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Science, Entrepreneurship, and Communication.  Brazil Chance - the present countryside

Science, Entrepreneurship, and Communication. Brazil Chance – the present countryside

The article was written by João Carlos Marchesan, business director, entrepreneur and chairman of ABIMAQ

Everything indicates that 2021 will not live up to the long-awaited year of resumption of growth. The first available data on the behavior of the economy is not good and independent analysts are talking about a decline in GDP, not only in this first quarter, compared to the fourth quarter of last year, but also perhaps in the second quarter compared to the second quarter of last year. First, which is irreparably hurting better performance for this year as a whole.

Given that the statistical burden of 2020 already guarantees, even without real growth, a result of about 3.6% per annum, this means that if the GDP for this year is below the level of market expectations, which were 3, 5%, then Brazil will have a year Another disappointing in terms of economic growth. The picture is all the more alarming because the country will complete its seventh year without cumulative growth, which means, in practical terms, a gradual impoverishment of Brazilians.

The continuing epidemic, the financial situation, high unemployment, household and corporate indebtedness … can be used to justify this poor performance, but in the end it only confirms that the country has no plan to appeal. the growth. For the seventh year in a row, after advancing important laws and reforms such as labor, social security, sanitation and many more, it is not possible to continue to blame the lack of further reforms for this modest outcome.

Although some of these reforms are important, such as mainly administrative and tax reforms, recent years have shown that they, while necessary, are not sufficient to ensure growth. Therefore, it is time to abandon fundamentalist beliefs and ideologies and begin, in a pragmatic way, to develop a strategy for resuming growth that, in addition to market forces, utilizes the immense power of the state that has been reasserted, worldwide, by public health. crisis.

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This strategy involves vaccinating the majority of the population in the shortest time possible. If we had vaccines, we could achieve that by the third quarter of this year, while avoiding another real drop in GDP, which would avoid worsening the situation of the more than twenty million unemployed and discouraged people, at least like many Brazilians who live. On the margins of society, as well as the alarming increase in extreme poverty, factory closures and the setback in education.

Besides vaccination, the government must resume public investments in infrastructure, to create jobs, so that the economy’s growth begins to play this role. High public debt should not be an absolute barrier to public investment, firstly because we are talking about annual spending in the range of 1.0 to 1.5% of GDP, compared to debt close to 90% of GDP, and secondly and most importantly. Because, as the International Monetary Fund says, much more important than the value of public spending is its quality.

Immunization of the population and resumption of public spending, albeit on the modest terms proposed, are the only two drivers available to us to be able to grow again in the short term, including in terms of per capita income, something that has not happened since the middle of the last decade. However, maintaining growth, in the medium and long term, at rates equal to or higher than global growth, which is a necessary condition to reduce the distance between us and developed and developing countries, requires other measures.

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Our development strategy needs to include robust minimization of systemic deficiencies to ensure a favorable macroeconomic environment for productive investment, with competitive exchange rates, low and controlled inflation, long-term financing, and real market interest rates below the rate of return of oil. Production, goods and services. A friendly business environment is another necessary precondition, which requires a simpler and less distorting tax system, appropriate regulatory frameworks, legal certainty and a strong reduction in additional liabilities.

This environment also means availability and affordability of energy, in the creation of a strong high-speed communications network connecting the country and accessible to the vast majority of Brazil’s population, and in significant and continuous developments in our logistics. This will eliminate the costs of producing national goods and services from the cost burden of Brazil, which currently severely reduces Brazilian competitiveness and leaves our products at a disadvantage, both in exports and in the domestic market.

General development policies should allow the productive sector to resume investments in both machinery, equipment and technology, which are essential to secure productivity gains. Rebuilding business competitiveness, strengthening production chains and reversing de-industrialization should have policies to support business efforts through digitization programs, with smart sensing and managing the resulting big data, via AI and platforms.

These public policies should also expect strong support for research, development and innovation in the private sector, with the loss of resources in part, with the placing of technological demands from the public sector with companies and the extensive use of the purchasing power of the state to direct development towards emerging technologies and long or questionable returns, in addition to increasing resources. General devoted to basic and applied science and research, especially in the fields of health, biotechnology, renewable energy, new materials, high-efficiency batteries, and microelectronics …

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Finally, quality education at all levels and, above all, the formation of a critical mass of well-qualified human resources in areas of new knowledge is essential to support these national development efforts, capable of ensuring a minimum level of industrial security. A country that guarantees, along with food, energy and military security, our sovereignty, allowing sustainable growth in the direction of improving the quality of life of the Brazilian people and democratizing the conditions for access to opportunity for all.

Source: Acessoria