Brazil’s Senate on Wednesday, August 21, 2019, voted in favor of measures that would remove red tape in business operations.
Some of the reforms include an expedited process to open new businesses, waivers for some permit requirements, and a process that would allow for increased acceptance of digital documents.
Naturally, interests groups connected to the state complained about how these reforms would hurt labor rights and environmental protections. After all, many pro-intervention groups cannot fathom the idea of a society that is able to organize itself voluntarily.
Nonetheless, Brazil desperately needs such reforms. The World Bank’s Doing Business report puts Brazil in a mediocre 109th place out of 190 nations. Countries like Chile, Colombia, and Peru currently outrank Brazil in facilitating business.
According to a Wall Street Journal report, these new rules would allow small businesses such as hair salons and cafes to open shop before obtaining a host of previously mandatory permits. As a result, they will no longer need to wait as long as several months before starting up their businesses.
These measures are crucial for a country like Brazil, which is known for its maze of bureaucracy and unstable monetary policies, in trying to achieve its full potential. Disparities in wealth are rampant in Brazil, and the country’s bureaucracy has prevented many Brazilians of lower economic means from being able to set up businesses. Small business creation is often a strong mechanism of social cohesion and a viable way for the working poor to better their lot.
Many Americans take for granted the relative economic freedom they enjoy in contrast to countries like Brazil. The South American country never really had a classical liberal foundation and it has oscillated between decades of economic and political instability.
Previous governments under Dilma Rousseff and Lula da Silva went on massive spending binges and pursued monetary policies that put inflation above 10 percent; moves which have played a major role in the country’s current economic malaise.
Ideological flaws notwithstanding, Jair Bolsonaro’s election in 2018 has brought certain classical liberal ideas into the forefront of political discussion in Brazil.
For these ideas to remain relevant beyond Bolsonaro’s administration, Brazil will need both political ground forces and an intellectual class that is willing to defend and spread these ideas effectively.