Rio de Janeiro - Economy and Infrastructure

More than other States, the economy of Rio today is related to historic events, for the city was for a long time the capital of Brazil. Until the end of the 19th century, Rio was the richest State of Brazil (position occupied today by São Paulo). To better understand the Economy, read more about the History of Rio.

Primary Sector.The main product of Rio is sugar cane, with large plantations in the area of Campos. Oranges, produced in Itaborai, are also relevant. Coffee, which was introduced in Rio before moving to São Paulo, saw a rapid decline in Rio, which hadn´t the same agility as São Paulo to cope with the eroded soils and the Slavery abolition. Several other cultures (rice, maioc, beans, potatoes, pineapples) are scattered throughout the State, but mostly for local and regional consumption.
The areas along the river Paraíba do Sul see a concentration of livestock farms; animals are used for production of milk and dairy. There are chicken and egg farms in several cities.
The fishing sector is relevant in Rio, particularly the capture and processing of sardines. The State has the largest naval industry in Brazil, as well as a good portuary structure.

Industry. Rio de Janeiro finished the 20th century as the second most industrialized State of Brazil (the position is currently being claimed by Minas Gerais).
The industrialization of Rio, however, is recent. The city prospered much with the production of gold in Minas during the 18th and 19th centuries (see History of Minas Gerais), but the influx of money was translated much more in buldings and urbanization than in industries. Only by the end of the 19th century did the State see the first large industries: wheat mills in Rio and Niteroi and textile industries which used the waterfalls power of Petropolis and Nova Friburgo.
The first decades of the 1900s were dominated by São Paulo and Minas Gerais, which benefited from the coffee revenues; economic decisions were focused primarily on those two States.
In the 1940s, when dictator Getulio Vargas had broken the Minas-São Paulo domination, the economy of Rio had a large boost. With financial support from Americans and British, who were interested in having Brazil as ally during the World War II, Vargas installed important industrial complex in Rio: the Companhia Sidergica Nacional (iron and steel), in Volta Redonda; the Companhia Nacional de Alcalis, in Cabo Frio; the Fabrica Nacional de Motores (engines), in Majé; a Petrobrás oil refinery, in Duque de Caxias.
In the 1960s, that infrastructure had already resulted in several smaller industries. With the opening of Via Dutra, between Rio and São Paulo, several industries were installed, aiming at the two largest consumer centers of Brazil.
Today, the most important industrial cluster is still in the capital and neighbourhood. However, many other cities have important industrial production: Niterói (metals, glass, processed fish), São Gonçalo (cement, glass), Itaboraí (cement), Duque de Caxias (oil refinery, chemicals, vehicles), Volta Redonda (steel), Resende (vehicles) and others.

Extrativism. Salt. Cabo Frio (the name means Cold Cape, a reference to the lower temperatures of the sea water) isn´t any more the largest producer of marine salt, as it once was (now, Rio Grande do Norte is the largest producer), but it´s still one of the major suppliers of salt to the markets of Rio and São Paulo.
Petroleum. The State of Rio is the largest producer of petroleum and gas in Brazil; all production comes from off shore fields. Despite a recent opening of the Brazilian market, giant Petrobras (the biggest Brazilian company) is still, by far, the largest producer. Most fields are off the coast of the city of Campos, but the most important Petrobras infrastructure is at the city of Macaé.
The first fields were explored in 1973. The basin of Campos is not only the most relevant producer, but also the one with the quickest growing, and where Petrobras makes most of their investments; Petrobras has developed a world acclaimed technology to explore areas in deep sea.
The economy of the State is benefited both from the taxation and royalties over the production, but also because many of the international corporations which have been coming to Brazil are opening offices in Rio.

Tourism. The city of Rio de Janeiro is the main gateway to Brazil. The combination of sea and mountains makes Rio one of the most beautiful cities in the world. Events like carnaval and new year´s eve attract multitudes every year.
Besides the capital, many cities have touristic potential. Angra dos Reis, Saquarema, Buzios and Cabo Frio are coastal cities, while Petropolis, Nova Friburgo and Vassouras are in the mountains.

State and city are aware of the importance of tourism to the economy. Some measures have been adopted to stimulate the industry, but the sector still relies much on private initiatives. There is very little divulgation of the city in international markets, and the number of tourists is way below the city potential, when compared to other destinations.

Infrastructure. Rio has roads to all neighbour States. Some roads (like Via Dutra, to São Paulo, and a stretch of the BR-101 which covers the Rio-Niteroi bridge) were chartered to private enterprises; the quality of the highways improved much, but was accompanied by a significant increase of the toll fees.
As a reminiscence of the Imperial times (Pedro II was an incentivator of rail roads), the city of Rio has the largest rail grid in Brazil. The trains are used both to long journeys (reaching Espirito Santo and Minas Gerais) and for urban transportation, used massively by the poor population.
The ports of Rio de Janeiro and Angra dos Reis are, respectively, the third and fourth in Brazil, as measured by volume of cargo. Sepetiba is used mostly to export minerals from Minas Gerais. Niterói has less cargo movimentation, but a high traffic of ships going for maintenance by the naval industry of the city.
There are two important airports in Rio. The International Airport Tom Jobim (named after one of the most famous Brazilian musicians), former Airport Galeão, handles international and long distance national flights; the Airport Santos Dumont (to Brazilians, Santos Dumont is the inventor of airplane) receives domestic flights, mostly from nearby cities like São Paulo and Belo Horizonte.
Energy. Rio is a large consumer of energy, but most of it comes from other States; there are a few hidroelectric plants in the State, like Nilo Peçanha and Pereira Passos, but none that ranks among the largest potentials. The city of Angra dos Reis is the only one in Brazil to have a nuclear plant; the project was started in the 1970s, in cooperation with the German government, and foresaw the building of three plants. After years of delays, and at a cost much higher than budgeted, only one unit is working, with frequent outages; check more about Angra I.


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