Informality is on the rise again in the country
After a year of decline due to the pandemic, the Underground Economy Index returns to the upward trajectory started in 2015 and should continue to deteriorate
The informal economy has resumed growth in the country. This is what the new edition of the survey by ETCO and the Brazilian Institute of Economics of Fundação Getulio Vargas (FGV-IBRE) shows, which calculates the Underground Economy Index (IES) since 2003. This year , according to the study, the total of goods and services produced and sold in the country without the monitoring of official bodies totaled R$ 1,3 trillion, equivalent to 16,8% of Brazilian GDP and higher than the GDP of countries like Sweden. and Ireland.
The result represents an increase of 0,1 percentage point in the last year's Index and shows the return of informality to the upward trajectory that began in 2015. Until that date, IES recorded eleven consecutive years of decline, having fallen from the 21% level of the GDP in 2003 to the historic low of 16,1% in 2014. In that period, experts pointed to economic growth and measures to promote formalization, such as the Electronic Invoice and the Individual Microentrepreneur (MEI) regime, among the reasons that explained the fall in the Index.
The turnaround began with the 2015 recession and continued in the following years due to low economic growth and rising unemployment, which put pressure on companies and workers towards informality. In this sense, the significant reduction observed in 2020, when the IES fell from 17,3% to 16,7% of GDP, is considered a point outside the curve caused by the limitations imposed by the pandemic.
“The movement restrictions during the most critical months of the pandemic took people off the streets, significantly harming street vendors, app drivers and informal traders”, explains ETCO executive president Edson Vismona. “This population had its activity interrupted abruptly and this had a strong economic and social impact.”
Economist Paulo Peruchetti, from FGV/IBRE, recalls that the government has adopted several measures to protect companies and formal workers, such as the Emergency Employment Preservation Benefit (BEM). In the case of informal workers, Emergency Aid brought income, but did not support economic activity and work, temporarily reducing the underground economy.
Increase must continue
With the reopening of the economy, informal work began to grow again. “It's a job where the person has no guarantee, doesn't pay anything, doesn't have any assistance or social security, is an underemployed. We have to offer conditions for it to formalize itself and escape illegality”, says Vismona.
The expectation is that this movement will accentuate even more from now on. “Because it is more flexible, it is very likely that the recovery of employment will occur due to the stronger growth of opportunities in the informal labor market, which may lead to new increases in the underground economy indicator in the coming years”, says Peruchetti. .
The IES is calculated based on IBGE research on informality in the labor market and data on the amount of paper money in circulation in the country. The underground economy uses more money in its financial transactions.
"ETCO stands out in the ethical defense of competition and in strengthening business morals"
Tercio Sampaio Ferraz Junior, lawyer, has a doctorate in Law from USP and in Philosophy from the University of Mainz, Germany. Professor at USP and PUC-SP, he was attorney-general of the National Treasury (1991), executive secretary of the Ministry of Justice (1990) and legal director of Fiesp (1981)
"Everyday experience proves that people are influenced by the environment"
Luiz Fernando Furlan, businessman, former minister of Development, Industry and Foreign Trade (2003-2007), board member of BRF and Vivo, pro bono board member of various social, environmental and technology development organizations. Graduated in Administration and Chemical Engineering
"It is not possible to admit distortions caused by criminal and unethical practices"
Jorge Luiz Oliveira, lawyer with specialization in Business Law from UFRJ and economist with specialization in Financial Administration from FGV. He made a career in the fuel sector. Member of the Board of Directors of Etco between 2003 and 2018, he also works as a consultant for companies
"Ethics 'Capital' requires obedience to the pact between the public and the private"
Alexandre Kruel Jobim, a lawyer in Brasília, holds a Masters in Law from the University of Texas, in the United States, chaired the Brazilian Association of Soft Drinks and Non-Alcoholic Beverages (Abir) and was president of the Board of Directors of ETCO
"I am absolutely certain that ETCO will remain steadfast in its essential work"
Victor Carlos De Marchi, former CEO of Antarctica, is co-chairman of the Board of Directors of Ambev. He was also at the head of the National Beer Industry Union (Sindicerv). He was one of the founders of ETCO and chairman of the Institute's Board of Directors