A balancing act for Brazil’s Amazonian states: an economic memorandum

The report explores how a recalibrated development approach can achieve these goals. In the shorter term, there is an urgent need to halt deforestation a massive destruction of natural wealth that poses risks to the climate and economy. Amazonia is Brazil’s deforestation hot spot, and the Amazon rainforest is approaching tipping points into broad and permanent forest loss. Reversing the recent increase in deforestation requires stronger land and forest governance, including land regularization and more effective law enforcement. In the longer term, both Brazil and Amazonia need a new growth model. This model would be anchored in productivity rather than resource extraction and it would diversify the export basket beyond commodities. A more balanced structural transformation requires the lagging urban sectors, such as manufacturing and services, to step up to promote economic growth, reduce pressure on the agricultural frontier, and generate jobs for Brazil and Amazonia’s largely urban populations.