measures and is now less able to collect revenue through the sectorial funds, since company profits are down in many quarters. Industrial output declined by 2.8% between November and December 2014 and by 3.2% over the entire year. The most recent data indicate that 2014–2015 may turn out to be the worst years in decades for industry, especially for the transformation subsector of the manufacturing industry’. The economic slowdown was triggered by weaker international commodities markets, coupled with the perverse effects of economic policies designed to fuel consumption. For instance, Petrobrás artificially depressed petrol prices to control inflation between 2011 and 2014, under the influence of the government, its major stockholder. This in turn depressed ethanol prices, making ethanol uneconomic to produce. The ethanol industry was forced to close plants and cut back on its investment in research. Petrobrás’ low pricing policy ended up eating into its own revenue, forcing it to cut back its own investment in oil and gas exploration. The roots of the problem go deeper, though, than the current recession. Brazil's long-standing import substitution policy has protected locally produced goods from foreign competition, discouraging local businesses from investing heavily in research and development, as they are only competing with similar non-innovative companies operating within the same protectionist system. The consequence of this policy has been a gradual decline in Brazil's share of global trade in recent decades, especially when it comes to exports of industrial goods. The trend has even accelerated in the past few years. Between 2004 and 2013, the share of exports dropped from 14.6% to 10.8% of GDP, despite the commodities boom, a trend that cannot be explained solely by the unfavourable exchange rate’, asserts the report. Basic commodities make up a growing proportion of Brazilian exports. Commodities peaked at 50.8% of all exports in the first half of 2014, up from 29.3% in 2005. Just one-third of goods (34.5%) were manufactured in 2014, a sharp drop from 55.1% in 2005. Within manufactured exports, only 6.8% could be considered high-tech, compared to 41.0% with a low-tech content (up from 36.8% in 2012). Another factor in the drop in investment is that modern industrial development in Brazil is constrained by a lack of modern infrastructure, especially in logistics and electric power generation, along with cumbersome regulations relating to business registration, taxation or bankruptcy, all resulting in a high cost of doing business. Dubbed the