Full report

Press release

This report proposes policies that can act as drivers of the Brazilian Northeast's economic and social convergence. The answers to the Northeast's challenges are not solely within the control of its own policymakers. Indeed, many of the issues identified for the region are Brazil-wide.

The Northeast can do more to increase the skills and the mobility of its labor force. Expanding education and vocational training programs, particularly for low-income and informal sector workers, can help address the region's persisting skills gaps and enhance access to opportunities within the region and outside of it. Improving labor market intermediation services and fostering partnerships between the public and private sectors would also help workers find jobs within and beyond their local markets, increasing opportunities for upward mobility.

Finally, it is time for the region to rethink the way it finances and governs its infrastructure. While there is room for reforms to expand the fiscal space for investment, the region's limited fiscal capacity means that it cannot rely solely on increased public spending to close its infrastructure gap. Instead, it also needs to aim at reducing inefficiencies and misallocation of capital spending by: (i) prioritizing investments that increase connectivity and maximize forward and backward linkages; (ii) adopting a modern public investment management system that reduces misallocation and improves coordination; and (iii) attracting private investment through well-governed public-private partnerships (PPP).