Columbia Global Centers Rio de Janeiro, Brazil. Câmara Brasileira do Livro, SP, Brazil) The changing role of the state [livro elektronico]: Brazil in a global perspective / [organização]. Much of the concern created by COVID-19 focuses on massive disruptions in labor markets and beyond. Dean of the School of Public Policy, The London School of Economics and Political Science;.
Shotwell Professor, Global Political Economy and Director of the Center for Global Economic Governance, Columbia University;.
AN OVERVIEW OF THE WORLD
AND BRAZIL
AN OVERVIEW OF THE WORLD ECONOMY AND BRAZIL
A GLOBAL PERSPECTIVE Opening Remarks by Jacob Lew
In the case of the emerging markets, these economies were the last to be affected by the COVID-19 virus. Although GDP in advanced economies has fallen, stock market performance was quite positive in the US and Japan. In the case of Brazil, the Bovespa index has returned to levels that are actually higher than at the beginning of the 2020 crisis.
For Buiter, Europe must do more in both fiscal and monetary terms to promote the recovery of the countries in the region.
A FOCUS ON BRAZIL
Lisa Schineller pointed out the concerns of risk assessment agencies and pointed out that the volatility currently observed in most economies is not a positive development. For her, and focusing on Brazil, some of the current rating factors point to a less vulnerable position for the country than in previous crises. Vescovi pointed out that the Brazilian state already imposes a high tax burden, since about 40% of the economy is directly related to the public sector, there is a need for better management of public resources.
For her, these consequences could very well be a return to high levels of inflation and the weakening of the currency, both of which are major threats to the inflation-oriented regime.
STRUCTURAL
CHALLENGES AND THE GROWTH
AGENDA
STRUCTURAL CHALLENGES AND THE GROWTH AGENDA
Regarding economic growth in Brazil in recent decades, the high volatility of the growth rate has been a striking feature, according to Amann. This will result from the combination of the following elements: (i) low public investment and the resulting poor infrastructure in the country; between 1990 and 2016, infrastructure grew by only 27%, while GDP doubled; (ii) an uncompetitive business environment, with subsidies for specific companies and sectors that would otherwise be uncompetitive; (iii) complex tax rules, with different tax regimes in the individual subnational entities (states and municipalities). The growth observed in recent decades will lead above all to the incorporation of people into the economically active population, a process related to the rapid aging of the population.
THE CHANGING ROLE OF THE STATE: BRAZIL IN A GLOBAL PERSPECTIVE 22 Regarding obesity in the public sector”. This political orientation advocates greater trade openness and lower direct state participation in the economy. The opposite paradigm in Brazil, represented today by the Brazilian military, advocates greater government intervention in the economy.
This tendency makes the institutional order of the country unstable, a characteristic that seems to be present in the USA these days as well. Another type of government intervention is needed, designed to increase the productivity level in the Brazilian economy. Turning his attention to the Brazilian case, Svejnar underlined the peculiarity of his experience, originally discussed by Carvalho, in which recovery policies could reduce the country's poverty, albeit temporarily, in the midst of the pandemic.
This static rule is not clearly related to the dynamics of public debt and has not been applied in this way in any country in the world outside of Brazil. Canuto returned to the topic of the quality of public spending, noting that the increase in public spending in Brazil.
GLOBAL MONETARY CONDITIONS AND
IMPLICATIONS
GLOBAL MONETARY CONDITIONS AND IMPLICATIONS FOR THE EMERGING
ECONOMIES
Due to the interconnectedness of global financial markets, a potential increase in interest rates in the United States and an increase in spreads could have serious consequences for the world economy, especially for emerging countries. Thus, Seth concluded his opening remarks by indicating that there will be some volatility in the US monetary policy leaders have signaled that inflation and a possible overheating of the economy would not be something to face in the near term.
For him, It is not clear what will be done with monetary policy in the event that these risks are confirmed. For Goldfajn, the feedback to the global environment with broad liquidity and exit, in the Brazilian case, concerns the current and expected. Thus, the net effect of fiscal stimulus in the US on aggregate demand will be less than many imagine.
Guillermo Calvo predicts that the Fed will monitor a major fiscal effort in the United States; otherwise market interest rates would rise. Patricia then asked about the potential impacts of high levels of leverage in the non-financial corporate sector. Corporate debt levels have increased in almost every country in the world during the current crisis, which can affect financial stability in both emerging and developed economies.
This may be a concern in the future as the economy moves closer to its normal functioning. Seth Carpenter also expressed his displeasure with the current stance of monetary policy in the United States.
GLOBAL FISCAL
CHALLENGES IN THE POST-PANDEMIC
PERIOD
GLOBAL FISCAL CHALLENGES IN THE POST-PANDEMIC PERIOD
THE CHANGING ROLE OF THE STATE: BRAZIL IN GLOBAL PERSPECTIVE 36 is constitutionally mandated – it can be reduced. He noted that economists, such as Olivier Blanchard, argue that countries should worry less about the size of public debt if interest rates remain low. In addition, problems such as the regressiveness of the tax burden must also be addressed.
The operational reorganization of the public sector, as proposed in the administrative reform, should include a number of central measures. THE CHANGING ROLE OF THE STATE: BRAZIL IN A GLOBAL PERSPECTIVE 38 to the additional expenses associated with. This reduction in the interest burden on the debt helped pave the way for a significant fiscal expansion.
The relative success of the program made it feasible to reduce poverty and inequality in the country during the 2020 pandemic, a rather remarkable achievement. In conclusion, Trebat stated that the unprecedented context of the pandemic opens up new perspectives for thinking about fiscal policy orientation. Ana Carla picked up this theme from Brazil's political reform economy.
The autonomy of Brazil's central bank has recently been confirmed, which is another positive sign. Regarding the possible beneficial effects of the currency devaluation on the Brazilian economy, she noted that the only relevant expected effect would be an increase in inflation.
REFORMING LABOR MARKET AND
SOCIAL POLICY POST-PANDEMIC
REFORMING LABOR MARKETS AND SOCIAL POLICY POST-PANDEMIC
The failure of the economic model was made particularly clear by Brazil's hyperinflation in the 1980s. According to Fraga, the performance of the Brazilian economy in the last 40 years since the collapse of the import substitution strategy has been mediocre. Although Brazil has reduced social inequality to some extent, it remains one of the most unequal countries in the world.
Furthermore, he claimed that in the later period of the Cardoso administration, the Bolsa Família (a conditional cash transfer program for very poor families) was implemented. In Brazil, the issue takes on specific contours due to widespread informality in the labor market. In conclusion, Fraga argued that while there is a reform effort in the Brazilian economy, it is insufficient to significantly change the overall framework of the Brazilian economy.
This finding is supported by the very poor performance of the government in the health and protection of the Amazon. For him, one of the economic consequences of the pandemic in the US was an increase in the savings rate in the higher income strata of the population. Another aspect of the measures taken in the context of the current economic recovery that Stiglitz talks about is the increase in taxes on the upper income classes.
Salaries and job stability in the Brazilian public sector are in stark contrast to the employment situation of the majority of the Brazilian population. For her, this issue is the biggest concern for the revival of employment in the country.
PART II)
THE CHANGING ROLE OF THE STATE: BRAZIL IN GLOBAL PERSPECTIVE 52 work at a distance, and also lacked the basic. The third group is made up of the youth, who were also disproportionately affected in the 2008-2009 crisis. Regarding the recovery of the economy and employment, as the vaccination process progresses, the economy is expected to reopen.
From 2015 to the present, a strong deterioration of the labor market has been recorded, mainly due to two structural initiatives that drastically changed the Federal Constitution and weakened labor protection. Even in this earlier period, informality in the Brazilian labor market was about 36% of the working workforce. Added to this is the adoption of active labor market policy measures, such as qualification, training and retraining of the workforce.
THE CHANGING ROLE OF THE STATE: BRAZIL IN GLOBAL PERSPECTIVE 54 represents an increase in participation. However, the majority of the workforce, consisting mainly of women, youth and the poor, is not formalized or unionized. UBI would not be an appropriate solution in Latin America, as the level of public debt in the countries of the region is already too high.
He recalled that the period of the best performance of the labor market in Brazil in the early 2000s also coincided with the period of the greatest economic growth in the country and that the deterioration of labor market indicators was accompanied by the depression that followed immediately after. Furthermore, an expansion of public social services is inevitable due to the aging of the population in some Latin American countries, such as Brazil.
APPENDIX: VIDEOS OF EACH OF THE PANEL SESSIONS
AN OVERVIEW OF THE WORLD ECONOMY AND BRAZIL
STRUCTURAL
CHALLENGES AND THE GROWTH AGENDA
GLOBAL MONETARY CONDITIONS AND IMPLICATIONS
GLOBAL FISCAL CHALLENGES IN THE POST-
REFORMING LABOR MARKET AND SOCIAL POLICY
REFORMING LABOR MARKET AND SOCIAL POLICY
