the logical
thing would be to use crops adapted to the environment that wouldn´t demand large
volume of water. In addition, many dams built to meet the needs of the population,
crops and cattle are saline, making it useless for human and animal use.
Have not been adopted preventive measures to fight drought by the state government of
Bahia which victimize the population, crops and livestock for lack of water and leads
the inhabitants of the savanna to tackle the problem of malnutrition and hunger and
consequent rural exodus. In this sense, it is urgent to promote the integration of the São
Francisco River basins with basins of other rivers in Bahia and deployment of dams at
strategic points of its territory to eliminate or reduce water scarcity in semi-arid.
In the State of Bahia, the democratization of power structures is the essential condition
for which would be effective participation of civil society in the promotion of
economic, social and environmental sustainable basis. That would be the condition for
the Civil Society intervened directly in economic planning, social and environmental
state of Bahia and contribute towards preventing the fruits of the development process
had exclusively as its main beneficiaries the urban and rural oligarchies.
9. Threat of worsening structural problems of Bahia
The structural problems of Bahia are the following : 1) Excessive concentration of land
ownership; 2) deficiency in energy infrastructure; 3) Deficiency in transportation
infrastructure; 4) Deficiency in educational infrastructure; 5) Deficiency in health
infrastructure; 6) Deficient in basic sanitation infrastructure; 7) Deficiency in water
infrastructure; and, 8) Deficiency in infrastructure housing.
Excessive concentration of land ownership in Bahia
The agrarian structure of Bahia has been changing in recent decades, and with
increasing concentration of land
BB45-11E251CEFD4F&tpr=sbt&si=pconverter). In recent years, there was an increase
in the number of small farms and smallholdings to decrease its footprint. On the other
hand, it was increased the area occupied by large landowners properties, remaining
almost constant the participation of this group in the overall structure. There is
intensification of land conflicts in rural areas, especially in the regions most dynamic
and possessing abundant natural resources.
Land reform is urgent and necessary to the solution of the problem of land
concentration in the State of Bahia, with the expropriation of unproductive areas and the
granting by the federal and state levels of technical support and credit to small and
medium producers. The land reform depends on the availability of public funds for
investment in expropriated properties and supporting the activities of agricultural
production to the beneficiaries of this action.
Deficient power infrastructure of Bahia
There is a high risk of blackouts due to the vulnerability of interconnected electric
system in Brazil that requires the use of high- polluting power plants operating cost.
Bahia has the greatest potential for solar and wind energy in Brazil and great potential
for power generation based on agricultural waste and municipal solid waste that are not
properly harnessed. The State of Bahia has a deficit in the production of ethanol and
biodiesel despite the great potential for production.
The response to deficient power infrastructure Bahia would be harnessing the energy
potential and increased production of ethanol and biodiesel to meet the demand of Bahia
and export to other states. The improvement of the energy system of Bahia depends on
the existence of public and private resources for investment in its infrastructure with the
implementation of new production units located in strategic points of its territory, as
well as the maintenance of existing structures.
Deficiency in the transport infrastructure of Bahia
The transport system of the State of Bahia is concentrated basically on the highways at
the expense of railways, waterways and coastal shipping (Map 3). An array of
predominantly road transport, such as Brazil and Bahia, makes no sense. The port
system of Bahia cannot keep inefficient and costly. Maritime transport being the main
mode of international trade, it is necessary to build a system of international port in
Bahia. Most modern ports and rail infrastructure works are essential to Bahia.
Baia de Todos os Santos (The Bay of All Saints) is the second largest deepwater recess
of the world, and the largest in South America, which gives excellent features for the
creation of a large port complex in the State of Bahia. The grain produced in the West
should be disposed by a new grain terminal in the Baia de Todos os Santos, enabling the
return shipping of fertilizers produced in the Metropolitan Region of Salvador.
Map 3 - Main transport Bahia
With the deterioration of the road network, expands, of course, the number of accidents
as well as operating costs of that modal. According to World Bank data, poorly
maintained as a highway to Bahia can increase the cost of trucking heavy as 46 %.
Thus, not surprisingly, the shipping costs in Brazil reached, with poor road
maintenance, levels much higher than international standards.
The challenge is to recover the railroads integrated with the expansion of other modes.
This occurs mainly in Western Bahia that has only the railroads undersized for the large
volume of cargo in the region . With the polarization in RMS, the road connections
between regions are very weak or even nonexistent, making it difficult, by far, the
domestic trade. That structural problem sum up the very precarious state of most roads.
First new option for load flow from West is the proposal of a multimodal transport
system linking the highway BR 242 (the stretch Luís Eduardo Magalhães – Muquém -
300 km), the São Francisco waterway (Muquém-Juazeiro - 604 km) and railway of
FCA from Juazeiro to Salvador (570 km). This alternative requires a relatively small
investment because all routes already exist, needing only to be recovered / adapted and
The construction of the Railroad of East-West Integration (Fiol) will enable the
connection between the western of Bahia, on the border with Tocantins, and Porto Sul
P I A U Í
P E R N A M B U C O
M I N A S
G E R A I S
Senhor do Bonfim
Vitória da Conquista
0 30 60 90 km
46’ 44’ 42’ 40’ 38’
46’ 44’ 42’ 40’ 38’
in Ilheus (Map 4). The Porto Sul Project can handle more than 60 million tons of
products such as iron ore, raw materials for the construction, cereals, fertilizers and
other bulk. All this will be carried by the East - West Rail and exported by ship docked
at the Porto Sul deploying Bamin, Paoeto Sul and Fiol make an economic revolution in
the region, with more jobs, more trade, more services and more business opportunities.
Map 4 - Railroads in Bahia
A loss of R $ 2 billion is the approximate size of the damage that will be caused to the
public coffers due to lack of planning and a multitude of faults committed in the
execution of two megaproject of infrastructure in Bahia: The Railway East-West
Integration (Fiol) and Porto Sul, the port complex set to be built in Ilhéus.
The implementation and management of the two infrastructure projects present
significant deficiencies resulting from their planning not properly integrated and
coordinated. Valec, responsible for the work of Fiol, acknowledged that no studies on
possible impacts because of the mismatch in terms of completion.
The situation of the railroads in Bahia is far from reasonable. Not only the integration
between regions still wanting, nor is it possible to live with a federal network state so
The greater allocation of resources for infrastructure Airway in the State of Bahia is
explained by the size of the state, which prevent the existence of a single gateway.
Undertaking a strategy of internalization of tourism in the State of Bahia, new airports
have been deployed in major tourist cities of Bahia. Thanks to this strategy State of
Bahia already has currently one second international airport in Porto Seguro, and
besides Ilhéus Airport more six national -sized airports.
The improvement of the transport system in Bahia depends on the availability of public
funds for investment in its infrastructure with the implementation of new modes located
at strategic points of its territory, as well as the maintenance of existing and future
Disabilities in educational infrastructure of Bahia
Bahia has 277,690 children and young people outside the education system. Places are
insufficient to meet demand in higher education in Bahia and Brazil. With only a federal
university, higher education in Bahia was maintained for a long period without
expanding the number of vacancies or the teaching staff. The participation of
universities in the State of Bahia offer undergraduate and registered in enrollment in
public higher education is quite significant, given almost two thirds of the number of
students enrolled in public higher education in the state.
The demand for higher education has been attended by many private institutions with
low quality of education. It is the high dropout in higher education in Bahia and Brazil.
Of the 10.3 million Bahia aged more than ten years, 8.1 million are literate in the State
of Bahia. More than two million illiterates from the age of ten. No other state has so
It is common sense that a nation cannot be built without education of quality. Brazil and
Bahia in particular need to universalize education at all levels, from primary education
to University. One of the great challenges of Brazilian education, at present, is the
expansion of higher education with the use of Distance Learning (ODL). Instead of
multiplying structures of universities and colleges throughout Brazil with high costs,
should, instead, multiply the number of distance education courses through distance
learning technology. It is in this sense that the ODL can make an important
contribution, increasing the potential for access to the University of Brazilians,
especially in states and municipalities with greater difficulty in mobility for students as
The Internet has accelerated the accumulation of knowledge and production, making the
capacity of practitioners to be enlarged and more demanded. The development of the
Internet leads us to think of a revolution of the universities in the future, once the
physical classroom education classes can be supplemented, even replaced by distance
classes. With the help of video conferencing, discussion forums (chat), electronic mail
and other technological applications, universities are able to digitize. Thus, are reduced
physical limitations (such as geographical distance) for access to university education.
In Brazil, possessed of an education system exceeded, it is imperative restructuring at
all levels, from elementary to University.
Improving the situation of education in Bahia depends on the availability of public
funds for investment in its infrastructure with the implementation of new educational
facilities at all levels located at strategic points of its territory, as well as the
maintenance of existing and future structures.
Deficient health infrastructure of Bahia
The failure of the public health system is checked throughout the state of Bahia. Men,
women and children huddled in the corridors of hospitals in long lines waiting for
service, as there are few doctors working in a cramped space to house patients with
dignity, and the lack of medicines.
Public hospitals are in a state of calamity, with few attending physicians, beds and
patients waiting in crowded hallways. Many are seen sitting on the floor. Others do not
survive the waiting time and die. Bahia has less than 50% of hospital beds than
indicated by the World Health Organization. There are enough clinics that have serious
problems of structure and funding. There are no doctors, nurses and health professionals
to meet the real health needs of the population.
The improvement of the health situation in Bahia depends on the availability of
resources for investment in public health infrastructure with the deployment of new
hospitals and health centers located at strategic points of its territory, as well as the
maintenance of existing and future structures.
Disability in basic sanitation infrastructure of Bahia
Sanitation is the grouping of measures for water supply, sanitation, urban drainage of
rainwater, actions relating to solid waste and control of disease-transmitting vectors.
The water supply in urban areas is 53.59 % and rural 3.82 % of total households. Only
23.75% of households have sewage systems. 59.63 % of urban households, 2.03 % of
rural households and 61.67 % of total households have garbage collected directly. 63.61
% of the municipalities have sewer service.
Of the 3.1 million private households of the State of Bahia, no less than 762,000 have
no bathroom or toilet, which represents about three million of inhabitants of the State of
Bahia doing their physical needs in the open in full XXI Century. Even in relative
terms, Bahia has one of the worst rates of households without sanitary installation,
ranking 23th in Brazil.
Garbage collection in Bahia only reaches 1.9 million households, or 40 % of the houses
throw debris haphazardly. The IBGE reports that the State of Bahia has 13 million
inhabitants with a population of five million Bahia without garbage collection.
IBGE data show that more than one million households in the State of Bahia do not
have water supply network overall, ie , water is acquired in well, spring or directly into
rivers and lakes. Result: more than four million of inhabitants of the State of Bahia
drinking untreated water .
Improved sanitation system Bahia depends on the availability of public funds for
investment in its infrastructure as well as maintenance of existing and future structures.
Deficiency in water infrastructure Bahia
Bahia presents major deficiency in water supply in all regions, especially in semiarid
characterized by water scarcity. The problems afflicting the population, especially that
of the semi-arid, with regard to access to water quantity and quality, affecting their
health and restrict the opportunities for improvements socioeconomic communities.
On the severity of the drought that affects mainly the semiarid region, a leading
authority on water resources of Bahia, the Engineer Manoel Bomfim, now deceased,
wrote the article A seca no Estado da Bahia (The drought in the state of Bahia) in which
questions the fact that the government of Bahia not have adopted no preventive
measures to mitigate its effects when it was common knowledge that the drought that
settled in the backlands of Bahia was provided by long-time studies at the Institute of
Space Activities (IAE) of São José dos Campos .
According to figures released by the press, more than 500,000 cattle have died in the
Semi Bahia because of drought, and dairy products, the fall was around 70 %.
According to Manoel Bomfim, the government of Bahia was lenient to develop a
specific program and determined to build a water infrastructure in Bahia. Given this
situation, it is urgent not only increase the supply of water, but also its distribution in all
regions of the State of Bahia.
There is an urgent need for structural works and priority with the goal of bringing the
benefits to society resulting from the expansion of supply of good quality water for
human consumption and watering animals, and increased supply of irrigated areas for
food production, generation employment and income and improving the quality of life
of people in the countryside in Bahia. To increase the water supply, the State of Bahia
government should promote the integration of watershed through the implementation of
the Project Integration São Francisco River with river basins located in Bahia (Map 5).
Map 5 - Bahia - basins and major rivers
To address the impacts of the structural crisis in Bahia, it is essential to:
42 40 38
42 40 38
Rio Inham bupe
Rio de Contas
Rio Colôn ia
60 0 60 120 180km
Bacia do Extremo Sul
Bacia do Recôncavo Norte
Bacia do Recôncavo Sul
Rio de Contas
Bacia do Leste
Rio São Francisco
Limite de Bacia1
N A M B U C O
N A S
• Implement a planning system of the State of Bahia characterized by systemic and
strategic approach covering their regions and municipalities and prepared in
coordination with the federal and municipal governments with the participation of civil
• Deploy a network structure (Network Status) to ensure, through the Department of
Planning with the support of the State Secretariats sectoral integration in the actions of
all public organizations (federal, state and municipal) in implementing the plan strategic
of development .
• Deploy UEDRs - Units Strategic of Regional Development to operate in the network
in each region covered by the axes of development which would be connected to the
Department of Planning and would articulate the actions of all organs federal, state and
municipal governments with civil society organizations.
• Strengthen civil society organized to be able to obtain concessions from the
government and the ruling classes and establishing balances between the interests of
capital and society as a whole to promote social development and the environment.
• Promote the development of indigenous energy resources (solar, wind, ethanol,
biodiesel, waste, etc.) to meet demand, reducing the vulnerability of the energy supply
and promoting development.
• Promote the development of the transport sector with the increase of railways,
waterways and coastal shipping and port system of Bahia.
• Overcoming the major shortcomings in education, health and sanitation of Bahia,
strengthening the role of the state in the provision of services.
• Develop actions to divert water from the Rio Tocantins to the Rio São Francisco and
promote the construction of dams and the integration of water resources of the São
Francisco River with other rivers of Bahia located in the semiarid region.
• Eliminate the existing housing deficit in the State of Bahia Bahia.
10. Threat of crisis management in the public sector of the State of Bahia
The State of Bahia is faced with three types of crisis in the field of public sector
management: 1 ) Crisis of planning; 2) Crisis of development strategy; and 3) fiscal
crisis of public finances .
Crisis of planning
Planning State of Bahia is not characterized by systemic and strategic approach. To get
the optimization of the State of Bahia from the point of view of regional development,
it´s necessary to have a regional development plan systemic and strategic.
Unfortunately, the government of Bahia does not have a regional development plan
covering the entire state of Bahia.
The government plans are mere letters of intent and not drivers instruments of his
action. Bahia's government is characterized by punctual action such as project - Fiol
Porto Sul, the bridge Itaparica - Salvador, among others. A systemic and strategic plan
of development should include their regions and municipalities, and be prepared in
coordination with the federal and municipal governments with the participation of civil
Crisis development strategy
The government of the State of Bahia has no effective strategy of development that
• The strengthening and integration of its of its economic poles of growth and
development Salvador, Camaçari, Feira de Santana, Vitória da Conquista, Itapetinga,
Lençóis, Jequié, Ilhéus, Itabuna, Porto Seguro, Eunápolis, Teixeira de Freitas, Juazeiro,
Irecê, Guanambi, Bom Jesus da Lapa, Barreiras, among others) to be connected to each
other by roads ( highways, railways and waterways).
• The strengthening of the development axes of Bahia: 1) São Francisco; 2) Chapada; 3)
Extremo Sul; 4) Mata Atlântica; 5) Metropolitano; 6) Grande Recôncavo; 7) Planalto; e
• The use of endogenous development potential of each municipality and each region
with the use of factors of production (capital, human resources, knowledge resources,
research and development, information and institutions, among others).
The government of the State of Bahia is inefficient and ineffective as an organization
for the reasons described below:
• The state government should operate like the Bahia State Network to ensure, through
the Department of Planning with the support of the State Secretariats sectoral
integration in the actions of all public organizations (federal, state and municipal) in the
execution the strategic development plan.
• To operate the network in each region covered by the development priorities should be
established UEDRs - Units Strategic of Regional Development that should be reporting
to the Department of Planning that would articulate the the actions of all the organs of
federal, state and municipal organizations of civil society.
Fiscal crisis of public finances
From 2008 to 2012, current revenues of the State of Bahia grew 51.42 % and current
expenditure 60.62 %. The operating expenses in 2013 increased much more than the
average growth of government expenditure. In the year that the government Wagner
took over the number of commissioned positions totaled 8,101 and now reach 13,000
burdening expenses of the state government. Bahia ranks second in the percentage of
commissioned positions of State of Bahia government. On the outbreak of the 2008
crisis and the prospect was falling in state revenue, there should be a government action
to reduce spending costs and be an effective control of cash flow. This was not done.
The fiscal crisis is the product of managerial incompetence of the government of the
State of Bahia.
The leader of the parliamentary bloc PMDB / DEM in the Legislative Assembly, Mr
Luciano Simões, issued on 10.09.2013, a list of engineering firms that are in a pre -
bankruptcy not to receive payments for services provided to government of the State of
Bahia since 2011. According to the parliamentarian, the Urban Development Company
of the State of Bahia (Conder) is approximately US$ 85 million. The company that tops
the list is the Metrus Engineering, responsible for reforming the Avenida Pinto de
Aguiar (Avenue Pinto de Aguiar) and the construction of Imbuí viaducts. Then appears
the UFC Projects and Inspection, to whom should Conder more than $ 15 million. Still
appear in the list LJS, responsible for the work of the Feira de São Joaquim (Fair of San
Joaquin), the builder Elite, CSC, who takes care of the works of the Pelourinho, the
ConstruQuali, responsible for market Paripe; BSM, which also looks after the
maintenance of fair São Joaquim Itatiaia, among others .
To address the impacts of fiscal and financial crisis in Bahia, it is essential actions
• Implement an effective system of planning and control of public finances.
• Dramatically reduce the cost of funding of public administration in Bahia eliminating
unnecessary departments and agencies and commissioned positions to a minimum.
• Renegotiate the payment of debt service to dispose of public resources for investment
in transport, education, health and housing of Bahia infrastructure.
• Work together with the political parties in order to: 1) prepare technical and
administrative staff to exercise their competence to the management of the public sector
in both the executive and legislative ; and, 2) choosing to compete for office people that
meet the best conditions for the exercise ethically and competently.
• Raise awareness among voters to choose candidates who are most able to defend their
political ideals, ideological and competently perform their charges in public
administration both in the legislature and in the executive.
• Raise awareness among elected officials who hold office in the executive and
legislative powers in order to choose competent assistants, adopt techniques systemic
planning and strategic exercise financial control of public finances need and use public
Lecture at the HBIG-Geographic and Historical Institute of Bahia 24.09.2013, Salvador, Bahia.
Alcoforado, Fernando, engineer and doctor of Territorial Planning and Regional Development from the
University of Barcelona, a university professor and consultant in strategic planning, business planning,
regional planning and planning of energy systems, is the author of Globalização (Editora Nobel, São
Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo,
1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do
desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,
http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel,
São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era
Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social
Development-The Case of the State of Bahia (VDM Verlag Dr. Muller Aktiengesellschaft & Co. KG,
Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (P&A Gráfica e Editora,
Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global
(Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011) and Os Fatores Condicionantes do
Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), among others.