During an event this week, the CEO of Goldman Sachs Brazil rated the country’s productivity indicators as “disastrous.” According to Maria Silva Bastos Marques, improving the efficiency levels of Brazilian workers is actually more important to the country’s development than reforming the legal framework of the economy.
As a matter of fact, a Brazilian worker produces 25 percent as much as an American one, according to research organization Conference Board. Part of the blame is on Brazil’s lackluster educational system, responsible for a labor force that is less educated and less qualified than those in developed nations. Economic isolation, however, might be an even greater factor.
Bureaucracy and regulatory barriers scare away foreign investors and limit the exchange of knowledge between Brazilians and the rest of the world. Compared to developed countries, Brazil doesn’t have many foreigners in the workplace. And that limits the flow of know-how and technology.
A closed-off economy also creates a system with limited competition. Big business in Brazil is often privileged by monopolies or oligopolies, which don’t create incentives for companies to invest in innovation and increase productivity. According to the World Bank, enhancing Brazil’s participation in global trade would generate...
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