Slice of the informal economy in Brazilian GDP grows in 2016, says study

photo-informalityThe participation of the informal market in the Brazilian economy grew again in 2016, reflecting the economic crisis in the country, which has affected formal employment, according to a survey released on Monday.

The so-called underground economy - production of goods and services not reported to the government deliberately - reached 16,3 percent of GDP, against 16,2 percent in 2015, according to a study carried out by the Brazilian Institute of Ethics in Competition (ETCO) and the Brazilian Institute of Economics at Fundação Getulio Vargas (FGV / IBRE).

Comparatively, the participation of the informal economy in GDP exceeds that of the Northeast (12,3%), Midwest (9,5%) and North (5,8%) regions.

In nominal terms, the informal market moved 983,283 billion reais in 2016, compared to 956,96 billion reais in the previous year.

According to FGV / IBRE researcher, Fernando de Holanda Barbosa Filho, responsible for the study, the informal market is also affected by the crisis, but, as it manages to dampen a little more than the formal market, it has increased its relative weight in the economy .

"The crisis disturbs everyone," Barbosa Filho told Reuters, adding that this worsening should stop when the economic crisis in the country passes.

For now, however, the signs are not optimistic. The IBGE announced last week that Brazilian GDP shrank 0,8 percent in the third quarter compared to the previous three months, in the seventh quarter followed by contraction and with the biggest retraction in the year on this basis of comparison.

In the same vein, the Ministry of Labor's General Register of Employed and Unemployed (Caged) showed that 751.816 formal vacancies were closed in Brazil in the first ten months of the year, in the adjusted series.

(By Paula Arend Laier)

Reuters - 06/12/2016


Details of companies that are part of the informal market

27/11/2012 - Details of companies that are part of the informal market

[iframe width = ”600 ″ height =” 490 ″ src = ” ″ frameborder =” 0 ″ allowfullscreen]

Clipping Type: TV
Subject: Miscellaneous
Date: 27/11/2012 - 08:12
Broadcaster: Rede Globo de Televisão
Program: Bom Dia Brasil
Duration: 00:05:17

Fight against piracy is insufficient, says minister

O Globo Online - 18/10/2011

The fight against piracy in the country is below what is necessary, according to the Brazilian government itself. The deficiency was pointed out by the Minister of Justice, José Eduardo Cardozo, when commenting on the challenges to curb activities such as counterfeiting and smuggling during the seminar “Informality and its impacts on society”, held yesterday at the headquarters of GLOBO by the Pharmaceutical Industry Association Research (Interfarma).

- We already have a great synergy between Anvisa (National Health Surveillance Agency), the Ministry (of Justice), the Federal Police and several government agencies. We have positive results, but they are still far from what is desired and necessary - he declared.

According to the minister, when piracy affects the production of medicines, the harmful effects of informality affect not only the economy, but also the health of the country.

Cardozo also stressed the need to protect borders and invest in educational actions with the population:

- We need to identify, for example, why Brazilians buy a pirate medicine, and do a job of raising awareness about the risks of this habit.

Most of the event's debates focused on this area, which had worrying data revealed by the survey “Informality in the purchase of prescription drugs”, ordered by Interfarma from Ibope. In the survey, 6% of Brazilians admit buying medicine from street vendors. In the North Region, however, the percentage goes up to 18%. The survey also showed that a fifth of respondents admitted to buying medicines without a prescription, which is even more common in capitals and the Northeast.

- A country in which 70% of medicines are sold without a prescription is more vulnerable to the sale of medicines of dubious origin. From our apprehensions, we realized that most of these drugs reach consumers through pharmacies. It is common to find stolen cargo and counterfeit drugs in these establishments - said the director-president of Anvisa, Dirceu Barbano, about another data of the research.

According to him, the remedies that suffer the most counterfeiting in Brazil are those that fight erectile dysfunction, in addition to anabolic steroids, slimming pills, abortion drugs and herbal medicines.

For the executive president of Interfarma, Antônio Britto, there is a lack of clarification for the population and greater inspection structure at Anvisa and other government agencies:

- Each has done his part. The problem is that the sum of what Anvisa and the ministry can do is little compared to what is necessary.

Barbano admitted that there is a shortage of staff, especially in the intelligence sector: - These crimes often occur in an organized environment. Dealing with the smuggler in a country that has 17 thousand kilometers of border requires a lot of intelligence work. We also want to complete the project that will allow us to track each medicine package until the consumer arrives.

It will have codes that absorb information along the drug's production chain.

According to the president of the National Forum against Piracy and Illegality, Edson Vismona, Brazil fails to raise R $ 40 billion a year as a result of counterfeiting and smuggling.

During the seminar, Senator Humberto Costa (PT-PE) presented his bills to curb the falsification of medicines in the country.

Dilma faces challenges before taking office

Source: Jornal do Comércio - Porto Alegre / RS - 08/11/2010

Expectations abound and there are no doubts about the conduct of the future president Dilma Rousseff on topics considered priority by leaders of business entities and specialists

"They are already talking about more taxes." The outburst was made by the vice president of the metal-mechanic area of ​​the Rio Grande do Sul Steel Association (AARS), Sergio Neumann. When asked about projections for the future Dilma government, Neumann mixed expectation with mild unrest. “Wasn't it supposed to lower taxes? Now they talk about reissuing the CPMF ”, criticized the leader. For the business sector, the bet is that the new president will carry out the campaign promise to relieve production, such as investments and payroll. Dilma said she was not in favor of more taxes, but left the doubt by citing that there is demand from the governors.

The environment that prepares the future government combines a basket of ingredients: the prickly ones - interest, foreign exchange and public debt - and the most palatable and challenging ones - a heated economy and high social indicators, alongside the vacancy market.

Dilma in the Plateau and Tarso Genro in the State. Can the political combination help Rio Grande do Sul? The expectation is that qualities such as local innovation and greater weight in exports, mainly of industrialized items, will gain more space according to the conduct of macroeconomic measures. Therefore, the State is part of the country and will benefit from incentives that reach the entire economy.

FEE's technical director, Octavio Augusto Conceição, mentions that there have been coincidences in the past. Antonio Britto here and Fernando Henrique Cardoso, of which he was minister, in Brasília, but the economic environment was at the beginning of stabilization. But the fact that Dilma has established her career on Rio Grande do Sul soil naturally gives visibility. Colleague of the president elected at FEE, when Dilma presided over the agency between 1991 and 1994, Conceição, who held the same current position at the time, points out as a characteristic of the future president of the Republic the recognition of innovations. "She always said that something tested innovatively here is on a national level," recalls the economist.

The prestige can come, for example, by the choice of names of the gaucho businessmen or of the technical area for top tiers. The president of Fiergs, Paulo Tigre, has already been mentioned. The leader smiles and deceives when the subject comes up in this sector. "There is nothing. I don't talk about it ”, cut Tigre. The current president of ApexBrasil, Alessandro Teixeira, who coordinated Dilma's program, is another strong candidate, nominated for the future Ministry of Small Business. Conceição also mentions as characteristics of the ex-colleague the profile of manager and that the promise of responsibility with public expenses is one of its marks.

* with agencies

The Brazil expected in 2011

The stones on the way

Dilma Rousseff and President Lula unite against the so-called currency war, which would be waged between major powers, today the United States and China. For ESPM professor of International Relations Christian Tudesco, the floating exchange rate policy should not change, which has already been assured. "Those who have not adapted in the past five years are experiencing more difficulties", warns the expert, warning that the period served for many companies to use imports to cheapen investments in inputs and machines and gain quality.

• The exchange rate directly impacts the efficiency of exports of industrialized items, which face greater external competition and have the weight of the so-called Brazil cost. The result is that today commodities have gained space and manufactured products retreat. The dollar, which tries to balance itself at R $ 1,70, has fallen by around 20% since December 2008, when the external crisis was more acute. The current government triggers measures such as a higher Tax on Financial Transactions (IOF) to control the external flow.

• The net public debt, which may close at almost R $ 1,8 trillion, more than 40% of GDP, is the focus of concerns. FGV economist José Armando Castelar calls into question the promise of more social investments and the possibility of spending less. According to Castelar, costs have risen twice the percentage of GDP growth since 2005. The economist mentions that the highest collection, compared to growth of 7,5% in 2010 and 4,5% in 2011, has a limited duration.

• High interest rates, less than in past years, when the Selic rate reached 40% per year, but which increase the cost of credit. The former president-director of the Movimento Brasil Competitivo (MBC) and consultant José Fernando Mattos does not believe in a further decline, since the rate ends up being an instrument to hold inflation. Reducing public spending would be the first action to resume cuts. Castelar, from FGV, recalls that changing the Selic is a way of containing currency appreciation, but the fear is of price warming.

• External competitiveness and infrastructure: the so-called Brazil cost has a strong weight of the precarious structure or higher price of transport and taxes. World Bank report (Bird) places Brazil in 129th position in competitiveness for companies, considering factors of production to bureaucracy and taxes. Business movement creates committees to encourage innovation, which occupies less than 1% of GDP investments. Consultancy studies show that in the external dispute, in sectors such as steel, after matching production efficiency (Brazil is in second place, behind China), the position falls to fifth place among the biggest players due to the tax burden. The price rises by up to 40%. The government promises to create conditions for greater innovation. Christian Tudesco mentions that the impulse to small and medium-sized companies for export begins to have a differential with the promise of creating the Ministry of Small Business, whose name quoted to preside over it is that of the gaucho Alessandro Teixeira, current president of ApexBrasil. But the International Relations specialist warns that the portfolio will have to have instruments and an active role. “In Italy, MSEs account for 75% of foreign sales”, he compares.

• The reforms: leaders and experts hope that finally tax, social security and even labor reforms will be out of the way. The president of Fiergs, Paulo Tigre, considers that the themes must be guided by the government's start in 2011.

• Exemption from taxes on foreign sales and also on investments should be one of the measures, points out Tudesco. But the vice president of the Steel Association of RS (AARS), Sergio Neumann, argues that there is no point in relieving only what is export, since the tax cost on the sheet increases prices.

The assets that help

The data from the Employment and Unemployment Surveys (PED) in the largest metropolitan regions reinforce the thesis, with an increase in vacancies with a formal contract and retreat of the contract without registration. Rising economy irrigates the gas station market, drops unemployment rates to lower levels in historical series. Income also grows, fueling consumption. For Dilma, the problem must be serving the contracting market with qualified workers. Problem already registered in several sectors.

• Employment on the rise: President Lula fills his mouth to account for the 15 million formal jobs generated in his two terms. Dilma had this statistic in her favor in the election. Dieese economist Eduardo Schneider points out that Lula's actions since 2004 contributed to structuring the vacancy market, with an impulse to formalization.

• PED study in the Metropolitan Region of Porto Alegre reveals that the deficiencies in this area are more serious in civil construction, commerce and food services.

Schneider points to a public action to improve training and greater efficiency between the offer of posts in the National Employment System (Sine) and candidates. "Greater integration of these policies generates positive synergy for the proper functioning of the market", he warns.

• Infrastructure investments: Dilma's greatest ally will be the Growth Acceleration Program (PAC). Pac 1 promises to end 2010 with an investment of R $ 620 billion. The second edition will inject R $ 1,59 trillion, which will advance beyond 2014. By the end of Dilma's term, the government plans to spend almost R $ 1 trillion focusing on the World Cup. The World Cup and the 2016 Olympics appear as the two levers added to the pre-salt of the challenges for infrastructure and also for the supply of equipment by the national industry. In the division of the cake, energy will have R $ 1,092 trillion and housing, R $ 278,2 billion, with the flagship of the Minha Casa, Minha Vida program, with a new goal of building 2 million homes. The segment already generates the boom in civil construction, which in the State experiences a 12% increase in formal employment. The construction target will still fall short of the housing deficit, projected at 5,8 million units, more than 80% in the urban area.

Informality: Another channel to improve employment and boost the government's cash flow is to combat informality. FGV's Brazilian Institute of Ethics in Competition (Etco) calculated the flow of this sector at R $ 200 billion per year, which is measured by the Underground Economy Index. "The informal worker loses the protection of the law, the taxpayer pays more, the consumer is left with no guarantee of purchases and the good entrepreneur has an unfair competitor", sums up Etco's chief executive, economist André Montoro.

• Economic growth: the performance of the country, which should lead rates of 4% to 4,5% in the coming years and without inflationary fuel, is an unprecedented case in the history of the country, according to the technical director of FEE, Octavio Augusto Conceição. It is a legacy of the FHC and Lula governments that would be passed on and would be an asset regardless of the winning candidate, stresses Conceição. For the economist, stability was priced at low growth rates. The difference between Lula and FHC is that the PT bet on stability, but with an eye on the social. For the technical director, the actions of the future president should try to combine fiscal balance with demands in the social area. The improvement in infrastructure will also help in the overall efficiency of the activity.

• Social goals: one of the most positive balances of Lula's two terms of office - migration of the population from classes D and E to C and reduction of the contingent of poor people - will remain strong in the first years. The social goal of poverty eradication will mean more spending. Dilma has already projected that she wants to universalize Bolsa Família, which reached 12,7 million families this year, in addition to promising an increase. The minimum wage may also receive more impetus, anticipating the increase in GDP from 2010 to 2011, which would only be reflected in 2012. Proposal goes to union centrals. How to solve this equation is question number 1 for the new government, warns José Armando Castelar, from FGV. Once again it is the pressure of the public debt.