The former president of the Central Bank and BNDES Pérsio Arida defended that Brazil opens its trade to the world and carries out State and tax reforms, in a speech during an event in New York, this Tuesday (15).
Speaking to businessmen, ministers of the Federal Supreme Court (STF) and authorities present at the Lide Brazil Conference, Arida stated that the country’s main economic challenge is to grow in an “inclusive and sustainable way” and regretted that Brazil has been disappointing in this regard.
The economist, who was one of the creators of the Real Plan, listed three necessary actions for the country to resume growth, starting with the opening of trade with the world.
“Brazil has to open up its economy, sign the Mercosur agreement with the European Union, join the OECD [Organização para a Cooperação e Desenvolvimento Econômico] and take the necessary steps to fully integrate into the world economy. This is also the way to be more productive and attract more capital to Brazil”, said Arida.
According to the economist, the idea of “cutting channels with the rest of the world makes no sense”. He is part of the economic team of the transition group of the president-elect, Luiz Inácio Lula da Silva (PT).
He mentioned Brazilian agribusiness as “our main example of success” because it has technology and is essentially focused on the foreign market. “This is our path. There is no economy that has developed in the world of emerging economies without being an open economy. Brazil is a closed economy,” he said.
When addressing State reform, Arida stressed that many changes cross cultural issues in the country. “Above all, in the way in which the State is managed”, he pointed out.
According to him, currently the State spends a lot, but spends poorly, and is “publicly perceived as inefficient”. In his assessment, it is necessary to review public spending to assess whether or not they make sense in the current context.
“There are layers and layers of expenses that many times have lost their meaning, are poorly focused, can be eliminated, reduced in a more efficient way without jeopardizing the quality of the service”, points out Arida.
He believes that Brazil should repeat the Spending reviewsa model applied in other countries to review expenses independently.
Arida also advocated for tax reform towards a “fairer” tax model. “Today it is a fact that taxation disproportionately hits the poorest,” he said.
“Brazil has a tax dispute that speaks for itself. The size of the tax litigation tells us that our system works badly. It raises a lot, but it works poorly”, highlighted the creator of the real plan.
For him, the reforms have already proved to be important for the growth of other countries. “If we look at Latin America, there is no reason for Chile to outgrow Brazil every year for the last 20 years. Except for the fact that Chile made reforms before Brazil”,
Arida mentioned that the country will face an adverse external scenario in 2023 due to the recession in the United States, with the rise in interest rates, and the economic difficulties in China.
Despite this, the economist pointed out that the country must have great ambitions. “I have not the slightest doubt that we can and must aspire to the highest level of economic growth”.
Source: CNN Brasil
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