Source: Conjuntura Econômica - RJ - 26/08/2009

To face the crisis, the government adopted a prescription for tax relief and credit supply. Now, the Minister of Planning, Paulo Bernardo, announces a package of measures to reduce bureaucracy. Guido Mantega, from the Treasury, revealed his intention to reduce the cost of the payroll resulting from taxes and contributions. They do very well. At the meetings of the Economic and Social Development Council (CDES) in November 2008, still in the heat of the events of the international economic crisis, I presented a brief paper suggesting that Brazil should adopt exactly the three-point recipe it is applying to face the crisis: less taxes, more credit and less bureaucracy. Evidently, it was the obvious way to go and many people also believed that it was the best way. The government went in that direction and the results, given the size of the problem, are good. But it is not enough.

Initially, it should not be believed that the resumption that has taken place and expectations that the world will grow back in the 2nd should represent the suspension of such measures, so that everything will be as it was before the crisis. The government and society must understand that it is essential to consistently and permanently reduce the Brazil cost that weighs on private investments in the country. With less taxes, more credit and less bureaucracy, Brazil will take off inescapably. Evidently, in a poor and needy country like ours, the tax burden plays an important role. It feeds essential programs and investments and can, if used properly, reduce imbalances. However, this is not how it works in practice. Lack of credit, tax burden and bureaucracy bind entrepreneurship and hinder development.

Scenarios

The consolidation of the resumption of post-crisis economic activity imposes the maintenance of the measures adopted by the Brazilian government in the crisis and the edition of others, more daring. The way of reducing tax and reducing bureaucracy is essential. Even if business, as Betânia Tanure, from the Cabral Foundation says, “cannot be driven by the crisis”, the truth is that the crisis establishes a new scenario for business. As everyone knows, our load is poorly distributed and unfair. Aspects that can be fixed by the government without the much talked about and distant tax reform. As has been proven, at the time the crisis hit, the government carried out a mini-tax reform by reducing taxes. And you shouldn't stop there. The tax reduction must be forever and agreed with the private sector in order to prevent it from being passed on to prices.

One of the ingredients of the new scenario and the government's more aggressive attitude in favor of the business world. The authorities know that whoever sustains President Lula's popularity and economic stability and job preservation. Above all, private employment. At the same time, the “less tax-more credit-less bureaucracy” tripod goes in the right direction to pave the way for a consistent recovery. You must not fall into the trap that problems are already solved and everything can work again according to the rules of the past. In the economic team, there are those who defend conservative attitudes of greater collection and more state intervention in the economy. Some want to eliminate the exemptions as soon as the economy starts running again at full throttle. It is not a good solution, the setback can take energy from the resumption and put Brazil on the path of growth

Precariousness

More intervention and more tax burden place the responsibility for growth in the hands of the government. It is not good. Take the example of the Growth Acceleration Program (PAC). Even though it was a government priority, it took off in a precarious way. It comes up against bureaucracy and state incompetence. Despite conflicting versions of the execution, only 3% of the program was carried out until December 2, 8, including works under the responsibility of the states and municipalities. What is certain is that the inconsistency in carrying out government programs is widespread, with rare and honorable exceptions. For example, according to a report by the Brazilian Airport Infrastructure Company (Infraero), obtained by Correia Braziliense (111july / o9), many airport works are delayed. Some of them in cities that will host World Cup games. According to the report, there would be a delay in at least 16 works with a total budget of R $ 3,69 billion. According to a survey carried out by the newspaper, Infraero would invest R $ 2,8 billion by the end of the 2st. However, there is only a budget for only R $ 1 million. Improving the performance of government action appears to be essential.
Assessing our situation in the middle of 2oo9, we see that Brazil is escaping the 2oo8 crash with some scratches, in a much better situation than the other countries in the region. And with excellent prospects ahead. The future that opens for us can be bright. The success seen from the Real Plan may be modest in the face of the opportunities that are opening up. Especially if we learn - in its scope - the lessons of the crisis and our past of inconsistencies and deviations: less taxes, less bureaucracy, more credit, better regulation, more freedom to invest and more state competence. From these six procedures and with greater and better investment in education and technology, Brazil's immense potential had been realized in an exuberant way. In such a way that it will be able to compel us and review fundamentals such as the size of the tax burden, the exchange rate policy and foreign investments in the country, in view of the volume of foreign exchange that may contribute here. Finally, the map of success - based on the variables known today - seems clear. Furthermore, by adopting some of the measures mentioned here, we will be reinforcing our comparative advantages, which is the most adequate recipe at the moment to reduce the uncertainties and pitfalls of the future.
Brazil will be realized with less taxes and bureaucracy, better regulation and more credit, freedom to invest state competence