Brazil became expensive before it became rich, says Alckmin

The acting president and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin, stated that Brazil became expensive for investment before becoming a rich country. Alckmin participated, this Wednesday (17), in Brasília, in the opening of the 1st Competitiveness Forum, an event promoted by the Competitive Brazil Movement and by the Parliamentary Front for Competitive Brazil.

“We need to act on the causes of low growth,” he said. “The Brazil Cost is not a single cause, but a set of factors that made Brazil expensive before it was rich. Usually rich parents are more expensive, we get expensive before being rich. So this competitiveness agenda is very important,” he added.

Custo Brasil is a term that describes the set of structural, bureaucratic and economic difficulties that make new investments more expensive and compromise companies and worsen the business environment in the country. That is, it is the additional expense that Brazilian companies have to disburse to produce in the country, compared to the countries of the Organization for Economic Cooperation and Development (OECD).

In a study carried out by the federal government, in partnership with the Movimento Brasil Competitivo, in 2019, this Brazil Cost was estimated at BRL 1.5 trillion, or 22% of the Brazilian Gross Domestic Product.

Tax reform

For Alckmin, the Brazilian tax system is very complex and the tax reform must be voted on by Congress as soon as possible to improve legal certainty and attract investment. “I’m optimistic, I think the project is mature, it was debated a lot. Reforms have to be approved in the first year (of the government), if you missed the first year, it passed, now you have to vote. I think it is not a finished and perfect work, but it will help a lot (competitiveness) because it brings economic efficiency, simplification and helps exports”, he said.

He also mentioned the fiscal framework, which is also about to be voted on by Congress, and which should help reduce inflation and interest rates in the country. By proposing spending control and reducing the public debt, the fiscal framework can impact market expectations for inflation, a factor taken into account by the Banco Central in the decision on the economy’s basic interest rates and monetary policy.

Among other issues that must be observed in order to improve the country’s competitiveness, Alckmin spoke about the training of human resources, investments in research and innovation, and the sustainability and value addition of production chains.

Vice President Alckmin took over the Presidency today, with President Lula’s trip to Japan, where he is participating as a guest at the G7 Summit, a group of the seven largest economies in the world: United States, Japan, Germany, United Kingdom, France, Italy and Canada.

Public consultation

According to the vice-president, the Ministry of Development, Industry, Commerce and Services (MDIC) has opened a public consultation on competitiveness and regulation, so that agents from different economic sectors can point out problems in these areas. Contributions can be sent until tomorrow (18), through the platform Participates +Brazil.

The material will serve as a basis for the elaboration of the Brazil Cost Reduction Plan 2023-2026, which aims to implement regulatory improvements, with the removal or revision of norms that impose barriers to economic activity, both at the legal and infra-legal levels.

According to the MDIC, the public consultation covers the complete lifecycle of a typical company, from its creation to its closure, and the topics include regulations related to taxes, foreign trade, infrastructure, the labor market, the environment, among others. others.