Author: Antônio Delfim Netto

Source: DCI - São Paulo / SP - OPINION - 06/08/2010

In a recent comment, in the column that I occupy every Tuesday at Valor Econômico, I dealt with a topic that is usually avoided in the press, except punctually: excessive bureaucracy.

I tried to draw attention to the conclusions of a report prepared at the Department of Competitiveness and Technology of the Federation of Industries of the State of São Paulo (Fiesp) that takes care of the matter with very objective information and intelligent analysis.

The work produced by the Fiesp department has the title: “Bureaucracy: economic costs and proposals for combat”.

The text revives us to deepen the discussion of the problem that once again became one of the biggest obstacles to business expansion and economic development in Brazil.

In 2010, the World Bank index that measures the ease of doing business in 183 countries, places Brazil in an inglorious hundred and twenty-ninth place (129th), having as one of the main factors the high bureaucratic burden.

It is a work that must be read by all those concerned with the continued growth of our economy, and particularly, who knows, by candidates for the Presidency of the Republic.

It shows that the effects of high bureaucracy occur in all areas, impacting both the efficiency of the private sector and the quality of public institutions.

In addition, the work estimates the economic cost of bureaucracy, comparing the level that exists in our country with the average of a basket of selected countries, drawing two conclusions:

1) If Brazil reduced its bureaucracy rate by 0,3 points, reaching a level equal to the average (of selected countries) of 0,27, the country's per capita product would increase to US $ 9.147, that is, an increase almost 17% on the average for the period 1990-2008 (equivalent to 1,45% per year).

This corresponds to an average annual cost of bureaucracy estimated at R $ 46,3 billion, equivalent to 1,47% of GDP (2009 figures); and,

2) The annual economic cost of the bureaucracy of R $ 46,3 billion represented:

? 10,1% of private investment (GFCF - Gross Fixed Capital Formation, which measures investments) (2009)

? Almost 300% of private R&D spending (research and development) (2008)

? 2,8% of the manufacturing industry's net sales revenue (2007)

? 2,3% of final household consumption (2009).

The scenario observed in Brazil is one of immense bureaucratic excess that implies an extremely high cost, hindering the increase in per capita income, the growth and competitiveness of the country.

In this sense, the need to reduce bureaucracy in Brazil is urgent.

Such measures include:

1º) Simplify and unify procedures and regulations, establishing clearer and more objective rules, reducing redundant barriers and cross-controls; and,

2) To intensify the use of electronic means to improve access to information, increase the availability, accessibility and speed of services.

The process of reducing bureaucracy must be permanent, have a wide reach and facilitate the relationship of the State with citizens and with companies.

The effort must take place in the three spheres of state administration and in the legislative, judicial and tax systems, in order to increase the efficiency of the public sector, unlocking the country's economic development. Unfortunately this is not what has happened in Brazil.

The work ends with some practical and interesting suggestions in the same style as that of the great ex-minister of Bureaucratization, Hélio Beltrão.

No "revolution"! Persistent and stimulating improvement in the margin.

Unfortunately, everything that was done in the 70/80 years of the last century has been carefully deconstructed since then.

Brazil's current scenario is one of immense bureaucratic excess, which costs the country a lot.