With 80% of its 54 million inhabitants made up of young people and people of working age, the Northeast of Brazil can play a fundamental role in the country’s progress. The assessment is contained in the World Bank report Routes to the Northeast: Productivity, Jobs and Inclusionreleased at the beginning of the month. 
In the World Bank’s assessment, the region has the potential to increase job creation and reduce inequality in relation to richer regions of the country if it focuses on growing industries, such as manufacturing and services, to offer better quality jobs, in addition to boosting investments in infrastructure through public-private partnerships.
According to the report, the Northeast has presented, in recent years, important advances in human capital, with increases in education especially among young people. However, the region faces obstacles in converting these results into improvements in work and income. In the region, the share of workers with a university degree increased from 9.1% in 2012 to 17% in 2023.
Despite the growth in worker qualifications, job creation, seen as the safest way out of poverty, faces difficulties, especially related to unemployment rates and informality. Between 2012 and 2022, the unemployment rate was 12% and informality was 52%, higher percentages than in other regions of Brazil.
On the other hand, the document highlights that The region also drives Brazil’s energy transition, producing 91% of the country’s wind energy and 42% of solar energy. In the World Bank’s assessment, this gives the region the opportunity to promote faster and more sustainable industrial growth and seize opportunities in emerging sectors, such as green hydrogen.
“Human capital and the abundance of natural resources, if effectively leveraged through faster growth and the generation of high-quality jobs, can transform the Northeast into a dynamic engine for Brazil’s future development, abandoning, once and for all, its historical legacy as an outdated region,” says the document.
Improving labor intermediation systems to connect people to vacancies, focusing on growing industries, such as manufacturing and services, are highlighted as ways to offer better quality jobs.
The World Bank also proposes the creation of policies to support women and marginalized groups, making the labor market more inclusive. The female labor force participation rate in the Northeast is just 41%, compared to 52% in the rest of the country.
Furthermore, the document states that it is necessary to stimulate entrepreneurship and attract investments to give greater dynamism to the business environment. Recommendations include simplifying business opening procedures and administrative routines; promoting competition; and reducing dependence on tax subsidies which, according to the publication, tend to reduce productivity and concentrate markets.
Another highlighted point is to accelerate the modernization of infrastructure, which requires investments in highways, railways and digital networks; in addition to improvements in water and sanitation.
It will also be necessary to ensure careful planning and oversight for projects to have a positive impact. To help finance and execute major projects, the report encourages private sector participation through well-designed partnerships.
