5% of Brazil’s GDP Goes on Red Tape and Then You Have Corruption

A survey by the Rio de Janeiro American Chamber of Commerce, in Brazil, found that 66.7% of the two hundred businessmen interviewed said that corruption has increased in Brazil recently. And 68.4% of those interviewed said corruption has had an effect on their businesses.

Out of those interviewed, 66.1% said corruption was more prevalent at the federal level, with 50.3% saying it was more present in the executive branch.

A majority (56.5%) expressed doubts about the Congressional Investigative Commissions (CPIs) reaching satisfactory conclusions with a resultant decrease in corruption. And 51.4% said they believed illegal financing schemes (caixa 2, slush fund) would continue to operate during the next elections.

The vast majority of those interviewed (75.1%) said the way to halt corruption was with more severe punishment. Others (57.6%) said authorities should not have legal privileges (such as special courts) or be allowed to resign to escape punishment.

Reducing Bureaucracy

On Tuesday, October 11, a work group composed of lawmakers was set up in the Brazilian Senate with 30 days to submit legislative proposals to reduce the country’s excess of bureaucracy.

According to the World Bank, Brazil is the world’s fourth most bureaucratic country. It is estimated that around 5% of the Gross Domestic Product (GDP) is wasted on bureaucratic red tape.

The group, which is presided by senator Fernando Bezerra, from the PTB party of Rio Grande do Norte state, will study ways to unify and simplify the laws regulating the opening and closing of firms, as well as proposing measures for tax simplification and the debureaucratization of government services.

Opening a firm in Brazil generally take 152 days, three times the global average.

ABr

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