Itaú BBA - How to make Brazil more competitive?

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How to make Brazil more competitive?

February 25, 2019

In the competitiveness agenda, we see a tax simplification and reducing red tape as the most urgent fronts to work on

For the version with all charts and tables, please open the attached pdf file

 

• In his speech in the World Economic Forum earlier this year, President Jair Bolsonaro mentioned his intent to place Brazil among the 50 best countries for doing business before the end of his term.

• In 2018, Brazil was 109th among 190 countries in the World Bank’s Doing Business survey. Assuming this is an adequate metric for the President’s goals, Brazil would need to climb 59 positions to reach this goal.

• In Latin America, Chile (56th) and Mexico (54th) are the closest to this level. This study simulates how Brazil would benefit in terms of per capita income if the nation achieved a similar performance to these countries, in dimensions in which the Brazilian economy currently is significantly weaker.

• The paper also analyzes potential progress in another ranking, the Global Competitiveness Report, which uses a broad range of economic, institutional and social factors to explain development in a more comprehensive manner. Brazil is 72nd among 140 economies in this list.

• In a simple comparison with other countries, we found that even modest competitiveness gains could lead to significant increases in income. The broader the efforts in this direction, the bigger are the potential gains.

• This exercise also allows us to identify priorities in a reform agenda that seeks to improve the business environment in Brazil: simplifying the tax system, cutting red tape, improving credit market regulations and opening up the economy. In a broader effort to boost competitiveness in the next years, we believe that advances in terms of macroeconomic stability and infrastructure would also produce significant gains.

 

Pedro Renault
Igor Rose

 

For the version with all charts and tables, please open the attached pdf file 



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