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BRAZIL: COUNTRY WITHOUT DIRECTION
Fernando Alcoforado *
Brazil presents in the present decline in economic growth with a tendency to stagflation,
rising inflation rates, very high tax burden, increasing indebtedness of the public
machine, precarious transport and energy infrastructure, failure of public education and
health, threat of deindustrialization, bottleneck logistics, precipitous drop in the trade
balance and high levels of corruption. All this happens as a result of the incompetence
of the federal government has not been able to devise a strategic plan for the
development of Brazil.
Brazil has also problems in the field of innovation that does not develop fully because it
depends on the bankrupt education system of the country unable to generate knowledge.
The latest data from the World Economic Forum put Brazil in the worst positions in
educational issue worldwide. Due to the deficiency of the education system in Brazil,
Brazilian companies such as Natura, Vale, Embraer and others that seek to effectively
develop innovation in major American universities like MIT knowledge, research and
personnel to meet this demand.
The lack of strategic vision and managerial incompetence are the main brands of
Brazilian governments in Brazil's recent history. The Brazil operates as a "Titanic"
going toward the "iceberg" of depression without their commanders to take appropriate
action to avoid disaster. Brazil has been governed for decades by incompetent people
without strategic vision and effective with no prospect of sustainable growth for the
country. Government incompetence manifests itself not only in solving problems of
today, but especially by compromising the future of nation.
To overcome the current problems of Brazil and its further development in the coming
years there is an urgent need for a strategic development plan for Brazil. This means
that the Brazilian government should adopt a new economic policy focused on
encouraging import substitution industrialization, going to produce in Brazil which is
imported from abroad. The goal would be to reduce spending in the country with
foreign imports, thus contributing to reduce the deficits that are already occurring in the
balance of trade and balance of payments on current account, as well as increase the
generation of employment and income in the market procedure.
The emphasis on the domestic market is absolutely necessary because Brazil can no
longer dependent on export earnings, especially from China that is experiencing a
slowdown in its growth. Brazil cannot remain dependent on external market because the
economic downturn and financial crisis will have no solution in the short and medium
term. The world economy is in recession and heading for depression. The output state of
depression for the resumption occurs only in the long term, if we take on the experience
of the depressions of 1873 and 1929. The foreign trade of Brazil will be deeply affected
in the coming years. In these circumstances, it is urgent to implement a development
plan for Brazil strongly supported domestically.
One indisputable fact is that, in Brazil, while growing household consumption and
government spending, the country is saving less and less commitment to the expansion

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of investments. In the economic history of Brazil's post-war to the present time, the
dilemma of how to increase the savings rate for the country to grow faster has always
been solved by various governments with the use of foreign savings to the attraction of
foreign direct investment and obtain international funding, which resulted in the
increase in external debt and external dependence of the country. There has never been
a part of the Brazilian government or a real concern with the formation of public saving,
nor with creating incentives to raise domestic private savings.
To increase public sector savings, which the government needs to do is, on the one
hand, renegotiate or suspend repayment of domestic debt for a certain period of time
and on the other, to make your current expenses are reduced or grow less than the Gross
Domestic Product (GDP) to dispose of funds for public investments, especially in poor
economic infrastructure (energy, transport and communications) and social (education,
health, housing and sanitation). Thus, the conditions would be created for the public
sector can invest and finance from its own resources, and not borrowing as currently
occurs.
For the federal government to make its current expenses are reduced or grow less than
the Gross Domestic Product (GDP) of Brazil, it is essential to conduct a thorough
administrative reform to streamline public administration in the country that contributes
also to eliminating waste and reducing costs of the public service. Only undertaking the
reform of the State and Public Administration in Brazil will be able to correct current
distortions and reduce the tax burden benefiting businesses and workers. The future
capacity of the Brazilian government to invest in the expansion of the economy and
implement social programs depends to a large extent, the administrative restructuring
that it is processed starting with the drastic reduction in the number of ministries and
commissioned positions.
On combating inflation, we must emphasize that it is returning due the government's
fault and not the entrepreneurs and consumers. Brazilian companies and workers are
productive. Who is unproductive is the government. Inflation in Brazil today is due
more to the lack of productivity of government administration than the lack of
productivity of firms. Conducting a thorough administrative reform of the Brazilian
state could contribute to the fight against inflation by eliminating waste and reducing
costs of the public service. It is therefore to the Brazilian people pressing current rulers
to make the necessary changes with the advancement of mass movements or replace
them in the next elections to reverse the unfortunate current situation of the country and
give a direction to Brazil to meet the interests of population.
* Alcoforado, Fernando, engineer and doctor of Territorial Planning and Regional Development from the
University of Barcelona, a university professor and consultant in strategic planning, business planning,
regional planning and planning of energy systems, is the author of Globalização (Editora Nobel, São
Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo,
1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do
desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,
http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel,
São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era
Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social
Development-The Case of the State of Bahia (VDM Verlag Dr. Muller Aktiengesellschaft & Co. KG,
Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (P&A Gráfica e Editora,
Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global
(Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011) and Os Fatores Condicionantes do
Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), among others.

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