Challenges of a necessary transition

Claudio Fernandes*

Developed and developing countries share a crossroads: how to make the transition to a circular and sustainable economy? We all know that it is necessary to choose a path that removes the pressure on the environment and social inequity. Those are two conditions that hinder, delay and block the development of a nation and the general welfare of its population.

In Brazil, we are aware that the pact made between the government and the agents of the financial market and the dominant sectors of the economy needs to be reviewed urgently. The Brazilian tax system is complex, unfair and encourages the expansion of inequalities.

Most of the public receipt comes from indirect taxes, paid by everyone, on production and labor or income, with progressive rates that affect more individuals than corporations. Meanwhile, Bovespa moves the equivalent of two thirds of the country’s GDP per year and the Financial Operations Tax (IOF, from the portuguese term) rates have been cleared since 2012 for some of the main transactions. Not to mention the exemption of IPVA (tax for vehicles) for speedboats, jets and helicopters.

The reasons are always the same: reduce the companies’ taxes in order to create more job positions. But in the last six years the level of unemployment just raised and the jobs became more precarious.

On one hand, there is a scenario that reinforces the raise of the poverty and is especially harmful to the environment, the women and the indigenous people. Government and leaders claim that it is the only way possible. On the other hand, there is the 2030 Agenda for the sustainable development, its 17 objectives and Brazilian’s 172 goals to integrate the economic relations and the environmental and social needs of the country. We are living at this crossroads. To change the pact made by the privileged sectors must be a priority, in order to give us a chance to build a way into the sustainable development someday. 

*Economist and consultant for the WG 2030 Agenda

*Published in the newspaper Diário do Nordeste (CE) on May 15th 2019.

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