Between 1999 and 2003, the contribution of Brazilian capitals to the GDP (Gross Domestic Product) of the country decreased. The opposite happened to municipalities located out of major urban centers, with relevant participation in the national economy.

Between 1999 and 2003, the contribution of Brazilian capitals to the GDP (Gross Domestic Product) of the country decreased. The opposite happened to municipalities located out of major urban centers, with relevant participation in the national economy. In 2003, this group of municipalities became the main source of almost half of all the wealth produced in Brazil that year (R$1.5 trillion). In the aforementioned period, capitals also started to hold a smaller fraction of production in the industry and services sectors. Even so, the Gross Domestic Product of Municipalities still indicates concentration: in 2003, only ten cities produced 25% of all the income in the country. Petroleum was one among the main subsectors contributing to the highest GDP per capita of municipalities; in agriculture, soybeans stimulated the economy in cities of the Central West, South and Northeast regions.

 

The GDP of Municipalities was calculated by state organizations, except in Tocantins, about which data were estimated by IBGE. This institution was also in charge of the discussions relative to methodology, training of technical staff and monitoring of the work. Data of 2003 are subject to change, which occurred before, in 2002. For the first time, public administration and services were analyzed separately. The group of 5560 municipalities used in 2001 was maintained. Complete methodological notes are available on the IBGE web site (

www.ibge.gov.br)

 

The exploration and production of petroleum, agriculture and fiscal incentives, which caused several industrial companies to move to interior parts of the country, were the main influences to the increase (3.7%) of the contribution of the group of municipalities located out of the major urban centers (that is, out of capitals and their metropolitan areas) to national GDP between 1999 and 2003.

In 1999 capitals accounted for 32% of the Brazilian GDP, and this amount was reduced to 28% in 2003. The remaining municipalities inside the metropolitan areas kept their level of participation constant along the series (about 22%). There was increase of participation of cities not located in the metropolitan areas (out of urban centers) , a change from 46% in 1999, to 49.7% in 2003.

What is the scope of influence of municipal economy?

The major inner cities in terms of contribution to GDP are located in the Southeast region: Campos dos Goytacazes (RJ), Macaé (RJ), São José dos Campos (SP), Uberlândia (MG) and Sorocaba (SP).

Campos dos Goytacazes and Macaé make up approximately 2% of national GDP and 16.2% of state (Rio de Janeiro) GDP. Their main activity is extraction industry (petroleum).

São José dos Campos accounts for 0.9% of Brazilian GDP and for 2.8% of GDP in the state of São Paulo; the industrial activity in this city is concentrated in subsectors of high technological intensity, such as aeronautic, car and chemical industry. There is yet a refinery which, due to the rise of petroleum prices, associated with stagnation of industrial sectors, obtained great industrial value added in the state.

Uberlândia, located in an area known as "the Minas Triangle", makes up about 0.5% of national GDP and 5.2% of GDP in the state of Minas Gerais. In the services sector, important activities are retail and wholesale trade, communication and universities. There is still a diversity of industrial activities: industries of biotechnology and development of seeds for agriculture, food, cigarettes and agroindustry in general. The highlights in agriculture are poultry, cattle and swine keeping, and also production of soybeans, oranges and corn.

Sorocaba, on the other hand, accounts for about 0.5% of national GDP and 1.5% of the GDP of São Paulo, since this state has been industrialized for longer than the others (weaving centers and the first siderurgical company in Brazil). It has a strong and developed industry and a developed services network.

South Region

 

Caxias do Sul (RS), Joinville (SC), Londrina (PR), Foz do Iguaçu (PR), Rio Grande (RS) are the municipalities whose GDP figures were the highlights in the South of Brazil.

Caxias do Sul, the third biggest city in Rio Grande do Sul, is an area of metal-mechanic industries. The highlights in this city are the activities of manufacturing of tractors, motorcycles, car bodies and pieces of vehicles. It also holds a position as second major agricultural producer in Rio Grande do Sul.

The highlight in Londrina was services, especially those related to trade. The industrial activity in the area is based on construction and manufacturing industry. Foz do Iguaçu is another of the main municipalities in the state, with its production concentrated in the generation of energy. Services is another important sector in the city, due to tourism.

Joinville is part of the metal-mechanics industrial area in the state of Santa Catarina and the highest GDP in the state. Its main economical activity is industry (manufacturing of machines and equipment).

The municipality of Rio Grande became more prominent due to the industrial development above average of Rio Grande do Sul. It’s the main harbor town in the state, where the highlights are production of mineral oils, petroleum refining and production of fertilizers.

Northeast Region

 

Feira de Santana (BA) has the second biggest sector of trade in the state. It also has an important industrial park for the subsectors of chemical products, electric and transportation material, food products, household appliances, footwear, apparel and metallurgy. Ilhéus, another city in the same state, has a significant industrial activity, especially in the parks for manufacturing of computer-related items (with an assembly line for computer production) and clothes. The city also has an important sector of trade and services, since it owns the third port in the state. Tourism is also developed.

The second biggest municipality of Paraíba, Campina Grande has become an important center for commerce, services and lodging in the state. In 2003, the industrial sector had good performance, especially in the following subsectors: non-metallic minerals, food products, chemical products, apparel, footwear and leather articles. It also has a state and a federal university.

Petrolina (PE) has its economy concentrated in agriculture, with irrigated fruitculture as the main highlight. It’s the biggest producer of mangos and guavas in the country; the second biggest producer of grapes, the third of coconut and the tenth of bananas. Other highlights are commerce of food products and civil construction industry. For all these reasons, Petrolina is considered a development area in the country, having influencing the economy in the whole state.

In the Northeast, the highlight is Canindé de São Francisco (SE), with a hydroelectric plant, which generates and distributes energy to other states of this region.

North Region

In the North, the highlights are Barcarena (PA), Tucuruí (PA), Coari (AM), Parauapebas (PA) and Marabá (PA).

In Barcarena, the subsectors of metallurgy and chemical products stand out. The municipality has huge industrial plants producing aluminum and its derivatives. The mineral activity is also very relevant in the other municipalities in Paraná. Marabá has a great number of mineral-metallurgical industries. Paraupebas is a producer of hematite. In Tucuruí there is a hydroelectric plant, the major generator of energy in Pará and the second most important in Brazil.

Coari is the main petroleum producer in Amazonas, providing petroleum and gas.

Central West Region

 

Dourados, the second biggest city in Mato Grosso do Sul, features as an industrial and agricultural area, being its highlights the industry of food products (expansion of the subsectors swine raising, cold storage and poultry keeping) and the production of grains (especially corn and soybeans).

Rondonópolis (MT) has in trade and manufacturing industry (especially of food products ) its main activities.

Anápolis (GO) accounts for 5.8% of the state GDP and concentrates major commercial distribution centers and pharmaceutical industries, with the production of generic medicines as the main highlight. The city also has places for secondary and higher education.

In Rio Verde (GO), the three subsectors of economic activity (agriculture, industry and services) have relevant participation in the economy. In this city can be found one of the major agricultural complexes in Brazil and also the Technology Platform of the Southwest, which has the aim of increasing competitivity of agribusiness in the region.

Finally, in Catalão (GO), the highlights are the mineral-chemical and the petrochemical area. The implementation of important industrial enterprises in the city was favored by its location (close to the Minas Triangle, Goiânia and Brasília).

Northern capitals increased participation in GDP between 1999 and 2003

In the division by group of capitals by major region, the South, Southeast and Central West (except the Federal District) had their participation in national GDP reduced between 1999 and 2003, whereas the major gains were in the capitals of the North region. In the Northeast, the participation of Fortaleza (CE), Recife (PE) and Salvador (BA) decreased. Manaus (AM) had the highest gain in percent participation, and São Paulo, despite having the highest GDP among Brazilian municipalities, had the biggest percent fall.

In 2003, Palmas (TO) was in the last position in the ranking of participation of capitals in the national revenue. In relation to the GDP of the state they belong to, the only two capitals which did not occupy the first position that year were Salvador (BA) and Florianópolis (SC). In Bahia, the municipality of Camaçari, was number one in the ranking for the first time in the series, due to the good performance of the petroleum sector and to the opening of a big car assembling plant. In Santa Catarina, Joinville has been the municipality with highest GDP since 1999.

Comparing the capitals between 2002 and 2003, it is observed that the first seven positions are maintained. It is worth mentioning that Fortaleza (CE) recovered two positions in the ranking of GDP of capitals, going from the tenth position in 2002 (0.7%) to the 8^th in 2003 (0.8%). With these results it surpassed Recife (PE) and Salvador (BA) and kept the highest GDP of the Northeast region. The percent growth is a consequence, mainly, of the investments in tourism. This gain is observed in relation to the GDP of the state: the municipality recoverd the level of participation observed until 2001, when it represented 45% of the economy of Ceará.

Between 2002 and 2003, Maceió (AL) also had important participation in GDP, going from the 17^th to the 14^th position in the ranking. This occurred mainly due to the activities of trade and tourism. On the other hand, Campo Grande (MS) was the municipality which fell more positions in relation to 2002, going from the 15^th to the 18^th place.

 

 

Comparison between 2003 and 1999 shows slight deconcentration of the generation of revenue

In 2003, 10 cities made up to 25% and with 70 cities, to 50% of the national GDP. In the same year, 1,289 municipalities accounted for 1%. These figures indicate concentration of the generation of revenue, but, when compared to the figures of 1991, this distribution indicates slight deconcentration. That year only 7 municipalities made up to 25% of GDP and 61 cities accounted for half of the income.

The ten municipalities which accounted for 25% of GDP were: São Paulo (SP), Rio de Janeiro (RJ), Brasília (DF), Manaus (AM), Belo Horizonte (MG), Campos dos Goytacazes (RJ), Guarulhos (SP), Curitiba (PR), Duque de Caxias (RJ) and Porto Alegre (RS).

Two cities should be mentioned for having reached better positions in the series: Campos dos Goytacazes (RJ) and Duque de Caxias (RJ). Campos dos Goytacazes had its percent participation increased mainly because of petroleum; Duque de Caxias is the main producing area of petroleum derivatives in the state and also benefited from the rise of prices in 2003.

The municipalities with lowest GDP figures in 2003 were, in decreasing order, Francisco Macedo (PI), Oliveira de Fátima (TO), Santo Antônio dos Milagres (PI), São Miguel da Baixa Grande (PI) e São Félix do Tocantins (TO). The revenue generated by these states represents approximately 0.001% of the total in the country. In the North region, the 30 municipalities with the lowest GDP are located in Tocantins; in the Northeast, they are in the states of Piauí, Rio Grande do Norte and Paraíba; in the Southeast region, in Minas Gerais. All the states in the South region have municipalities among those with lowest GDP figures in the area. In the Central West, Mato Grosso is the only state which does not have any city in this group.

The analysis of gains and losses in contribution to the GDP of 2003 in relation to 1999 was done considering municipalities with at least 0.5% of GDP, that is, 25 cities accounting for 35.1% of the GDP in the country. The ones escalating more positions in the ranking were: Campos dos Goytacazes (RJ), Macaé (RJ), Paulínia (SP), Camaçari (BA), Duque de Caxias (RJ) and Manaus (AM). The increase of percent participation of these municipalities is related to the expansion of the industrial sector of petroleum extraction and refining.

On the other hand, the cities which had the major losses in participation were the capitals: São Paulo (SP), Rio de Janeiro (RJ), Curitiba (PR), Salvador (BA) e Porto Alegre (RS).

 

In terms of distribution of municipal GDP, the state of Amazonas presented the highest level of concentration of income in the country. In 2003, the five major municipalities in the state accounted for 90.7% of the state GDP. In second place was Amapá, where this figure was 90%. On the other hand, Rio Grande do Sul and Santa Catarina had five municipalities which made up 29% of the state GDP.

Created in 2001, Luís Eduardo Magalhães holds 1.2% of Bahia’s GDP

Among the 53 municipalities created in 2001, Luís Eduardo Magalhães (BA) had, in 2003, the major participation in the national GDP (0.06%) and also in the state revenue (1.2% of GDP in Bahia). It was also the new city that most increased its contribution to GDP between 2001 and 2003, stimulated by the production of soybeans and an important park of food industry.

Agriculture (soybeans and corn) also was, in 2003, the main economic activity of Santo Antonio do Leste and Santa Rita do Trivelato, new municipalities which most contributed to GDP in the state of Mato Grosso. In general, the 53 new municipalities accounted, in 2001, for 0.17% and in 2003, for 0.22% of GDP in Brazil. In 2003, these new cities had 0.20% of the overall population.

Strong industrial activity and reduced population stimulate growth of municipal GDP per capita [1]

In 2003, the municipalities with the ten highest figures for GDP per capita in Brazil were São Francisco do Conde (BA), Triunfo (RS), Quissamã (RJ), Paulínia (SP), Carapebus (RJ), Rio das Ostras (RJ), Porto Real (RJ), Armação dos Búzios (RJ), Cascalho Rico (MG) and Macaé (RJ). The first three ones have remained in this condition since 2000.

In São Francisco do Conde there is a refinery which had its plant area expanded in 1999. Triunfo hosts an important petrochemical plant and has low population density. Quissamã, Carapebus, Rio das Ostras, Armação dos Búzios and Macaé are in better positions in the ranking due to royalties from petroleum and natural gas. All these cities, except Macaé, have low population density. In Porto Real, which also has a small population, there has been expansion of car industry since 2001.In Paulínia is located the refinery with the biggest installed capacity of petroleum barrels in the country (360 thousand barrels a day). Cascalho Rico has the third biggest hydroelectric plant in Minas Gerais, which generates approximately 10% of the state energy, and one industrial unit for cooling, preparation and production of milk and its derivatives. It also has low population density.

The lowest GDP per capita in the country is that of Bacuri (MA): R$ 697.04. Among the cities with the 100 lowest figures for GDP per capita, 73 are in Maranhão; 10 in Piauí; 6 in Bahia; 5 in Alagoas; 4 in Pará and 2 in Tocantins.

Among the capitals, Vitória thas the highest GDP per capita, followed by  Brasília, Manaus, São Paulo, Rio de Janeiro and Porto Alegre. Vitória and Brasília have kept the same position along the series. 

Soybeans causes increase of the participation of municipalities in agriculture

Agricultural activity is the least concentrated in the country – Gini [2] index = 0.63. The highest concentration was observed in Rio Grande do Norte (0.79), due to the development of irrigated fruitculture, which requires large areas and high investments in technology. In 2003, 170 municipalities aggregated 25% of value added of agriculture in Brazil, a figure which remained practically the same as in 2002, when 164 cities totaled the same percentage.

The dispersion of figures for agriculture can be seen in the Table below, which shows the seventeen municipalities with highest figures for value added in this activity. Together, they accounted for approximately 5% of the total in 2003.

Itápolis (SP)is the leader of the ranking, with oranges (about 70% of value added of agriculture in the city) and sugar cane; Toledo (PR) has its economy mostly based on the slaughtering of poultry and swine and on the production of soybeans.Petrolina (PE) is an important fruit producer. Sorriso (MT) is the highlight in terms of production of soybeans, rice and cotton. Casa Branca and Itapetininga (both in SP) are orange producers; the former has potatoes as its main product. The economy of Bastos (SP) is based on poultry keeping; the city is an important egg producer. Rio Verde (GO) plants soybeans and is also holds a relevant position in the segment of livestock. Tambaú and Bebedouro are orange producers. The agricultural activity of Cascavel (PR) and Jataí is based on soybeans and corn.

Considering the municipalities which account for at least 0.1% of value added of agriculture, the ones presenting most gain in terms of participation in the series 1999/2003 were Sorriso (MT) (0.17%), Tapurah (MT) (0.14%), São Desidério (BA) (0.11%), Sapezal (MT) (0.10%) and Tupanciretã (RS) (0.10%). The results were obtained, in general, because of soybeans. In the same analysis, considering the period 2002-2003, the major highlights were Santarém (PA) (0.09%), Tupanciretã (RS) (0.08%), Bastos (SP) (0.08%), Palmeira das Missões (RS) (0.07%) and Sorriso (MT) (0.07%). The main responsible for the increase of the percent participation of municipalities in Rio Grande do Sul were soybeans and wheat.

Camaçari (BA) and São Bernardo do Campo (SP) are on the top of the industrial ranking

The industrial activity presents the highest concentration – Gini index = 0.92. In 2003, with only nine municipalities, it made up 25% of value added of industry – and in 2002 the percentage was reached in eight cities. In 2003, with 50 municipalities, it reached half of the added value of industry, and 3004 cities accounted for only 1% of this figure.

In 2003, São Paulo (SP) remained as the main industrial area in the country, in spite of having lost its percent participation in comparison with 2002. Camaçari (BA) and São Bernardo do Campo (SP) became part of the group of municipalities which aggregated 25% of the industrial value added in the country. São Bernardo do Campo with the car and car pieces subsectors, surpasses Guarulhos (SP), placed in the fourth position in the state of São Paulo.

Analyzing the municipalities which account for at least 0.5% of industrial value added in 2003, it can be observed that the ones with most gain in percent participation in the series had petroleum as relevant item. In the period 2002-2003, Paulínia (0,6%), Camaçari (0,3%), Sorocaba (0,3%), São Bernardo do Campo (0,3%) and Cubatão (0,2%) were the ones with major participation in the country.

The municipalities with major decreases in participation in the series were São Paulo (-1.7%) and Rio de Janeiro (-1.5%). In the state of Rio de Janeiro, the cities located out of the metropolitan area of the capital escalated positions in the ranking, being Campos dos Goytacazes (9%) e Macaé (8,5%) the main highlights. In São Paulo, the same happened to Paulínia (1.9%), São Bernardo do Campo (0.8%), Cubatão (0.7%), São Caetano do Sul (0.7%) and Jaguariúna (0.6%).

Just like what occurred to GDP figures in general, the participation of Brazilian capitals in industrial added value along the series changed from 27%, in 1999, to 23%, in 2003. The municipalities located out of the metropolitan areas were the ones with major gain (from 46% to 49%). Palmas (TO) had the major industrial growth among the capitals due to construction between 1999 and 2003.

Capitals are less important in terms of services too

The value added of services behaves similarly to GDP – Gini index = 0.85 in 2003. The highest (0.87) and the lowest (0.63) Gini indexes by Federative Unit were registered in São Paulo and Rondônia, respectively.

Along the series, there was change in municipalities which aggregate up to 25% of value added of services, with loss of relative participation of São Paulo and Rio de Janeiro and Brasília as a new state in this group. In 2003, a total of 43 municipalities reached half of the value added of services. In the same year, 1.186 municipalities accounted for 1% of the overall figure of this economic activity. In that year, among the 43 municipalities aggregating 50% of value added of services, there were 18 capitals.

Nevertheless, the decrease of participation of capitals is also observed in relation to services, with decrease from 39.6% to 38.7% in the series. The municipalities which most increased their participation between 1999 and 2003 were Brasília, Duque de Caxias and Osasco (SP); the opposite happened in São Paulo and Rio de Janeiro.

In almost half of the cities, 25% of GDP comes from Public Administration

In 2003, the value added of public administration, defense and social security was less evenly distributed than that of agriculture, but when compared to the total of industry and services, it was less concentrated – Gini index = 0.77. The highest Gini index is in the state of São Paulo, of highest concentration; and the lowest is 0.56, in Rondônia, Maranhão and Bahia.

It is important to mention the relevance of public administration in the North and Northeast regions of the country, as well as in the North of Minas Gerais. In general, cities with low GDP are more dependent on public administration to their generation of income.

Among the 5560 Brazilian municipalities, 1,737 (31%) have more than 35% of their economy dependent on public administration, and 2,603 cities (47%) have over 25%. Public administration contributes with more than 50% in almost all the municipalities of Roraima, except the capital (46%). In one of the cities, Uiramutã (RR) the figure is 80% in all the series. It is worth mentioning that value added of public administration of GDP in Brazil, in 2003, was 15%.

Public revenue plays an important role in the economies of Amapá and in the Northeast, except in Maranhão and Bahia. The cities of Paraná, Santa Catarina, Rio Grande do Sul and Mato Grosso do Sul are the ones which most depend on the government. In these states, the relevance of public administration in 70% of municipalities is inferior to 15%. The table below shows the 21 municipalities with participation of public administration in GDP over 70%.

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[1] The Gross Domestic Product per capita of each municipality is estimated by calculating the ratio between the GDP figure and the dwelling population, using as reference the first of July of each year. It is worth mentioning, however, that not all the revenue generated within municipal area serves the dwelling population.

[2] Measure of the level of concentration of distribution, which ranges from zero (perfect equality) to one (maximum inequality).

[3] Public administration, defense and social security included in the value added of services.