Proverbial

With the US dollar getting cheaper and cheaper in Brazil, several economists and businessmen are complaining about the country’s inability to have competitive prices in foreign markets. Former Ministry of Finance, Rep. Antonio Palocci, says there’s no need to worry, that it’s only a matter of time (.br) until a rise in imports balances the exchange rate.

Which seems like a very reasonable idea until you realize the amount of taxes and laws aimed at preventing imports and “currency evasion” this country has.

It is not by chance that Brazil is first in the iPod index, more than U$ 100 over second place India. Videogame consoles, according to this UOL Jogos piece (.br), receive a cascade of taxes adding up to 257% over the FOB (Free on Board) price - while games and handhelds get 233% and 209% tags, respectively. The result is that an XBox 360, which would go for U$ 399 in the US, costs about U$ 1.400 in Brazil.

Maybe mr. Palocci wasn’t talking about this sort of “private imports”, and actually meant some sort of large scale industrial imports which have exemptions from such absurd taxes. But it does seem kinda weird to see the former Ministry of Finance, someone who still has a great deal of influence over this administration, talking about free exchange and imports while his government legislates to prevent these same imports in order to “protect our economy”.