Ruchir Sharma on Brazil

Today the average Brazilian income is about 16% of the U.S. average, with basically no gain for 100 years.

Even more striking, since the mid-1980s Brazil has seen its GDP growth rate track commodity prices more closely than any other nation in the world. Brazil’s fortunes are so closely tied to the global commodity cycle in part because so little works inside the country. The private economy does produce some internationally competitive companies in auto parts, aerospace and other industries, but they thrive by dodging a growing bureaucracy that smothers the rest.

Spending by local, regional and national governments amounts to 41% of Brazil’s GDP, the largest for any country in its middle-income class, and a scale close to those of much richer European welfare states such as Germany and Norway. Brazilians face the heaviest tax burden of any emerging country, with collections amounting to 35% of GDP. The widespread sense that they get a lousy return in public services is another reason for mass protests against Ms. Rousseff.

Here is the WSJ piece.  Ruchir has a new book coming out on emerging economies, The Rise and Fall of Nations: Forces of Change in the Post-Crisis World.  I have not yet read it, but it is surely of interest.


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