I
spent most part of my life as an executive of multinational
corporations trying to explain this strange country called Brazil. Studies
upon studies, conversations with renowned economists, study groups, but
nothing that could explain the high inflation, the various economic
plans, government interventions in the market, the lack of visibility in
the medium and long term, and so on and so .
I am
not an economist, but I recognize that the country has changed in the positive way in the last years, was even worthy of a story where there was on
the cover of The Economist, Christ the Redeemer taking off! For
me, it was much more a marketing process than a real economic truth, and make more sense when
last week, the managing director of the IMF, Christine Lagarde expressed
concern with Brazil's economic forecast, GDP growth in 2013 of 3.5%,
how?
Brazil's
growth after 2004 was based on the expansion of domestic demand by the
consumer market, and demand for basic raw materials for the international
market. This
expansion was supported by existing idle production resources and the
manpower available, no significant investment in
infrastructure that could support a long-term sustainable growth was done.
Consider
the following: decisions made to encouraging the market was through trial
and error, IPI reduction, exemption of labor tax and contributions for some sectors, increasing
the exchange rate of U.S. dollar to the level of $ 2.00, and that is it. Based on this background, how could we expected any GDP growth in 2012? and how really do we expect GDP growth of 3.5% for 2013? It doesn't make sense for me.
In
my work as a consultant I see an industry being destroyed, not that
the entrepreneur has not his part of this movement, he did not do his homework. But when a country allows apparel products to reach the
market 40% cheaper
than domestically produced he is sending a clear message that this
sector is not a priority for the government. The dressmakers will lose their jobs for imported goods. The worst is that be a dressmaker is the only way to have a decent job, the most part of them works at home, living in a suburb, with very low government support.
The
graphic sector for printing book is another one heavily affected by government inertia. Even the public school
textbooks are being produced in the Asian market, so, it is
another market into extinction, and other industries sector will be in the same
way.Another
interesting point is that the unemployment rate was close to 4.6% in
last December, and it means a full employment level, and it is positive news, however, due of the lack of education investment, there is no manpower avaliable restricting the
expansion of business, so how the GDP will grow?
Inflation,
low interest rates, exchange rate control and lack of infraestrucuture investment is against our needs for long-term growth, but I will leave this
analysis for the economists,
In my point of view, this 2013 GDP growth is totally dependent on what happens in the
international market, than in what happens domestically, but the news from European countries and from the United States are not the best.
At this point, my adviser for
businessmen, entrepreneurs, investors, and everyone in general, is to look inside the organization, look to be more efficient, innovative and have strong cashflow control.
A happy 2013 to everyone!
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