What will be the final tally?
The press reported today that 119 thousand jobs were lost in March. It’s the worst March figure in 25 years! The economy continues to shrink and it would appear that it is doing so at an increasing rate of speed.
For the first quarter of this year the number of jobs lost was 319 thousand and for the year ending 31 March, 2016 the total is 1.85 million. The only sector hiring in March was the public sector that added 4.3 thousand new jobs. (That, of course, matches Dilma’s “statist” model but does not make a whole lot of economic sense!!)
I have not seen any figures that estimate the total cost to Brazil of the corrupt schemes uncovered by Lava-Jato and other investigative efforts. It has to be a very impressive number. Multi-million dollar schemes have been uncovered in a wide array of government programs.
One of the most disgusting is one uncovered in the São Paulo school lunch program. For many students from very poor families, this program represents the only complete meal a child will have for the school day. It takes a “very special” mindset to steal the lunches of poor children! (Just a personal observation!)
If one considers the Petrobrás financial scandal and the unreported alleged scandals in the BNDES, Eletrobrás, et al. in addition to the plethora of misappropriations at the state and municipal levels, it is not unreasonable to presume a figure that could approximate 10% of GDP – Brazil’s current investment rate. You can be sure that the money is not re-cycled locally except in the form of the construction of luxury homes. Most winds up in US and European shopping centers and resorts, and offshore bank accounts so it represents a net loss to the country.
Perhaps some enterprising economist or accountant will eventually pull all of the numbers together to estimate the amount of “shrinkage” of Brazil’s production potential.
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