THE
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This site presents an analysis of the Brazilian government's economic policies compared to a list of 35 economic policies as prepared by student Klaisyon Borges De Paulo with the Mike P. McKeever Institute of Economic Policy Analysis (MIEPA). This study was written in December of 2019. To read the analyses scroll through this site. To learn more about the background policies, click here
To learn more about MIEPA, click here
The study by Specialist Klaisyon Borges De Paulo is presented immediately below.
BRAZIL - KLAISYON BORGES DE PAULO
This study presents a detailed study of the economic policies of Brazil, as written by Specialist Klaisyon Borges De Paulo. The ratings herein are based on the following rating scale:
RATING SCALE
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2019. Used herein with permission]
RATING SUMMARY - BRAZIL - KLAISYON BORGES DE PAULO
POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE
1 5.0 15.0 15.0 100 %
2 2.0 6.0 15.0 40
3 2.0 6.0 15.0 40
4 4.0 12.0 15.0 80
5 3.0 9.0 15.0 60
6 2.0 6.0 15.0 40
7 2.0 6.0 15.0 40
8 1.0 3.0 15.0 20
9 1.0 3.0 15.0 20
10 3.0 9.0 15.0 60
11 4.0 12.0 15.0 80
12 3.0 6.0 10.0 60
13 5.0 10.0 10.0 100
14 2.0 4.0 10.0 40
15 5.0 10.0 10.0 100
16 5.0 10.0 10.0 100
17 1.0 2.0 10.0 20
18 2.0 4.0 10.0 40
19 1.0 2.0 10.0 20
20 2.0 4.0 10.0 40
21 3.0 6.0 10.0 60
22 2.0 4.0 10.0 40
23 2.0 4.0 10.0 40
24 2.0 4.0 10.0 40
25 2.0 4.0 10.0 40
26 1.0 2.0 10.0 20
27 2.0 4.0 10.0 40
28 2.0 4.0 10.0 40
29 3.0 3.0 5.0 60
30 3.0 3.0 5.0 60
31 2.0 2.0 5.0 40
32 3.0 3.0 5.0 60
33 1.0 1.0 5.0 20
34 4.0 4.0 5.0 80
35 1.0 1.0 5.0 20
TOTAL 88.0 188.0 370.0 50.8%
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INDIVIDUAL POLICIES - BRAZIL - KLAISYON BORGES DE PAULO
1 – Freedom from Internal Control (5.0)
My score for this policy is 5.0 because there is no restriction for a citizen to move around the country, neither to join in a legitimate activity.
In the opposite of in the United States, in Brazil is the Federal Constitution that regulate the state law. If there is a law that goes against a legal principle of the constitution, it is considered unconstitutional and the state don’t have the right to self-regulate. It means that what works in one state, legally, also apply to any other state in the nation. It reduces the differences between the states, extending the possibilities for entrepreneurs nationwide.
Once it is legal, any citizen can migrate between any professional and business activities.
Sources:
1 - https://jus.com.br/artigos/48524/direito-comparado-na-pratica-eua-x-brasil.
2 - Personal.
2 – Freedom of Speech (2.0)
My score for this policy is 2.0 because the freedom of speech is a privilege disguised into a right. V In its article 5, clauses IV, VIII and IX of the Federal Constitution of 1988, it is assured the freedom of speech in Brazil. However, limited speech is what happens. As cited in the following policies, the federal government in Brazil has been from the left and socialist for the past years and therefore, we had our real democracy cloistered.
Whenever someone makes use of its freedom of speech, to go against the government for its corruption, bad governance or even for having opposite political beliefs, the constitutional right looks to be revoked. When going to public colleges, usually occupied by militants from the left, and expressing traditional or conservative opinions, verbal and physical aggression occurs. The fact is that unless you adequate yourself to a specific profile [being from the left, against religion, against capitalism, submissive to socialist governors, pro-Fidel Castro (who killed dozens of thousands of innocents) and condone to vandalism] you can not exercise your freedom of speech.
Although it is a legal right, the reality is different. For that, I give a score of 2.
Sources:
1 - http://www.planalto.gov.br/ccivil_03/constituicao/constituicao.htm;
2 - https://istoe.com.br/as-universidades-estao-tomadas-pela-esquerda/;
3 - https://www.miamiherald.com/news/nation-world/world/americas/cuba/article118282148.html;
4 - Personal.
3 – Effective, Fair Police Force (2.0)
My score for this policy is 2.0 because the failing judicial system and the poor investment in structure for the police force, make it weak and consequently creates a safety issue in Brazil.
The movie “Tropa de Elite” portrays faithfully the relation of police and society in Brazil. The system is failed. The police can not operate properly. There is a deficit in safety. According to IBGE (Brazilian Institute of Geography and Statistics), 76.9 million people declared to feel unsafe (which corresponds to 47,2% of the population). The study also shows that 7,3% of the population was a victim of robbery or burglary.
Fearing to either become part of the negative statistics, or to have it relapsed, people avoid starting a new business. Therefore, less jobs are created, and the economy is weakened.
Sources:
1 - https://www1.folha.uol.com.br/fsp/cotidian/ff1612201030.htm;
2 - Personal.
4 – Private Property (4.0)
My score for this policy is 4.0 because the right or private property is assured to citizens and non-citizens, but exceptions apply.
According to the Constitution of 1988, it is given the right of property to every individual who pursuit to obtain it through legitimate ways. Although, it is attached to its social function. It basically means that the government could intervene by taking the ownership through a “relevant public interest”. In other words, if the government believes that taking your property could beneficiate a public interest, they could revoke the right for the property. A public interest is directed linked with the government aims for the society, and it changes from one mandate to another. It shows that the right for a private property ownership is not 100% guaranteed, and because of the shifts in governance, it is also not stable. In reality it doesn’t happen very often, but just the fact that it can happen already take out the fullness of this right.
Another way to lose private property is through “Adverse Possession”, when someone can acquire legal ownership of a property based on continuous possession. So, if an owner of a property doesn’t reside in it, but someone else does, the individual who continuously lived for the legally established period of time, might request to take the legal ownership.
For the exceptions listed above, I give to this policy the score of 4.
Sources:
1 - https://www.mises.org.br/article/965/por-que-nao-existe-propriedade-privada-de-imoveis-no-brasil;
2 - https://www.epdonline.com.br/noticias/entenda-o-que-e-usucapiao-e-seus-requisitos/1432;
3 - Personal.
5 – Commercial Banks (3.0)
My score for this policy is 3.0 because the trust line between customer and banks is still modest, avoiding a more efficient operation.
In March 16th of 1990 happened the “Plano Color” (Color Plan). This plan confiscated the savings accounts in Brazil that have more than NCz$50.000 [(Cruzado Novo) Old Currency in Brazil], changed the currency to Cr$, (Cruzeiro Real) at a rate of NCz$1 = Cr$1, froze prices and salaries, and as a reflex, made public services more expensive.
The public reaction was to immediately cash their money out of the banks, creating massive lines. However, the banks didn’t have enough money to cover the withdrawals, so it was stipulated the limit of NCz$50,000. All this reform after another 3 in the 3 consecutive years before. This event raised the fear within Brazilians to trust their money in banks, expanding from customer to small business, slowing down the national development through the trust in commercial banks. As a result, less people deposited their money in banks, taking this money out of the market.
In addition to that, the interest rates imposed by banks for loans are considerably high. The lower fees are usually restricted to people with more money and “access” to the bank representatives, and quite often transactions are made through corrupt methods.
With less money in the market and high interest rates for loans, the activity of banks in the creation of small business (and consequently job creation), is still modest, and for that, I give the rate of 3.
Sources:
1 - https://www.todamateria.com.br/plano-collor/;
2 - https://www.bcb.gov.br/;
3 - Personal.
6 – Communication Systems (2.0)
My score for this policy is 2.0 because the communication system network in Brazil is good, but tendentious.
As anywhere else in the world, even in the most developed country might have a region where the access to information is limited. So it is in Brazil, especially in the North and Northeast. It is even protected right by the Law of Access to Information 12.527/2011. Unfortunately, the content of the information can be very tendentious.
Opinions disguised into news, non-proportional information covering, facts distortion and misleading terminologies are core characteristics of tendentious information vehicles as is said in the website Honest Reporting.
In Brazil the biggest and corrupted telecommunications vehicle is Globo. Involved in corrupt schemes, fed by the last federal governances, and often responsible for the vehiculation of manipulated information.
The access to information is quite good (internet, tv), but the content of it push the score for this policy to 2.
Sources:
1 - http://paineis.cgu.gov.br/lai/index.htm;
2- http://observatoriodaimprensa.com.br/edicao-brasileira-da-columbia-journalism-review/na-mira-da-midia/;
3 - https://honestreporting.com/as-oito-categorias-da-midia-tendenciosa/;
4 - Personal.
7 – Transportation (2.0)
My score for this policy is 2.0 because in Brazil we have road, rail, air and ship, but the quality is bad, and the quantity is low.
Roads are the predominant way to move in Brazil. The negative point is that depending on where you go, the roads are not paved. When it is, there are always potholes, especially right after a rain. The quality of the asphalt is bad, and when damaged, it takes too much time to fix, when they fix it. If you have a car, you will need a maintenance for it sooner than if you had the car in another country. If you rely on public transportation, unless you live in the city of Curitiba (famous for being good and efficient), chaos is what you find. Public transportation in Brazil is very expensive, crowded and limited. The traffic is also a negative point for being crowded and not efficiently organized.
Airfares are very expensive and for being the 5th biggest country in the world in territory, better rates would make it easier to move around the country.
There are in total 175 ports in Brazil, which is not bad. It feeds the national and international market with no problems.
The railroads were mostly killed to open space for roads. There are few exceptions such as the railroads from Curitiba – Morretes and Belo Horizonte – Vitória for recreation, and the railroad North-South that is being built to commercially connect the north of the country to the south.
Overall, the transportation system in Brazil needs an upgrade, especially for the roads, the biggest one.
Sources:
1- http://www.aboutbrasil.com/modules/brazil-brasil/travel_about_brazil.php?hoofd=1&sub=1&art=10;
2 - https://guia.melhoresdestinos.com.br/transportes-em-curitiba-185-2385-p.html;
3 - https://www.maioresemelhores.com/maiores-paises-do-mundo/;
4 - https://cbie.com.br/artigos/quantos-portos-temos-no-brasil/;
5 – Personal.
8 – Education (1.0)
My score for this policy is 1.0 because of the inefficient and disproportionate educational system.
When it is about the private system for basic education in Brazil, the reality is not that bad. The students from private institutions usually obtain the highest scores for their schools according to the IDEB (Index of Basic Education Development). The private schools usually offer better facilities, faculty and educating system, providing a good scenario and resources for the students to develop their academic skills.
On the other hand, the public system is bad. The public schools do not have a good structure, quality books, neither a well-prepared body of teachers. It is reflected in their performance in the same IDEB score above. Also, it becomes a barrier for them in their transition to the superior education, that to get admitted in a public university (and also in most private institutions), it is required to get an average score in the exam ENEM (National Exam of the High School).
When talking about superior education, Brazil is also negligent. The best ranked universities in Brazil are federal. The Federal government in Brazil was, for the last years, from the left and socialist. A huge amount of the professors in those universities, are political inclined to the left, and they make it clear through their lectures when they quite often manipulate the content to expose their opinions as a fact.
There is a project called “Escola Sem Partido” (School without party) that defends the idea of schools without political inclination for a better critic and impartial academic construction for the students. Despite the constant attacks from the left to this project, it has been getting stronger once that the students, and even the parents, are getting more informed about the reality, and knowing more about their rights. The new Federal government also defends an impartial education, which may corroborate to a change in our educational path and bring us hope to an improvement in this area that feeds the future generations.
Sources:
1 - http://portal.inep.gov.br/web/guest/inicio;
2 - https://brasilescola.uol.com.br/educacao/educacao-no-brasil.htm;
3 - https://www.revistaeducacao.com.br/cenario-da-educacao-basica-no-brasil-e-alarmante/;
4 - https://www.todamateria.com.br/educacao-no-brasil/
5 - http://escolasempartido.org/;
6 - Personal.
9 – Social Mobility (1.0)
My score for this policy is 1.0 because of the disparity of opportunities within the society.
In Brazil, opportunities are not equally distributed. Starting from the education, wealthier students tend to go to private schools in order to obtain a better apprenticeship, while the poor students usually go to public ones that are usually behind in the matter of structure and learning effectiveness. As a result, the public universities (free ones, and with a better status in the market), are quite often fulfilled by wealthier students, while the poor ones mostly go to private ones (paid, and with not much status for employers). When graduated, the chances for the students who had better access at the beginning to get a job are clearly higher.
In addition to that, jobs, both in the public and private sector, are often given to people who have access or influence with the respective employers. Sometimes, the family even make use of bribery in a way to guarantee the job.
With these barriers, a regular citizen has its opportunities diminished, which slow down the growing process of a qualified candidate, and consequently increases the unequal distribution in the country.
Sources:
1 - https://www.bbc.com/portuguese/brasil-44489766;
2 - Personal.
10 – Share of All Jobs in Small Businesses (3.0)
My score for this policy is 3.0 because of the balanced representativity of small business in the economy.
In Brazil, small businesses represent 98% of the enterprises in the country. Also, 56% of the employees with their Employment Card (a document that officializes the job position with all its rights) are in the small business sector. The exportation enterprises count with 62% of its amount in small businesses. In addition to that, small businesses are responsible for 20% of the GDP.
The data is relevant, but there are also barriers. For an entrepreneur to create a new business, it should overcome a long bureaucracy process. The quantity of taxations and licenses to get before opening a business are demotivating. Also, the small business usually can’t afford to keep a good salary for its employees, which sometimes result in the migration of those to bigger companies. Despite that, the share of jobs within small business are good, and with potential to get even better numbers in the following years.
Sources:
1 - https://www.sebrae.com.br/Sebrae/Portal%20Sebrae/UFs/SP/Pesquisas/resultado_mpe_brasil.pdf;
2 - https://revistapegn.globo.com/Empreendedorismo/noticia/2015/11/burocracia-atrapalha-o-empreendedorismo-no-brasil-afirma-presidente-do-sebrae.html;
3 - Personal.
11 – Freedom from Outside Control (4.0)
My score for this policy is 4.0 because as a Brazilian citizen, I never felt affected by any international control.
Despite the fact that Brazil has reached the record mark of R$4 trillion in public debt on September of the current year, and it creates a certain submission to its creditors, as a Brazilian citizen, I have never felt affected or knew someone affected by any outside influence or control.
Sources:
1 - http://agenciabrasil.ebc.com.br/economia/noticia/2019-09/divida-publica-federal-ultrapassa-r-4-trilhoes-pela-primeira-vez;
2 - Personal.
12 – Protection of Domestic Enterprises (3.0)
My score for this policy is 3.0 because of the positive surplus in the balance of imports and exports.
For the last 5 years, Brazil has had a positive surplus in its exports and imports balance. This shows that Brazil prefers its national enterprises, prioritizing the inside the border businesses. Although, there is a deficit of qualified labor in some areas, and it creates a necessity for foreign labor that, especially in tech, comes with international enterprises. With more advanced technology and equipment, these foreign companies take the lead in the national scenario not giving space for a competitive market with local businesses.
In addition to that, there are a lot of taxation of international businesses, but it also applies to national companies. This excessive taxation results in slowing the productivity for both businesses, not creating a protection to its national companies.
Sources:
1 - https://br.advfn.com/indicadores/balanca-comercial/brasil;
2- https://www.mises.org.br/Article.aspx?id=2769;
3 - Personal.
13 – Foreign Currency Transactions (5.0)
My score for this policy is 5.0 because there is only one currency used in Brazil.
In Brazil the only official currency used for national transactions is Reais (R$) and is required for any other currency to be converted into it before proceeding with a transaction. It makes easier and simpler for businesses to do their jobs in an efficient way.
Sources:
1 - https://www.bcb.gov.br/;
2 - Personal.
14 – Border Control (2.0)
My score for this policy is .0 because of the weaknesses in Brazilian borders.
In Brazil the borders are weak, and the recent migration of people from their poor countries has had Brazil as one of their main destinations.
Brazil is well known to be a country opened to everyone, not imposing restrictions on its borders. What happens is that this is causing an increase in the numbers of immigrants, which a lot of them are illegal. The country doesn’t have structure to receive all these people, and as a result, a lot of immigrants have been living in miserable conditions. To fix this situation, the government is trying to create social programs for the refugees, and it takes away the resources from its citizens. As a result, both Brazilians and immigrants don’t have conditions to live a dignified life.
Another issue in national borders is the illegal drug trade. Especially in the states of Amazonas, Acre and Rondônia, the drug trade schemes have been putting the areas around the border under danger and fear.
Sources:
1 - https://vestibular.uol.com.br/resumo-das-disciplinas/atualidades/imigracao-no-brasil-ilegais-provocam-crise-humanitaria-no-acre.htm;
2 - https://veja.abril.com.br/brasil/trafico-de-drogas-e-guerra-de-faccoes-a-amazonia-e-o-novo-rio/;
2 - Personal.
15 – Currency (5.0)
My score for this policy is 5.0 because a single currency is issued throughout the country.
Because there is only one currency being issued in the banks, and because it is the official one in the country, I give to this policy the highest rate.
Sources:
1 - https://www.bcb.gov.br/;
2 – Personal.
16 – Cultural, Language Homogeneity (5.0)
My score for this policy is 5.0 because of the harmony with which Brazil administrate its intern cultural differences.
When we are talking about the 5th biggest country in territory in the world, is normal to expect variety in its culture. In the North we have a more native and natural culture, with a rich folklore based on our past. In the Northeast we can find a strong beach environment in a very hot weather and a strong accent that contrast with the European style we have in the south. The differences are expressive, although the harmony prevails.
Besides the regional differences, the official language in Brazil is Portuguese and everyone in the country can communicate effectively.
The notion of conflict based on cultural differences doesn’t apply to brazil, where instead, we take advantage of it to make the country more delightful and attractive to tourism.
Sources:
1 - http://bibliotecadigital.fgv.br/ojs/index.php/cadernosebape/article/view/5250;
2- https://brasilescola.uol.com.br/o-que-e/portugues/o-que-e-variacao-linguistica.htm;
2 - Personal.
17 – Political Effectiveness (1.0)
My score for this policy is 1.0 because the political administration has been proved corrupt and inefficient.
It’s a blessing that in Brazil is rare to have natural disasters, so the politicians don’t have to worry about this. However, the political administration is poor and inefficient both in the urban or rural areas. It is just necessary to look at the news, and a long list of scandals of corruption, deviation of public capital and political privileges being used for personal benefit will show up.
These deviations are reflected in the deficiency in our hospitals, judicial courts, security and taxations.
This situation creates a poor environment for businesses, and makes appropriate to be given the lowest score.
Sources:
1 - https://www.heritage.org/index/country/brazil;
2 - Personal.
18 – Institutional Stability (2.0)
My score for this policy is 2.0 because of the often changes in the economic political scenario.
The Brazilian Constitution was proclaimed in 1988. Having 31 years of activity after other 6 constitutions in our history, is expected an updated and effective legislation, and in fact is not bad. The controversy is found in how susceptible the Judiciary is to bribery.
The Political Scenario in Brazil has been revealing so many corruption schemes (with politicians and government enterprises stealing money from the public and getting away with that), that makes impossible an institutional stability. Instead of a predictable and stable economic environment, our government has provided a Russian roulette game for businesses, where one or another is usually shot and knocked down.
Theoretically, Brazil has taken out of poverty 29 million people. What happens is that to be considered out of poverty the person just needs to be earning around $24 a month. You can’t really do anything with just that.
Discouraged with our reality, businesses tend not to increase its body of employees, and it slows down the welfare creation.
Sources:
1 - https://www.worldbank.org/en/country/brazil/overview;
2 - https://www.nexojornal.com.br/grafico/2016/09/26/As-caracter%C3%ADsticas-das-Constitui%C3%A7%C3%B5es-pelo-mundo;
3 - Personal.
19 – Honest Government (1.0)
My score for this policy is 1.0 because of the high rate of corruption and dishonesty in Brazil.
Brazilian political scandals aren’t new and the effects of this irresponsibility and bad administration are bringing the country down. The Political Crisis has been turned into a worse in our taxation system, and a decrease in democratic quality according to the website “O Tempo”. In addition to that, the website Uol showed that more than 10 corruption schemes were revealed just in the last 20 years, taking billions of reais (Brazilian currency) out of public coffers.
The new president and its government might be a solution for our poor and horrifying reality. With a new look with transparency and focus in effectiveness, we can live a new era in our lives. It takes time to see, though.
Sources:
1 - https://www.otempo.com.br/polopoly_fs/1.1306478.1464374604!/index.html;
2 - https://noticias.uol.com.br/politica/ultimas-noticias/2015/06/05/pelo-menos-11-escandalos-de-corrupcao-sacudiram-pais-desde-mensalao-relembre.htm;
3 - Personal.
20 – Common Laws (2.0)
My score for this policy is 2.0 because rich people can influence the judiciary and manipulate the laws in their favor, while the poor usually have a limited access.
When someone commits a crime, they should take the consequences, no matter the balance they have in their bank accounts. In Brazil is quite common to see unconscious people defending criminals for their crimes, reasoning that it was as a result of the poor environment they live. I believe that poverty can’t be used as an exculpatory for committing a crime, and that the consequences should be applied.
The recent scandals involving corruption showed what most Brazilians expected. In the development of those, the authorities offered plea bargains to some of the involved in exchange for relevant data for the referred cases. The testimonials brought a lot of situations where powerful and rich people committed bribery to get away from their crimes. A big fail in our judiciary system is how often it happens.
The legal system in Brazil is not the worst, but the regulation to make sure people are following the rules, is flawed. This failure puts Brazil in a disadvantaged situation, so deserving the low score.
Sources:
1 - https://www.otempo.com.br/polopoly_fs/1.1306478.1464374604!/index.html;
2 - https://www.ganintegrity.com/portal/country-profiles/brazil/;
3 - Personal.
21 – Central Bank 3.0
My score for this policy is 3.0 because of the slow growth ratio Brazil is going, and the inefficient manipulation in our inflation rates, even though the independence its Central Bank has.
Even though in Brazil the Central Bank is public, unlike of most developed countries where they are private, it stands as a private bank. The central bank holds the monopoly in issuing our currency, having the right to control economic policies and in regards of establishing interest rates. This makes the Central Bank independent from government interference in a theoretical view, and this independence is very welcome in keeping the aims of the bank in the economic wellness of our nation.
What happens is that this independence was firmed basically in a verbal agreement between the government and the directors of the Brazilian Central Bank. A good perspective is funded in the attempt of the new federal government leaded by the president Jair Bolsonaro, in making it a law. In addition to that, it is proposed to estipulate the spot of President of the Central bank as an electing position of four years (same as president), in a different period not to conciliate the elections, and increase the possibility of corruption in the process.
From the last year to the current one, the growth estimate of Brazilian GDP has decreased from 2% to 0,8%. It shows a fault in the duty of controlling the inflation and providing a good national economic development, although, with some reforms in the economy and our social security fund, would be difficult preserve high perspectives.
Sources:
1 - https://www.politize.com.br/banco-central/;
2 - https://journals.openedition.org/ras/685;
3 – https://g1.globo.com/economia/noticia/2019/06/27/banco-central-reduz-para-08percent-estimativa-de-alta-do-pib-em-2019.ghtml;
4 - Personal.
22 – Domestic Budget Management 2.0
My score for this policy is 2.0 because the government has had constant negative balances along the recent years.
Brazil recorded a Government Budget deficit equal to 7.10 percent of the country's Gross Domestic Product in 2018. Government Budget in Brazil averaged -4.51 percent of GDP from 2001 until 2018, reaching an all-time high of -2 percent of GDP in 2008 and a record low of -10.20 percent of GDP in 2015.
Sources:
1 - https://tradingeconomics.com/brazil/government-budget;
2 - Personal.
23 – Government Debt 2.0
My score for this policy is 2.0 because the GDP of Brazil has been expressively affected by their debts.
The IMF calculates that Brazil’s gross debt to GDP ratio was 84% at the end of 2017. At the same time, the country’s net debt to GDP ratio was 51.6%. Gross debt counts just all the money that the country owes. The net debt figure deducts all the government-held assets for that figure.
The Federal Government Debt has increased 0,31% this year, to R$3,890 trillion according to our National Treasure. This increase in our Government Debt tends to elevate the inflation ratio, which would worst even more our situation.
Because of the bad administration of its public debts, I give to Brazil the score of 2.0 for this policy.
Sources:
1 - https://commodity.com/debt-clock/brazil/;
2 - https://g1.globo.com/economia/noticia/2019/06/26/divida-publica-sobe-03percent-em-maio-para-r-389-trilhoes.ghtml;
3 - Personal.
24 – Economic Statistics (2.0)
Because of the terrible reliability of most of our data sources, I give to this policy the score of 2.0.
The most reliable source of statistical data in Brazil is IBGE (Brazilian Institute of Geography and Statistics). Official data is raised based on standardized methods of sampling individuals and creating variables to express our reality in numbers, usually, in a neutral way. The unfortunate is that Brazil was led by a very tendentious government for the last years [especially during the PT (Workers Party) governance], which controlled and manipulated the press and centers of data research in a way to show what they wanted the people to know and read, and cover what they didn’t want to come to public.
For the fairness of the destiny, this sad reality has been changed dramatically since the Federal Police started to break down investigations on corruption schemes involving numerous politicians. Operations such as “Operação Lava Jato”, “Operação Custo Brasil” and “Operação Acrônimo”, unleashed the truth behind the mandates of the last years. This truth brought a new look to the eyes of the Brazilian population, showing that a lot of what was showed along those years was not true. That made the trust in statistics to decrease substantially, which includes the economic ones.
Because of that, I give the score of 2.0 to this policy.
Sources:
1 - https://www.sitedecuriosidades.com/curiosidade/quais-sao-as-principais-operacoes-da-policia-federal-em-curso-contra-a-corrupcao.html;
2 – Personal.
25 – Protection of Public Health and Safety (2.0)
My score for this policy is 2.0 because of the bad allocation of resources to health-related services and the negative data listed below.
Brazil registered 72,788 new cases of tuberculosis, which if compared to the United States number of 9,029 new cases of TB, it elevates a concern. According to the World Health Organization classification for 2016-2020, Brazil occupies the 20th position in the group of the 30 prioritized countries for TB.
The infant mortality rate in 2018 for Brazil was 12,8 for every thousand live births. In United States it was 5,8 for every thousand live births. That shows that Brazil registered more than the double deaths in comparison to US, and again bad classified.
The negative statistic listed above, push down the score I give to this policy, which is 2.0.
Sources:
1 - https://portalarquivos2.saude.gov.br/images/pdf/2019/marco/22/2019-009.pdf;
2 - http://www.saude.sp.gov.br/resources/cve-centro-de-vigilancia-epidemiologica/areas-de-vigilancia/tuberculose/eventos/tb18_forum_panorama_tb_no_brasil.pdf;
3 - https://www.cdc.gov/mmwr/volumes/68/wr/mm6811a2.htm;
4 - https://valor.globo.com/brasil/noticia/2018/11/29/taxa-de-mortalidade-infantil-no-brasil-recua-em-2017-aponta-ibge.ghtml;
5 - https://www.cdc.gov/reproductivehealth/maternalinfanthealth/infantmortality.htm.
26 – High Wage Policies (1.0)
My score for this policy is 1.0 because of the low buying power and per capita wage Brazilians have.
According to IBGE (Brazilian Institute of Geography and Statistics), the average per capita wage for the last year was R$1.373, ranging from R$605 in the state of Maranhão (R$349 under the national minimum wage), to R$2460 in Distrito Federal (where most of our politicians live).
IBGE also released a research that Brazil has more than 25% of its population living in the line of poverty, which means earning in average US$5.50 a day.
When we take into consideration the buying power Brazilians have, the reality become even more evident. Because of the high taxations, an iPhone X costs R$6.299, which means that it’s required to dedicate more than 6 whole minimum salaries for buying a cellphone.
Because of the low wages and buying power, I attribute the lowest score for this policy.
Sources:
1) http://agenciabrasil.ebc.com.br/economia/noticia/2017-12/ibge-brasil-tem-14-de-sua-populacao-vivendo-na-linha-de-pobreza;
2) https://www.proximatrip.com.br/diversos/tecnologia-para-viagem/quanto-custa-comprar-iphone-x-ou-8-no-exterior-veja-preco-economia-sai-barato/;
3) https://exame.abril.com.br/economia/ibge-renda-domiciliar-per-capita-no-brasil-foi-de-r-1-373-em-2018/;
4) Personal.
27 – Environmental Protection (2.0)
My score for this policy is 2.0 due to the bad administration of the environmental legislation.
In Brazil we can find a lot of governmental institutions and departments responsible for protecting and preserving the environment. Some examples are SISNAMA (National System of the Environment), MMA (Ministry of the Environment), SEMA (State Secretariat of the Environment) and IBAMA (Brazilian Institute of Environment and Renewable Natural Resources). The problem relies on the fact that quantity doesn’t make any difference here. With all this institutions and legislation (which, by the way, Brazil has one of the strictest in the world), Brazil doesn’t portrait itself as a standard to be followed.
Without regulations, all the good characteristics remain useless. Unfortunately, this is an overall reality in Brazil, where we often have good resources, but a bad administration, regulation and reinforcement.
Brazil has a strong potential to become a model in what concerns to the environment, especially for being the home of the biggest Amazonian area in the world. However, its government and citizens in general got to start pursuing this as a reality. For now, it is just a wish, and because of that I give to this policy the score of 2.
Sources:
1) https://www.suapesquisa.com/ecologiasaude/leis_ambientais.htm;
2) https://www.ambflex.com.br/2019/07/22/protecao-ambiental-no-brasil-2/;
3) https://jus.com.br/artigos/58370/protecao-ambiental-no-brasil-e-no-mundo;
4) https://revistaamazonia.com.br/estudo-mostra-que-brasil-possui-uma-das-legislacoes-ambientais-mais-rigidas-do-mundo/;
5) Personal.
28 – Strong Army (3.0)
My score for this policy is 3.0 because of its just intermediate capacity to an international conflict.
Brazil is ranked in the 5th position as the biggest territory and population as well. However, according to the website GlobalFirePower, Brazil occupies the 13th position in the military strength rank. Even though this rank puts Brazil above of all its neighbors, if occurs the unexpected and Brazil gets involved in a conflict with one of the most powerful countries, we are going to feel the harm.
In 2012, the General and ex-chief of the Commander of Terrestrial Operations (Coter), said that Brazil just had enough ammo to hold 1 hour of battle. In addition to that, in a simulation of war between Brazil and Venezuela made by the website Superinteressante, we could even take the win, but a surprise could also happen.
Brazil is not the weakest in military defenses but could be more prepared to face an international conflict. Because of that, my score for this police is 3.0.
Sources:
1) https://exame.abril.com.br/brasil/exercito-brasileiro-possui-municao-para-uma-hora-de-guerra/;
2) https://www.aereo.jor.br/2012/08/13/brasil-tem-municao-para-1-h-de-guerra-dizem-generais/;
3) https://www.globalfirepower.com/country-military-strength-detail.asp?country_id=brazil;
4) https://www.gestaoeducacional.com.br/maiores-paises-do-mundo/;
5) https://super.abril.com.br/tecnologia/como-seria-uma-guerra-brasil-x-venezuela/.
29 – Foreign Trade Impact (3.0)
My score for this policy is 3.0 because of the good equilibrium Brazil has for the net of imports and exports in relation to the GDP.
In 2017 Brazil exported US$219 Billion and Imported US$140 Billion which correspond to a positive trade balance of US$78,3 Billion.
The GDP for the same year was US$2,06 Trillion. The total foreign trade account represents 17%. Because it is half of 33% (the ideal percentage the same statistic), I give 3 as a score for this policy.
Sources:
1) https://oec.world/pt/profile/country/bra/;
2) Personal.
30 – Management of Foreign Currency Budget (3.0)
My score for this policy is 3.0 because even though Brazil had a positive balance of imports and exports last year, it is still dependent on importation. Until November of 2018, Brazil has accumulated US$220 Billion of exports in face of the US$217,7 of imports for the same period. It shows a positive balance of US$2,3 Billion. For wheat, more than half of national demand is imported and technology also represents a high demand for importation.
Without the need for importation, Brazil would get a higher score for this policy, but while it is just a desire, my score is 3.
Sources:
1) http://www.efficienza.com.br/importacoes-e-exportacoes-do-brasil-em-2018-superam-2017/;
2) https://diariodocomercio.com.br/brasil-depende-de-importacoes-com-dolar-em-alta/;
3) Personal.
31 – Layers of Collective Action 2.0
My score for this Policy is 2 because the representativity of the community as a guidance for our future is still small and without exponential effects. Officially in Brazil, it is a constitutional right of the society to be involved in the decisions of its community according to the Article 204 of the brazilian constitution. Community boards would be an efficient way to have a community interest represented, especially because it is a direct connection of the public with public governance. But like I said, it just would. Unfortunately, in the most regions in Brazil, the commitment of the society with their board of representatives are expressly low. Whether if it is because of the absence of awareness of the board’s existence or simply interest, the collective action has been a weakness within the Brazilian decision-making. But for the last 5 years, we could see an improvement occurring. Brazilians started being tired of getting used by the inefficient public administration and looking for a better country with better opportunities. A big demonstration of that is the impeachment of our ex-president Dilma Rousseff for the crime of responsibility, corruption in Petrobras and others. Another action was the election of the president Jair Bolsonaro who so far has positively worked on the security system in Brazil, improved the international trade scenario that brazil is included and provided a transparent governance. Despite the low score attributed to Brazil for this policy, I expect to see significant changes in the years that follow.
Sources:
1) Brazilian Constitution (http://www.planalto.gov.br/ccivil_03/Constituicao/Constituicao.htm);
2) https://www.politize.com.br/conselhos-municipais-fatos-importantes/;
32- Pro-business climate 3.0
My score for this policy is 3.0 because the positive points of creating a business in Brazil takes the lead in a fight against the negative ones. When analyzing the business climate is good to make a balance of pros and cons. While there are good and relevant incentives for the creation of new business such as loans for small business, SEBRAE (Brazilian Service of Support to Micro and Small Business) which is an institution that offers a variety of courses and preparation for small business persons and the ones who are seeking the creation of new business, and also a reduction in some of the various taxes we have such as ICMS (Tax on Circulation of Goods and Services), IPTU (Tax on Urban Buildings and Lands), ISSQN (Tax on Services of Any Nature) and some others. The cons start first at the absurd quantity of taxes a businessman must pay. In addition to that, there is a fear of the many obligations with its employees that includes paid vacation of 30 days/year, they must pay the days for whenever an employee needs to miss the job for medical issues and so many others. I believe that a reduction in all the taxes and the obligation with the employees would beneficiate the business owner, and the employees because with less expenses, more businesses could be created.
Sources:
1) https://blog.contaazul.com/utilize-incentivos-fiscais-para-fazer-sua-empresa-crescer;
2) http://www.clicrbs.com.br/especial/sc/praias-sc/19,859,3402009,CLT-Direitos-e-deveres-do-empregado-e-do-empregador.html;
3) Personal.
33 – Government Enterprises 1.0
For this policy, I will give 1 to Brazil because the enterprises with influence and power in brazil are predominantly operated by the inefficient governmental administration. By November of 2018, Brazil had registered 418 enterprises directly or indirectly controlled by the federal government. Between the big ones are Correios (Post Office) and Petrobras (Petroleum Industry), the last, involved in the biggest corruption scheme in our history where just Petrobras was responsible for more than R$80 billion of damages in the economy. The state monopolizes the post office, petroleum and other ones. This monopoly avoids the establishment of private companies, and in consequence the market competition. Without competition, the government can decide the price for their products and manipulate it accordingly with their own interest. The only good thing would be if these companies had a good administration, which they don’t have it. Another example of bad administration are the public universities (federal and state), where the education level has been decreasing and strikes have become a routine.
Sources:
1) https://spotniks.com/os-10-maiores-casos-de-corrupcao-da-historia-do-brasil/;
2) https://exame.abril.com.br/negocios/as-7-maiores-empresas-estatais-do-pais-em-vendas/
3) https://epocanegocios.globo.com/Brasil/noticia/2018/11/epoca-negocios-brasil-e-campeao-em-numero-de-estatais-entre-economias-mais-desenvolvidas.html;
4) Personal.
34 – International Security Agreements 4.0
My score for this Policy is 4 because our reality is peaceful, without any international conflicts going on or in our recent history. Brazil is a neutral country. It has not been involved in any international or civil war for at least 70 years, and internationally talking brazil has not being very representative in most of the ones it was part of. Because of this neutrality, businesspersons usually don’t even take into consideration international conflicts in a war level when talking about Brazil. On the other hand, if the unexpected happens and Brazil, for whatever reason, gets involved in a war, we might not be as prepared as we could be. Part of our war airplanes, tanks and artillery are outdated. The peace period Brazil is living gives us the privilege not to be as worried as the US. Although, better is prevent than remediate. With the expansion of the technology, cyber security becomes an extremely relevant point, and in the leak promoted by Edward Snowden, was revealed that the US government was spying Brazilian governors. Taking all in consideration, Brazil is not involved in any international tension and it makes a perfect scenario, in these terms, to investments.
Sources:
1) g1.globo.com/politica/noticia/2015/07/lista-revela-29-integrantes-do-governo-dilma-espionados-pelos-eua.html;
2) https://tokdehistoria.com.br/2011/12/15/a-ultima-guerra-que-o-brasil-participou-foi-a-mais-de-70-anos-mas-os-brasileiros-temem-agressao-de-potencia-estrangeira/;
3) https://noticias.r7.com/internacional/espionagem-abre-discussao-sobre-preparo-do-brasil-para-uma-guerra-cibernetica-14102013;
4) Personal.
35 - Protection of domestic enterprises from government mandated costs 1.0
My score for this policy is 1 for the unwise quantity of taxation and the absence of government ceilings for it. There are IRPJ (Tax on Legal Person Income) which corresponds to 15% on profit, IPI (Tax on Industrialized Goods) which rate is relative to the table of IPI, CSLL (Social Contribution to Net Profit) which varies from 9 to 15% depending on the nature of the legal person, ICMS (Tax on Circulation of Goods and Services) and so many others. There are very small limitations on taxation, a huge amount of them and it discourages people to create and/or invest in business. An exception in brazil is the City of Manaus/Amazonas where there is exemption in a lot of taxations thanks to the law that instituted the Zona de Manaus in 1957. This law was created to encourage the economic development in the Occidental Amazonia. Unfortunately, this encouragement just happens in one city in an entire country, and because of that it doesn’t influence the overall score of 1 that I attribute to this policy.
Sources:
1) http://www.sebrae.com.br/sites/PortalSebrae/artigos/conheca-os-principais-impostos-pagos-por-empresas-no-brasil,a718d53342603410VgnVCM100000b272010aRCRD;
2) http://www.sebrae.com.br/sites/PortalSebrae/artigos/conheca-os-principais-impostos-pagos-por-empresas-no-brasil,a718d53342603410VgnVCM100000b272010aRCRD;
3) Personal.
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