Abstract

Modern industrialization in the Brazilian periphery had its pre-conditions established in Bahia in the 1950’s (the Paulo Afonso hydro-electric plant on the São Francisco River, the extraction and refinement of oil near the state capital — Salvador, and highway connections with the Brazilian Center-South). The State, therefore, assumed relatively early an active role on the regional level. Meanwhile, the resulting flow of money in Salvador accentuated the traditional importance of commerce and banking, reinforced since the seventies by major public works and the building of a petrochemical complex. In Pernambuco, in contrast, the “new industry” promoted by recent governmental incentives has found an old industrial experience and produced a more diversified and less capital-intensivo activity. As a result, Recife presents maybe a more pluralistic structure, but lower levels of income and consumption than Salvador. The article calls attention to the importance of the banking sector in Bahia, which Is behind the failure of early industrialization, while contemporarily it is critical in the region’s articulation with supra-regional processes.