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sábado, 7 de abril de 2012

A critical view of Brazil’s Investment Opportunities: Interview with Paulo Moura

Today Brazil is one of the emerging markets attractive for investments. Despite the incentives typical for strategic approach for creating favorable conditions, there might be some hidden drawbacks in policy or environment that might affect investors’ decision-making.
Professor Paulo Moura, Political Scientist, reviews critically the current investment climate in Brazil.
Paulo Moura is a pundit who has a lot of public appearances in radio and newspapers generating many controversies. His critical view of the current Brazilian government can enlighten the most naive investors. Moura is a professor of Political Science at the Lutheran University of Brazil (Ulbra) and a doctor in Social Communications graduated at PUC-RS. In an exclusive interview to Timizzer, Moura alerts for the level of corruption in Brazil, and says that he does not believe that the country would do a larger tax reform. Also, he thinks that all changes must benefit just special interest groups. However, Moura points out that more government concessions may happen at president Dilma Roussef’s term.
Timizzer – Do you believe that mayoral elections this year and the coming major international events such as the World Cup and the Olympics would boost Brazil to have extraordinary investments in infrastructure?
Paulo Moura – The investments are already happening, but is possible that several works can’t meet the deadlines.
Timizzer – Everyday we see new announcements of foreing investment in Brazil, despite the recurrent new about corruption in the country. Do you think one day that credibility would fall or foreign investors are not worried about that?
Paulo Moura – The world is in a crisis and, so far, Brazil is one of the places where you can invest with a return even with the existing corruption. It is better to profit in a country with corruption rather than the opposite. However, we have to take into consideration that the political and legal constraints are also growing.
Timizzer – There is a lot of misinformation from international investors about Brazil. Many international analysts even see Brazil’s incumbent party, the Workers Party (PT), as pro-business. However, entrepreneurs in the country struggle to pay all the taxes to deal with the increasing bureaucracy and the lack of infrastructure. What is your opinion about this contradiction?
Paulo Moura – PT is a social-democratic party. A long time ago the party is no longer an anti-system party and became the main party of the system. Nevertheless, it is party which spurs the state intervention in the economy and believes that income distribution is better than the market. Specifically, when PT is part of the government it chooses who the money is going to be distributed to, but here we have the same logic of the previous answer. It is better to profit in a place with burdens rather than not to.
Timizzer – The Brazilian government has shown signs of tax reliefs to some sectors. Is this trend going to continue? Is there a possibility for a larger tax reform?
Paulo Moura – I don’t see any perspective of tax reform. This system (the tax system) is the only system which is efficient for the Brazilian state. The government revenues even when the GDP slows down or the economy decreases. Who has the keys of the vaul to change this? The selected tax breaks are for the “friends of the king”. It explains the electoral funding that these benefited economic groups sponsor. The ones who lose are the taxpayers without any power of lobbying, but these citizens cannot realize the magic embedded into the complex Brazilian tax system.
Timizzer – The privatization of airports in a Workers Party government appears as a surprise. Do you think other privatizations can happen during president Dilma Roussef’s term?
Paulo Moura – I don’t see it as a surprise. The PT had privatized before, but this was hidden in a speak against the PSDB (Social Democratic Party, the oppostion). Now, with high popularity, Roussef decided to assume (the policy of privatizations). By the way, the PT says that “corruption just happens in privatization from others (parties)”. The party would not sell state-run companies to preserve the fallacy that concession is not privatization, but it may grant roads, ports, airports, and increase the number of PPPs in the infrastructure sector. They know the government is not efficient to do these tasks. Besides this, campaign funders always have a big eye on that and a strong lobby on these business.

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