Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
BRASIL Las Realidades de una Nueva Etapa de Desarrollo Prof. Aloísio Araujo EPGE/FGV - IMPA Growth GDP Growht Rates in 1930-2000 8 7 6 5 4 3 2 1 0 1931-50 1951-80 Brazil 1981-93 Latin America 1994-2000 World Income per Capita of Korea / Income per Capita of Brazil Growth Rate Decomposition Mankiw, Romer & Weil’s Decomposition Y=AKHL1-- TFP = GDPGrowth – 0,3* CapGrowth –0,5*SchoolGrowth – 0,2*LaborForceGrowth Human Capital Quantity of Education Latin America and the World Quantity of Education Brazil is Getting Better Quality of Education Barros (2001): Quantity vs. Quality Relationship between Growth Rates and Years of Schooling and Scores in International Standardized. Correlation between Growth Rates and International Tests Scores is much higher than between Growth Rates and Years of Schooling. Quality of Education: Brazil Quality of Education: Brazil & Latin America Student’s grades from the First International Compared Study (UNESCO) Mathematics Results from Third Grade Mathematics Results - Third Grade Peru Rep. Dominicana Paraguay Colombia Brazil Cuba 0 50 100 150 200 250 300 350 400 Student’s grades from the First International Compared Study (UNESCO) Mathematics Results from Fourth Grade Mathematics Results - Fourth Grade Peru Rep. Dominicana Paraguay Colombia Brazil Cuba 0 50 100 150 200 250 300 350 400 Wage Inequality: Brazil and United States Income inequality in Brazil is mainly due to education inequality Education Inequality is Deaceasing for Youngsters (13 years of age) Source:A Agenda Perdida, 2002 Credit Credit to Private setor (1998) Investiment Chile and Mexico are very similar Investments as a Percent of GDP Government Surplus as a Percent of GDP Source: Kehoe et al., 2002 Private Credit as a Percent of GDP ... However, they differ on Credit and Growth Real GDP per Working-Age (15-64) person detrended by 2% per year Index of Real Wages in Manufacturing Source: Kehoe et al., 2002 Structural Reforms Already Done StateBanks Privatization Telecommunication Mining, Steel Electricity (?) Water and Sewage (?) Fiscal Responsibility Law Renegotiation of Municipal and State Debts Income Redistributive Policies Bolsa Escola to avoid child labor Early Childhood Education Erradication of illiteracy Adult Education Young adult (Supletive) University Quota for Blacks? Zero Hunger Program Structural Reforms: To Be Implemented Independence of Central Bank Retirement System Tax Law Labor Regulation Bankrupcy Law Current Negotiations with State Governors Retirement System • Increase the minimum age of retirement: women from 48 to 55 and men from 53 to 60 • Tax on the pension of retired workers with higher salaries • Create conditions for development of pension funds for public employees Tax Law • Diminish the tax on labor and increase tax on consumption descrease degree of informality in the labor market •Diminish tax distortion New Bankrupcy Law (Chapter 11) • Maintain current “concordata”, a pre-package convenient for small and medium business • Allow for broader scope of negotiation in other cases • Create creditor´s comittee to avoid hold-up problem • Mitigate priority (labor and fiscal) problems • Mitigate sucession problems • Incentivate debt-equity swaps (?) Final Comments Flexible exchange rates and serious macroeconomic policies (high interest rate and increase in primary fiscal surplus) led to fall on “Brazil Risk” from 24 to 13 Further decline depending on new reforms which are, however, politically difficult to implement Once economic growth resumes, decline on Debt/GDP ratio will allow long run sustentability of government debt and further decline expected