By Rodolfo Fücher, president of ABES
In any other year after the presidential election, we would be experiencing what is commonly called a “honeymoon” (a period of no more than 6 months in which the new government and the financial market live a romance). This year, however, that relationship is ending too soon. Almost four months after taking office, it is clear that, if the Social Security reform is not approved, the country will face moments of great economic and political instability.
The pension reform is not only necessary to guarantee yours, mine and, above all, the retirement of the most needy people, and balance public accounts, but also to regain credibility in the Brazilian economy and market, after the worst recession period faced. in Brazil.
It is worth remembering that, currently, the world is going through a period of digital transformation (or 4th industrial revolution), whose focal point is innovation. Large economies and companies are investing massively in research and development to lead the way in pioneering 5G, IoT (Internet of Things) projects, Artificial Intelligence, among other disruptive innovations. Within this increasingly competitive global scenario, innovation, which generates new opportunities, new markets and forms of consumption, becomes a matter of survival for a developing country like Brazil.
However, in order to develop and put new ideas into practice, and be able to compete with large economies, there must be internal investments, but also fundamentally external ones. And it is at this point that pension reform will help ensure that the Brazilian market is more attractive to foreign investors. Brazil already has a deep-rooted problem of attracting investors due to regulatory and tax issues and, if the pension reform is not approved, this scenario will only get worse – who will risk investing in new ventures and startups in a country plunged into the worst crisis? of its history, with total lack of control of public accounts, no budget for new investments in infrastructure, health, education and the worst, with a very high unemployment rate?
The Global Competitiveness Report, released by the World Economic Forum in 2018, places Brazil in 72nd place in the competitiveness ranking and as one of the countries with the highest regulatory burden imposed by the public sector among 140 countries surveyed. The country was also considered one of the least prepared to adapt to the technological revolution.
The impact of this reform on Brazil's economic recovery and on foreign investments is clear. As soon as the period of instability and insecurity is passed and the period of instability is over, investors will once again be interested in innovations developed in Brazil, moving the flow of new money into the economy.
Pension reform alone will not be the key to all the country's economic problems, but it is certainly a key point. Added to the concrete actions of the new government to reduce bureaucracy, eliminate regulatory obstacles and, most importantly, to improve the efficiency and quality of public services, exploiting the benefits of technology, we can begin to envision a safer and more attractive environment for investments. .
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