OECD suggests more investment and trade integration for Brazil

The organization found that investment stood below 20% of the country

Published in 28/02/2018 - 17:53 By Mariana Tokarnia and Kelly Oliveira report from Agência Brasil - Brasília

Brazil needs to boost investment in order to grow, said Angel Gurría, secretary-general at the Organization for Economic Co-operation and Development (OECD). A report released today (Feb. 28) shows that the country ranks low among the country members and partners.

On the list of OECD countries, Brazil ranks fourth from the bottom up for investment compared to the gross domestic product (GDP), considering figures from 1990 to 2016. During this period, investment in the country stood below 20% of its GDP.

Brasília - O secretário-geral Organização para a Cooperação e Desenvolvimento Econômico, Angel Gurría, durante o lançamento do Relatório Econômico da OCDE de 2018 sobre o Brasil (Marcelo Camargo/Agência Brasil)

Angel Gurría, Secretary-General at the Organization for Economic Co-operation and Development.Marcelo Camargo/Agência Brasil

Investment has been on the wane since 2013 and reported as comparatively low. “Today's investment is tomorrow's growth. A low investment rate today means that the potential growth tomorrow will decline,” Gurría remarked.

Also, more investment is believed to raise the potential growth in the economy and strengthen the increase in productivity, making room for pay rises without bringing the competitiveness of domestic products under risk.

Expensive money

OECD noted that the difficult access to funding and pricy credit are the main obstacles for investors in Brazil. The organization also mentioned the need for other sources of funding in the credit market, now controlled by the Brazilian Development Bank (BNDES), in charge of 53% of the loans for infrastructure—still too little for future needs.

“BNDES could evolve, and cease to be the main source of funding for infrastructure in Brazil and become a catalytic agent for the mobilization of private capital, also overseas. To demand private funds in BNDES loans is a way to get private creditors involved.”

Commercial opening

Gurría added that Brazil is less integrated with the global economy than other emerging economies with the same bulk. “The major economic obstacles keep Brazil from enjoying several benefits of a global economy more and more integrated,” the document says.

Created in 1961, OECD brings together developed economies, like the US, Japan, and EU countries, and is usually thought of as “a club of the rich,” despite the entry of emerging economies. Country members total 35. Brazil has observed the group's activities since 1994 and filed an admission request in 2017.

Translated by Fabrício Ferreira

Fonte: OECD suggests more investment and trade integration for Brazil

Edition: Lidia Neves / Nira Foster

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