2 April 2021
The size of the "chaebol" and their broad diversification into diversified products have been allowed to survive the hardships of late industrialization, to penetrate the lower end of numerous foreign markets, and to supplant the need for multinational firms to undertake major investments in targeted industries. [...] Starting in March of 1990, the process of trade liberalization involved the immediate removal of explicit non-tariff barriers and the announcement of a time-bound decrease in the level and dispersion of tariffs. [...] The ability of Brazilian firms to face the challenge of recession and liberalization of imports, in the early 1990s, is a reflection of producers’ commitment to cost- reducing and quality-enhancing measures. [...] The recession and the liberalization of imports led them (1) to the vertical disintegration of activities as firms subcontracted, (2) to the reduction of hierarchical levels in an attempt to improve intrafirm communication among employees, and between them and management, and (3) to the introduction of "kaizen" (continuous improvement), quality circles, just-in-time and other techniques of total q. [...] The fiscal cost of state and municipalities subsidies has not yet been so far estimated with any degree of precision, although the amount of revenue foregone is a source of concern to the federal government in view of the dire fiscal health of most states.