Globalization and prices

Brazil is the largest food producer and does not have a large national supermarket chain. The country has one of the largest car fleets, but no local automotive industry. All this indicates that it is not only consumption that indicates the source of production, but also issues related to globalization.

In this vein, public, and especially private, prices in Brazil belong to an enormously shocking category when compared to the developed world.

Prices for cell phones, broadband, parking, medicine, food, tolls, laundromats, hotels—very little would be left to compete with foreign markets.

Many companies that exploit niche markets generate incalculable revenues in Brazil and easily remit these profits to their parent companies. Meanwhile, Brazilians, in addition to paying unparalleled taxes, also contribute to the economies of developed nations by paying taxes well above the average.

It's not without reason that many foreigners who arrive here immediately complain about the high prices. Not long ago, hotels in Rio were the target of government warnings due to prices that were unaffordable even for foreigners.

Trying harder and better to address the challenge of this issue, we need to understand the lack of real competition, the delay by CADE (Brazil's antitrust authority) in establishing transparency criteria, and the weight of the Brazilian State in catalyzing the high prices.

A bill currently being debated in Congress proposes to regulate the mandatory inclusion of tax values ​​on all products.

Furthermore, we also have PIS, Cofins, and the tax war, cascading taxes, and a myriad of difficulties, where essential goods are taxed more heavily than luxury goods.

However, in Brazil nothing can be questioned, because, in addition to the immense and intense bureaucracy that has plagued us for over a century, we also have a political class that is beyond reproach.

The radiography of globalization is a source of great challenges due to investments from funds that become incorporated into large companies and gain control, when fragmentation does not occur.

Brazilian household debt stems from three basic factors: lack of domestic savings, excessive credit, and high prices that become unaffordable with compounded interest.

Therefore, if the Brazilian government wants to stimulate consumption, it must first and foremost consider the fundamental rationale of the production chain and the prices it generates.

The paltry minimum wage of R$ 622,00, although it is acknowledged that very few people earn it, would not be enough to keep a person alive for a week in a large city, but the Brazilian State keeps postponing the issue and tries to demonstrate that social programs are inclusive, but, on the contrary, they are exclusionary, as they accommodate people and limit them to the crumbs predicted by the so-called governments of unity with the popular classes.

Car prices are a whole other story; while in Germany, the US, and even Japan, first-world cars are in the range of USD 30 to 50, here our imported cars reach prices that are impossible to translate in real terms.

Let's talk about real estate now; to say the same, prices have risen by more than 500% since the implementation of the Real Plan, and very little, or almost nothing, has been done to more effectively control the sector.

They made billions from IPOs when going public on the stock exchange, through investors and shareholders, but they deliver tiny properties at exorbitant prices, in any region of the country, with substandard materials and generally delayed.

In the diagrammed vision, approaching the second decade of the Real Plan's implementation, inflation has now turned everything into a great incongruity, purchasing power has been disintegrated, and the large mass of wages has been lost, but is forced to pay heavy taxes to the government.

The first alternative is a tax reform, with the unification of taxes and rates; the second is a more pluralistic price control with minimum and maximum price tables; and lastly, strong open competition so that we have choices, options, and opportunities to find alternatives.

It is not possible for the same company to operate in cellular telephony, broadband, television, and data transmission, thus creating a significant gap in the competitive advantage of its competitors.

The privatization process should encompass at least 5 companies in each sector, but what we see today is an unimaginable concentration, always aimed at increasing profits.

Free enterprise is being used as a tool for easy exponential profit, to the detriment of competition between companies.

We can no longer tolerate such disparate prices in the country, and in most sectors, we need to rethink and reflect on the minority that profits at the expense of millions of Brazilians who lack access to even the most basic necessities.

Public prices are no exception to the rule and usually encompass chain gains, as the State is wasteful and never offers a return to the taxpayer.

Society must sound the alarm so that globalization does not become an irreversible blow, fueled by inflation and exorbitant prices, which we face every day in every corner of the country.

The time has come to put an end to this outrage, which has been going on for a long time, without any action from our authorities, who wash their hands of the matter.

Carlos Henrique Abrão is a judge on the Court of Justice of São Paulo.