BRAZIL: POLITICS CANNOT FORGET THE ECONOMY

That Brazil still has great potential and continues to be a shelved power, is no longer a novelty.

Whereas the political crisis plagued Brazil since 2014, the South American giant has lost perhaps the best chance to change from an emerging country to a developed global power. As is well known, emergent is not synonymous with sustained development, equal opportunities or even a uniform social welfare.

We keep living in a miserable political environment, with President Michel Temer surviving several political "earthquakes" of accusations - corruption and criminal organization - promoted by Rodrigo Janot until recently the Commander of the Attorney General's Office.

Yet, as the “Global SProspective” has repeatedly pointed out, the political swamp in which Brazil finds itself, goes from the President to all political and economic quarters, and doesn’t suggest a bright future in the short term.

In any case, the present scenario thoroughly outlined by Temer, will surely finish his term.

Once the global environment remains favorable to emerging markets, it is essential Brazil continues pursuing its potential growth by adopting an agenda of economic adjustments and structural reforms. The same has happened with other countries, such as Mexico, Argentina or India. However, Brazil can’t always count on the benefit of a favorable international context. It is crucial that the country considerably improves its policy framework so as to proceed the reforms.

Any emerging country has only a dynamic economy if it can at least stabilize its political-partisan quarrels. Surprisingly, Brazil has been able to evolve economically, despite the steady political embarrassment. Despite the proliferation of legal charges against many political figures, the government has been able to approve some measures that tend to boost the dynamism of the country's economy.

Therefore, it’s imperative to solve the most pressing political problems and then deal with some of the well-known problems, such as fiscal imbalance, inefficient tax structure, excessive tax waivers, very high wages in some public sectors, fragile educational system, widespread corruption and excessive state intervention in the economy.

Ultimately the, approval of a broad-based political reform in Brazil in the coming years is crucial, including also a reorganization of the electoral legislation. Only this way we may winess a more dynamic economy, which can never be disconnected from its eternal foundation: Politics.

 Miguel Verde - Senior Consultant, Professor of International Relations