Brazil Notes

Problems
1. Too many red tapes
- 10x longer to file tax returns, 2600 hours
- high freight charges (due to poor road infrastructure)
- high taxes (resulting in Peter Pan firms, refusing to grow up)

2. High crime rates
3. Inefficient school system, less than 50% of children leave schools educated, teenagers do badly in international tests
4. Poor infrastructure and public services (medical)
5. Bad pension system

Resulting in
1. low investment (18% of GDP in fixed investment)
2. 20bn spent on high end shopping abroad by rich Brazilians (due to high taxes), in Miami

Agri
1. Huge exporter - in top 3 for most of the 15 traded crops
2. No tariffs or subsidies
3. Very large farms - 1300ha vs US at 70ha
4. Decades of innovation and knowhow accumulation
5. Climate, soil and fertiizers
- tilling of acidic soil (due to lime in soil) and lots of fertilizers resulted in very fertile land for various crops

Reasons for poor Infrastructure
1. Cumbersome environmental licensing
2. Need private co.s to invest in infra (too few roads, rails, silos, ports etc)

Pension
1. 3% of GDP on survivor pensions vs OECD's 1% (resulting in 30 yr old wife able to live on 70 year old dead husband's pension)
2. 11% of GDP in public pension, one of highest in the world
3. Education budget is high but cannot produce results - due to high pension for teachers, teachers can retire early, get good pension and burden the system, new teacher pay is very low