This article analyzes the economy of Salvador, capital of the State of Bahia, Brazil, and proposes strategies to promote its development in the current moment.

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HOW TO PROMOTE THE ECONOMIC DEVELOPMENT OF SALVADOR
Fernando Alcoforado *
Salvador is a low-income regional metropolis with economic indicators well below the
metropolitan and metropolitan regions of South and Southeast Brazil. Salvador is the
Brazilian capital with greater unemployment and lower income. In the formation of the
GDP (Gross Domestic Product) of Salvador, agriculture contributes with 0.06%,
industry with 20.99% and services with 78.94%. It is perceived, therefore, that Salvador
is a predominantly city of services. Salvador's economy is undoubtedly a service
economy heavily supported by tourism, real estate and services of many different
natures. Salvador is, among the capitals of Brazil, the one with the lowest GDP per
capita and the lowest GDP growth rate.
The economic structure of Salvador, with a major role played by the services sector, has
a reflection on the occupational structure. The vast majority of the workforce is
employed in the commerce and services sector. In the industrial sector the civil
construction stands out. The distribution of the economically active population in the
Metropolitan Region of Salvador showed in 2011 the predominance of tertiary jobs
(75.6%) and the fragility of jobs in the primary sector (1.4%).
1- Salvador exchange with its area of influence
The IBGE study, Regiões de influência das cidades (Regions of influence of the cities),
available on the website
<http://www.ibge.gov.br/home/geociencias/geografia/regic.shtm> brought important
contribution to the understanding of the different forms of spatial organization of
Brazilian society over time. In the update made in 2007, the purpose of this publication
was to define the hierarchy of urban centers and delineate the regions of influence
associated with them from the federal and business management aspects and the
provision of equipment and services, in order to identify the points of the territory from
which decisions are taken and the command is exercised in a network of cities. To do
so, we used specific research data and, secondarily, data from other surveys also carried
out by the IBGE, as well as records from public agencies and private companies.
According to IBGE, Salvador's network of influence encompasses the states of Bahia
and Sergipe, dividing the command of part of the west of Bahia with Brasilia, and has
as centers: Aracaju, Feira de Santana, Ilhéus, Itabuna, Vitória da Conquista, Barreiras,
Petrolina, Juazeiro, Guanambi, Irece, Jacobina, Jequié, Paulo Afonso, Santo Antônio de
Jesus, Itabaiana, Eunápolis, Bom Jesus da Lapa, Brumado, Senhor do Bonfim,
Alagoinhas, Cruz das Almas, Itaberaba, Ribeira do Pombal and Valença. Salvador and
its network of influence account for 8.8% of the country's population and 4.9% of the
national GDP. Salvador accounts for 22.4% of the population and 44.0% of GDP in its
network of influence, with a per capita GDP of R$ 12.6 thousand.
2- Salvador exchange with the dynamic areas of the State of Bahia
The dynamic areas of Bahia's economy are the Macroregion of Salvador, the Coast,
including Salvador, and the regions under the influence of Juazeiro, Vitória da
Conquista, Irecê, Guanambi and Barreiras. The Macroregion of Salvador, which covers

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the municipalities of Salvador, Simões Filho, Camaçari, Lauro de Freitas and Feira de
Santana, concentrates 90% of Bahia's processing industry (chemical, metallurgical, food
and other sectors), which in turn , means 25.1% of state GDP. In terms of trade flows,
the region accounts for about 90% of exports to Mercosur, considering only the main
products and about 65% of total exports from Bahia. In addition, it is accentuated by the
presence of commercial and service support for the entire state and even for other
regions of the Northeast, whose set of activities offers about 60% of formal sector jobs
in the state.
The region called Coast, which covers the North Coast, South Coast and South End, and
also encompasses the Macroregion of Salvador, consists of a continuum of subspaces
with differentiated productions. This area, besides the industries of the Macroregion of
Salvador, contains all cocoa production (Southern Region), which accounts for just over
2% of Bahia's GDP, pulp and paper production (South End Region) and absorbs more
than 75% of the tourist flow of the State of Bahia (Region of Salvador, Porto Seguro
and Ilhéus), offering 83% of the beds in hotels. It has an infrastructure network that
does not resemble that of the Macroregion of Salvador. However, it is well above the
indices reached by the other dynamic regions of the State. All other dynamic areas of
the Bahian economy have their production based on activities related to agriculture and
livestock, albeit with diversified production.
The exchange of Salvador with its area of influence and with the dynamic areas of the
State of Bahia should consist of the production in Salvador of goods and services aimed
at meeting the demand of all the municipalities of the State of Bahia located in its area
of influence and in its areas dynamics. It would be important to determine the demand
for goods and services in the municipalities of the areas of influence of Salvador and the
dynamic areas of Bahia aiming to increase their production in Salvador.
3 - Tourism, the construction industry and the production of goods and services in
Salvador
Tourism in Salvador
Salvador and its surroundings have immense tourism potential that has attracted
international groups interested, above all, in the realization of investments in the area of
lodging / leisure equipment, building hotels, resorts and inn. Tourism in Bahia stands
out because this state is one of the main tourist centers of the country. According to the
survey "Hábitos de Consumo do Turismo Brasileiro 2009" ("Habits of Consumption of
Brazilian Tourism 2009"), held by Vox Populi in November 2009, Bahia is the
preferred tourist destination of Brazilians.
The greater national penetration of Salvador in the business management happens in the
cultural area and in the tourism, this one very associated to the scenic beauties, the
history and the popular culture of Bahia. The Carnival of Salvador is the great highlight
for its important national and international repercussion. In national terms, Bahia has
the largest number of large Brazilian resorts located in the North Coast, under the direct
influence of Salvador.
Although it still needs many improvements, Salvador has a good hotel infrastructure in
general. Salvador International Airport is the fifth busiest in Brazil. From a global point

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of view, the tourism activity in Salvador has been developing with emphasis on
business tourism - stimulated by the new productive conformation (global value chains).
Salvador has a prominent role in the national tourism market, being the 3rd most visited
destination (and the 4th most desired) in domestic trips. Only 15% of trips to Salvador
are exclusively for leisure. The city of Salvador became the first in the cruise movement
between ports in the Northeast and the second in the country. The port of Salvador only
had a Terminal for Cruise Ships in December 2014.
Among the major tourist investments there is a set of projects and cultural and
environmental releases, in the limits of the old city, that explores its relation with the
sea, heading for the Baía de Todos os Santos (Bay of All Saints) that, in some way, has
attracted for this area housing developments for the high income segment.
Despite the tourism potential presented in the above paragraphs, since the end of 2014,
several small hotels have closed their doors in Salvador, according to a survey by the
Brazilian Hotel Industry Association in Bahia (ABIH-Ba). The Salvador Convention
Center was shut down due to problems in its metal structure that collapsed due to lack
of adequate maintenance. The port of Salvador is considered the worst port in Brazil
because it is completely unequipped, both for loading and unloading of goods and
passengers. The port of Salvador accumulates structural problems such as insufficient
depth to receive large vessels, allied to others such as the difficulty of road access and,
as regards freight transport, slow storage, lack of coverage for loading and unloading
trucks, among others.
The situation of tourism in Salvador is quite serious for reaching structures of the most
diverse sizes. Due to these factors, Salvador has been losing competitiveness in relation
to the most attractive tourist developments in the North Coast of the State of Bahia and
other cities in the Northeast of Brazil.
The construction industry in Salvador
After many years investing in the construction of high standard properties, for the high
and middle income segments, have seen a tendency in recent years to expand housing to
the middle income levels small closed condominiums and villages in neighborhoods
near the border of Salvador and in the neighboring municipality of Lauro de Freitas.
The offer, which until 2005 was characterized by the predominance of uni domiciliary
units in the peripheral areas, gives rise to apartment buildings for the middle class, with
the absolute predominance of the vertical multidomiciliar pattern occurring, either by
increasing the areas already occupied or by occupying the axis between Salvador and
the neighboring municipality of Lauro de Freitas in the form of large vertical
condominiums.
There is a great tendency of diffusion of shopping centers by the metropolitan space,
following the northern coastal vector, which represents indicator of the consolidation of
this vector and a stimulus to new housing developments. New ventures, directed to the
business sector, have sought new locations and new formats. The occupation of the
Atlantic Rim of Salvador by the groups of the big businessmen and executives of
companies happens in a practically continuous spot, limited to the West by the Parallel
Avenue, important road axis. The most important public and private facilities, modern
shopping and service centers, infrastructure networks - energy, sewage, water,

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telephony, garbage collection and road system - are concentrated in the spaces where
the "upper classes" are concentrated.
The prices of real estate are higher in the South region of the city, in the central area of
the city and on the Atlantic coast. These are also the areas most appreciated from 2012
to 2014, according to ADEMI-BA. Civil construction in Bahia, due to the housing
deficit and other factors, still has possibility to grow, especially if it works focused on
class C. In the State of Bahia and Salvador, the real estate sector expanded greatly from
2004 to 2008. Economic crisis that broke out in the United States in 2008 had
repercussions in Bahia and Salvador with the fall of releases in 2009, recovery in 2010
followed by decline until 2014. After peaking in December 2013, the price of real estate
in Salvador began to present decline.
Even before the outbreak of the crisis in 2014, the construction industry employed about
50,000 workers only in Salvador, thus being a labor-intensive sector. Survey of the
General Register of Employees and Unemployed (Caged-Ministry of Labor) indicates
that in only one year 7,000 jobs disappeared in the capital of Bahia, almost 13% of the
total wage bill. The losses are progressive because there are no new works beginnings.
The production of goods and services in Salvador
The Metropolitan Region of Salvador concentrates a robust productive park, capable of
agglutinating services of the most diverse natures. In the process of industrialization of
the RMS, the public administration gained more weight, the retail trade accelerated its
renewal, with the multiplication of shopping centers and supermarkets. On the other
hand, the services of collective consumption (notably education and health) and other
intermediary or final consumer services (engineering, transportation, and
telecommunications) have experienced significant development.
At the turn of the 20th century to the 21st century, a broad set of industrial and "tertiary"
activities created the conditions for the rapid expansion and diversification of business
services. Almeida (2008) states that, "when it comes to strategic services, those that
matter are not urbanization services, destined for final consumption and local demand. It
is necessary to insist on this point: what is strategically important for the Soteropolitan
metropolis are three types of services: 1) Business services, that is, intermediate
consumption services, which ensure an infrastructure capable of attracting and
maintaining investments, among which emphasize business-intensive, knowledge-
intensive services; 2) Leisure and business tourism, including two of its most dynamic
segments - cultural and event tourism; and, 3) Social services of collective
consumption, which can be increasingly exported to other regions of Bahia and even to
other states, especially in the areas of education (higher education) and health (medical
pole). These are the sectors of the new economy of services that can lead Salvador,
which is already one of the two largest metropolises in the Northeast, from being a
tertiary center to being a national exporter of superior services, culture and knowledge;
to the condition of a quaternary metropolitan economy, based on the management and
diffusion of information and the generation of knowledge, which can expand its area of
hegemony in the Northeast and even other regions of the country.
4- Strategies for the economic development of Salvador
In order to develop the economy of Salvador, it is necessary to increase the economic
activity of the municipality by encouraging the export of goods and services to the

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municipalities of Bahia and other regions of Brazil and the production in Salvador of
goods and services now imported from other parts of Brazil and from abroad to raise
GDP, reduce the unemployment rate and raise the income level of Salvador's
population. In addition, the development of the small urban food industry, construction
materials, residential construction, furniture, printing and the expansion of personal
services, real estate services, neighborhood retailing, and trade in building materials.
It is also necessary to increase tourism by making efforts to attract international groups
interested in investing in the area of lodging / leisure facilities, construction of hotels,
resorts and hostels in Salvador, to publicize widely in Brazil and abroad the Carnival of
Salvador to attract the maximum of tourists and make efforts to make the tourism
enterprises located in Salvador more attractive than those existing in the North Coast of
Bahia. It is also necessary to encourage real estate expansion in Salvador with the
concession of fiscal incentives for those who build and credit for the buyer of the
properties, to promote the agglutination in Salvador of services of the most diverse
natures to serve the Metropolitan Region of Salvador, where it concentrates a robust
productive park and the dynamic areas of the State of Bahia.
In addition, it is fundamental to increase the "Business services" in Salvador, that is,
intermediary consumer services, which ensure an infrastructure capable of attracting
and maintaining investments, among which are corporate services, knowledge intensive,
Leisure Tourism and business, including two of its most dynamic segments - cultural
and event tourism; and Social Services of collective consumption, which can be
increasingly exported to other regions of Bahia and even to other states, especially in
the areas of education (higher education) and health (medical pole) to constitute the
backbone of the economy in the 21st century.
These are the initiatives that should be taken forward to promote the development of
Salvador's economy at the present time.
BIBLIOGRAPHY
ALMEIDA, Paulo Henrique. A economia de Salvador e a formação de sua Região
Metropolitana. Available on website <http://books.scielo.org/id/36d/pdf/carvalho-
9788523209094-02.pdf>, 2008.
BEAUJEU-GARNIER. J. Geografia Urbana. Lisboa: Fundação Calouste Gulbenkian, 1980.
CARVALHO, Cesar Vaz, CARVALHO, Ilce Maria e GÓES, Thiago Reis Marques.
Dinâmica econômica e socioespacial da metrópole baiana em uma economia globalizada.
SEI. Available on website
<http://www.sei.ba.gov.br/images/publicacoes/download/textos_discussao/texto_discussao_0
1.pdf>.
FIPE. Estudos Econômicos Caracterização Atual. Audiência pública. 2015.
IBGE. Regiões de Influência das Cidades – 2007. Available on website
<http://www.ibge.gov.br/home/geociencias/geografia/regic.shtm>.

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MELLO e SILVA et all. A região metropolitana de Salvador na rede urbana brasileira e sua
configuração interna. Available on website <http://www.ub.edu/geocrit/sn/sn-479.htm>,
2014.
PORTO, Edgard; CARVALHO, Edmilson. A espacialização da economia baiana, o
Mercosul e outras regiões. In: SEI: A Bahia no Mercosul. Salvador, 1996.
SEMOB. Plano de Mobilidade Urbana de Salvador. Available on website
<http://www.sucom.ba.gov.br/wp-
content/uploads/2015/09/Plano_Mobilidade_Apresentacao.pdf>.
* Fernando Alcoforado, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning
and Regional Development at the University of Barcelona, university professor and consultant in the areas of
strategic planning, business planning, regional planning and energy systems planning, former Secretary of
Salvador (1986/1987) and former Undersecretary of Energy of the State of Bahia (1987/1991), author of the
Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC (Editora Nobel, São Paulo, 1998), Um Projeto
para o Brasil (Editora Nobel, São Paulo, 2000), Os Condicionantes de Desenvolvimento do Estado da Bahia
(PhD Thesis, University of Barcelona, http: //www.tesisenred.net/handle/10803/1944, 2003), Globalização e
Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento da Bahia 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. Müller Aktiengesellschaft
& Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e
Gráfica, Santa Cruz do Rio Pardo, São Paulo, 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), Os
Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no
Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As
Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016) e
A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017).
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