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UNGOVERNED BRAZIL

Fernando Alcoforado *

Brazil has nowadays declining in economic growth with a tendency to stagflation, rising inflation rates, very high tax burden, increasing debt of public machine, precarious infrastructure of transport and energy, failure of public education and health services, threat of deindustrialization, logistical bottleneck, precipitous drop in the trade balance and the high rate of corruption. Brazil has also problems in innovation that is not fully developed in Brazil because it depends on the failed education system of the country that is unable to generate knowledge. Due to the deficiency of the education system in Brazil, Brazilian companies such as Natura, Vale, Embraer and others that effectively develop innovation seek knowledge, research and personnel to meet this demand in major American universities like MIT.

The lack of strategic vision and managerial incompetence are major brands of Brazilian governments in Brazil's recent history, particularly the Dilma Rousseff government. Brazil operates as a "Titanic" going toward the "iceberg" of depression without their commanders take appropriate action to avoid disaster. All this happens as a result of the incompetence of the federal government that has not been able to outline a strategic plan for the development of Brazil. Brazil has been governed for decades by incompetent people without vision and without effective strategic perspective of sustainable growth for the country. Brazilian government's inability manifests itself not only in solving problems of today, but especially by compromising the future the nation.

To overcome the current problems of Brazil and promote its development in the coming years urges the development of a strategic development plan for Brazil contemplating the adoption by the Brazilian government's new economic policy focused on encouraging industrialization to substitute imports, moving producing in Brazil which is imported from abroad, thus contributing to stop the accelerated process of deindustrialization of the country. This action would also help to reduce spending in Brazil with foreign imports, thus contributing to reduce the deficits that have are occurring in the trade balance and balance of payments on current account, as well as increase the generation of employment and income in the domestic market.

The emphasis on the domestic market is absolutely necessary because Brazil cannot stay dependent on export revenues, especially from China that is experiencing a slowdown in its growth and the world economy is in recession toward depression. With the downturn of the world economy, the foreign trade of Brazil is already deeply affected. The expansion of the internal market depends, however, the increase in public and private investments aimed at promoting economic growth. Public investments have been insufficient because the government saving is low due to excessive government spending and the high commitment of its budget by almost 50% with the payment of public debt. Private investment is also low because much of the private saving is directed toward financial speculation thanks to high interest rates prevailing in Brazil and excessive tax burden (36% of GDP).

To increase savings in public sector, the government needs to renegotiate the payment of domestic debt for a certain period of time with its creditors, and the other, to make your current expenses are reduced dramatically to have resources to carry public investments, especially in poor economic infrastructure (energy, transport and communications) and social (education, health, housing and sanitation) with conducting

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a thorough reform of the state and public administration of the country, for example, the reduction drastically of the number of ministries and commissioned positions occupied by supporters of the current government. To increase private saving, the government needs to adopt a policy of low interest rates and dramatically reduce the tax burden.

To promote the economic development of Brazil should be adopted in each region the model of endogenous development that emphasizes the need for each regional society lead and drive their own regional development, conditioning the mobilization of productive factors available in its area and its endogenous potential with the support of the federal government, state and local governments and with the effective participation of the private sector and organized civil society. The contribution of endogenous development model is to identify in each region its economic potential and which factors of production are currently crucial to the development process. The model of endogenous development strengthens the social self-organization and encourages the practice of collaborative solutions to common problems.

The federal government's action in raising levels of employment and combating poverty should be centered in the effort to contribute to the economic expansion of the productive sectors of each region of Brazil as well as in pursuit of public investments in infrastructure, energy, transportation, communications, education, health, housing and sanitation which results in raising the level of employment and income in all regions of Brazil. It is a great mistake to fight against poverty with a program of income transfers such as “Bolsa Familia” as it is doing by PT governments.

All these actions will be successful only if a thorough reform of the administrative machinery of government with the administrative decentralization of the federal government through the creation of regional structures that enable the integration of the actions of federal, state and local governments in promoting the development of each region in Brazil. Conducting a thorough administrative reform of the Brazilian state could also contribute to the fight against inflation by reducing the tax burden on businesses and workers. Therefore it is up to the Brazilian people demanding the future president of the Republic to implement structural changes needed to reverse the current deplorable situation of the country and give a direction to Brazil to meet the interests of the population.

* Fernando Alcoforado , member of the Bahia Academy of Education, engineer and doctor of Territorial Planning and Regional Development from the University of Barcelona, a university professor and consultant in strategic planning, business planning, regional planning and planning of energy systems, is the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011) and Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), among others.