Brazil falls in competitiveness ranking


Author: Maria Cristina Frias

Source: Folha de S. Paulo, 01/11/2007

Brazil fell once again in the Global Competitiveness Report 2007-2008 of the World Economic Forum, released yesterday. This year, the drop was six positions, from 66th to 72nd, among 131 countries. According to the methodology used last year, when the analysis covered six countries less, Brazil would have declined two positions and would be in the 68th position.

The weight of the tax burden, the large spread of interest rates, bureaucracy and inefficient public spending are the indicators in which the country is getting worse.
The list is led by the United States, followed by Switzerland and Denmark. Brazil continues to lag behind countries like Azerbaijan (66th) due to the same deficiencies that hinder the country's competitiveness pointed out several years ago.

Brazil has the highest tax burden among all 131 countries evaluated.
In the indicator “average interest rate spread” - difference between the average rates at which banks remunerate funds raised and those they charge when lending to customers-, it only loses to Zimbabwe, which has an unbelievable 293,1% according to IMF data.

In the “inefficient government spending” indicator, Brazil ranked 127th, in the item “bureaucracy”, 128th. With respect to politicians, there are only five countries in which public confidence in their representatives is less than in Brazil. The quality of primary education is at 120º - there are only 11 most deficient countries in this regard -, and the complex and inefficient legal system guaranteed the 105th place in this indicator.

Despite advances in the economic field, such as falling inflation, and the best assessment of the country by risk agencies, the macroeconomic and institutional environment areas are considered the most critical.

The Brazilian public debt was in 99th place, and inflation, in 61st. The country continues to demonstrate good performance in indicators considered "more advanced", such as business sophistication (39th) and innovation (44th).

The report prepared by the forum, a private institution based in Switzerland, assesses 12 main pillars, such as macroeconomics, institutional environment, sophistication of the financial market and business. In each of these pillars, there are several sub-items. The classification of countries is based on statistical data and a survey of 11 executives in 131 countries.

The Brazilian economy appears behind Chile (26th), which continues to be the leader in Latin America, China (34th), India (48th), Mexico (52nd) and Russia (58th).

Government does not comment

Sought by Folha, the Ministry of Development, Industry and Trade said it would not comment on the survey made by the World Economic Forum. The report also contacted the Treasury, but there was no response until the closing of this issue.