Top 10 Things Brazil must improve – 2. Remove Trade Barriers

protectionismProtectionism and why it is a steaming pile.

It is a tradition among countries with economies run by paranoid idiots to try to protect domestic economic activity by imposing unfeasibly high import duties on foreign goods, long long after it is needed (if it is ever needed at all). The conversation goes something along the lines of

“Let’s protect our fledging industries from those big nasty foreign companies who can do things twice as fast at half the price to a better standard.”

“Uh, okay, Boo-Boo.”

RV-AM454_LATINA_G_20140103182151Sadly, the result is invariably very far from what is intended: a country full of hopelessly inefficient, ineffective, uneconomic, corrupt, lame ducks. They feed off the state, pass back bribes to those who patronize them, and extort money from a public that knows no better and has no choice. Meanwhile the rich (those who own the companies and the politicians that support them) don’t care because they can swan off to wherever they want and smuggle in quality products from abroad.  What a way to run an economy. Unfortunately it is currently the Brazilian way, and the trademark “Industria Brasileira” is the consumer’s guarantee of utter rubbish at stupidly high prices.

What does one do?

shoot

Official Brazilian Economic Policy

One gets the Hell out of the Mercosul, for a start, which is just a Latin American club developed by rich, corrupt political regimes to guarantee their kickbacks ad infinitum (or until their people finally wake up to what is going on) and perpetuate their fundamentally unsustainable economies.

Once out of Mercosul, trade barriers should be substantially eliminated, and ONLY those which are genuinely designed to ensure fair play should be reinstated.

That’s it – all very simple, in essence. It would of course decimate the useless Brazilian industries, but it would be like scything through the weeds, leaving a level playing field for genuine entrepreneurship and the development of good businesses (whoever develops them – be it Brazilians, Americans, South Koreans or Eskimos). It might even encourage the so-called “first world” businesses (who sell their shares on the basis of their ethical policies, while selling tat at an overprice to developing countries to pay for the discounts they are forced to give the more demanding first world consumers – Ford, Electrolux, Nestle etc – they are all guilty) to become more ethical  – who knows? The end result will be a healthier economy and a huge incentive for people to get educated and get to grips with the real world that turns on the other side of the glass bubble.

An added benefit  – one of many – would be the elimination at a stroke of all the corrupt, inefficient, expensive and wholly unnecessary industry that surrounds the policing of the corrupt, inefficient, expensive and wholly unnecessary protectionist barriers which drag at the feet of all Brazilian businesses and crush any genuine entrepreneurship that might show signs of springing up.

A clear case for “Just do it.”

See the original Top 10 Things Brazil Must Do.

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