[00:02] continental country, [music] has a large consumer market, 200 million people, an abundance of natural resources and we are among the largest economies reality for most of the population, and it's far from being a
[00:14] prosperous reality.  If we take our GDP per capita, which is the division of GDP by the number of [music] people we have here in Brazil, it's only 12,313. [music] That's well below countries like Argentina, which is 14,400, and Mexico, which is
[00:29] 15,800.  1800, Chile $18,000 and very, pyramid, which would be Canada with 60,000,300, Germany with 63,000 and the United States with an impressive 96,700 [music]
[00:43] exceeds 300 million inhabitants, right? So you see, the problem here in Brazil work very hard.  We have millions of people waking up early, facing hours in traffic, studying at night, some earning an income from it, running small
[00:57] businesses, and they practically fight every day to build a better life.  However, even so, thriving here remains a challenge for most of the After all, how can a nation with so much musical potential remain
[01:09] relatively poor?  To answer this question, my team and I economic history, analyzed data and studies, and the most relevant evidence what we found helps explain not only why Brazil remains
[01:23] relatively poor, but also why getting rich here seems so difficult. That's because this difficulty doesn't just exist in people's perceptions; it also appears in the data.  According to a Datafolha survey, 59% of
[01:35] is no longer sufficient to cover basic expenses.  Among those who this percentage is obviously higher, reaching 70%.  In practice, this means that millions of people need to learn how to supplement their income
[01:49] with side hustles, extra work, or more than one job simply to make ends meet unfortunately, this is not a recent problem.  In fact, it is the result our country for decades.  And to understand it, we're going to go back in time.
[02:02] moments when it seemed that Brazil had finally found the path to prosperity.  That was the case in the 1950s, during J.C.'s administration at Lubicheque, when industrialization accelerated and the country underwent a profound
[02:15] economic transformation.  It is with pleasure that I accept the invitation from Amazon Films to offer a few words on the film with which Brazil is now presenting itself in an extraordinary phase of development.  Its
[02:29] immense continental size is being torn apart by roads that connect Brazilian soil in all directions. Industries are developing at an extraordinary rate.  The cybersecurity industry, the automotive industry, and
[02:43] now the pioneering movement that is shaking the entire nation, are bringing to the heart of Brazil a center of culture and civilization that will be tomorrow the new capital of Brazil, Brasília.  Brasilia will incorporate
[02:57] more than 6 million square kilometers into Brazilian territory.  Let's build a new nation within our own borders.  This is São Paulo, the capital of work, the reinforced concrete giant that grows bigger every day .  We gazed in
[03:13] wonder at the fastest-growing city in the world, growing in every direction, outwards and upwards. Skyscrapers, new avenues, new neighborhoods.   It is
[03:25] also growing in terms of human population.  With just over 1 million inhabitants in 1940, it now has nearly 2.5 million. However, in the dizzying pace of its growth, there are dramas that cannot be hidden.  And
[03:40] again between the 60s and the early 70s during the so-called economic miracle. At that time, Brazil was growing at close to 10% per year and was among the say that this happened again in the 2000s, when the Commodities Boom
[03:54] boosted exports, increased income, and created the feeling that the country sustainable path to development.  At different times, we believed we had found the way to make Brazil a
[04:06] reason, that future never arrived.  And looking more closely at a pattern that is periods, Brazilian growth has not been continuous.  It comes in cycles.  Periods of strong expansion were followed by slowdowns, crises,
[04:21] raises a new question, perhaps more important than the first, because cannot sustain that growth long enough to transform the lives we have to look beyond the major events in our economic history.
[04:35] this dynamic to repeat itself for decades. For example, in the last 40 years, Brazil has had 26 years of growth and 14 years of crisis.  And that, in itself, says a economy.  Throughout this period, the country experienced successive political
[04:50] international landscape, created a particularly unstable environment for long-term development and growth.  This alone makes any kind of development trajectory difficult.  But there is another structural element that amplifies this problem:
[05:06] finances its own operations. For decades, economic growth has often been associated with the expansion of public spending and credit. often as a response to periods of slowdown.  And the problem is that the
[05:19] When the government persistently spends more than it collects in revenue, the difference has to be financed.  This leads to an increase in public debt.  If we look back to 2014, Brazil has been recording recurring primary deficits
[05:31] revenue and what is spent without the contagion of debt, but which does become debt.  So, in practice, our public debt has stopped fluctuating take on the debt to fix the situation; things are good, don't take on more debt, pay off
[05:45] part of it.  It then followed a structural upward trajectory.  So today, using our internal methodology, which is different from the methodology used by the IMF, by the way, we already have a debt-to- GDP ratio of around 80%, which is a
[05:57] Bruno, the United States owes much more, Japan owes more, Italy owes more, yes, but with much lower interest rates .  So we have a compared to those highly indebted countries, but they have very low interest rates
[06:11] , in the single digits.  Brazil's figure is in double digits.  Looking at you only need to see that in your investments, achieving a 15% annual return doubles your capital in approximately 5 years. Our SELIC rate, and practically half of the
[06:24] at a level very close to that. This makes life easy for investors who but it makes life difficult for our children and grandchildren with a debt that can quickly double just by thinking about interest rates, right?  Aside from the government taking on
[06:38] than it collects in revenue.  And what's more important than the number itself is what it actually causes, because the higher the debt, the greater the perception of risk tends to be. to finance that debt.  And this effect is not limited to the
[06:51] economy.  Because if you can get a state so it can lend to businesses and families, you have to get an even higher return.  So credit becomes much more expensive for them, the cost of capital
[07:03] productive investment loses momentum.  In practice, this means fewer companies expanding, less innovation, an economy growing below its potential, which lower income generation for the population.  In this environment, the private sector
[07:16] operates under constant pressure, financing becomes more expensive, margins expansion diminishes.  The effects of this are directly seen in the survival of companies.  Looking at some interesting data here , in 2013 there were
[07:30] 874 requests for judicial reorganization in Brazil.  In 2016, at the height of the worst recent recession, that number jumped to 1863. to 1863. In 2020, during the pandemic, it was 1189. In 2024, it was
[07:43] 2273. And this is where it gets more interesting, right?  In 2025, the number of judicial reorganizations rose to 5,680 just one year.  That's almost five times the first quarter of this year, that number is already approaching 6,000.  And the
[07:59] just talking about small businesses here. You have companies like Americanas, Casas Bahia, Gol, Azul, which have also gone through similar processes, different sectors of the economy.  This results in less job market stability
[08:11] , less investment, and an environment that becomes increasingly sizes to continue growing.  And the challenges of the business environment, they're They are also in the way the system itself works.  Opening,
[08:24] expanding, and maintaining a business in operation in Brazil requires dealing daily with a high level of bureaucracy, regulatory complexity, and legal uncertainty that exceeds the levels observed in competing economies.  As a
[08:36] increase in the cost and time required for investment, and a reduction in the business owner, you probably didn't need this video to realize everything challenge firsthand every day.  The reality of high interest rates, bureaucracy, and
[08:50] squeezed margins.  For you, economics isn't an abstraction, it's not just about numbers, .  And it was precisely with this challenge in mind that Grupo Primo and G4 joined forces for the first time to create the 2X profit operation.  An
[09:04] entrepreneurs double their company profits and consistently build wealth .  For this reason, on August 11th, at 8 AM, we will present all the details of an exclusive live stream. If you're an entrepreneur, if you're a business owner,
[09:17] register is in the description.  The event is free.  Now, going back to the main point, while we have these problems, a be allocated to paying off the debt itself, which reduces the amount available
[09:31] for investment in infrastructure, education, and increased productivity. This results in an economy that invests less, tends to grow less, and finds it increasingly difficult to sustain consistent
[09:43] is another factor that helps explain why, even with high levels of tax collection and public spending, the results continue to fall short of expectations here in Brazil.  This is not just about how much the state collects or how much
[09:56] it spends, but about how the resources are used.  And this is where a crucial issue in Brazil comes in: corruption.  Various Brazil may represent losses equivalent to 2 or 3% of GDP per year.
[10:11] last year's GDP, it was around R$ 12.7 trillion.  Taking 2% of that value would give an additional R$4 billion .  To give you an idea of ​​how much for Bolsa Família this year, it comes to around R$ 160 billion,
[10:27] less than that.  In other words, we can say that corruption diverts almost 100 billion more than we spend on Bolsa Família (a Brazilian social welfare program).  And the interesting thing, right? The tragic thing, actually, is that this lost money is very significant,
[10:40] comparison with Bolsa Família, but you corruption reduces the efficiency of the economy because it makes projects more expensive, it public investments, it increases insecurity for investors, it distorts the
[10:54] allocation of resources, because projects cease to be chosen based on economic efficiency and become influenced by the interests of certain that the capital available in the country generates less return than it could, resulting in
[11:08] concrete improvement in the lives of the population.  Wow, Bruno, so corruption is a big part of the problem, right?  She's part of the problem, but she doesn't explain everything.  For sustainably, we need three
[11:21] together over time.  The first of these is physical capital.  This involves machinery, factories, and infrastructure.  The second is human capital, related to the qualification and training of the workforce here in Brazil.  And finally, we
[11:33] productivity, which is the ability to transform these resources into more we consider the first two to be basic inputs, then productivity and the combined to generate a result.  With the same resources, an economy
[11:48] To make things easier, let's give an example. Imagine a man fishing with his hands, available around him; he's less productive than if he gathered the material He would catch more fish per hour or per
[12:03] continues transforming the wood into a boat, into these threads now, not just for fishing with a line, but into a net, he becomes even more productive, wood and, I don't know, vines, for example, a very rustic example, let's say.
[12:17] We can say that, when it comes down to it, it 's productivity—that efficiency in the allocation of resources—that separates economies that grow expand temporarily because, for example, commodity prices
[12:30] Brazilian case, growth over the last few decades has been much more with gains in efficiency.  The country grew by expanding investment, credit, and workforce, but with very limited progress in productivity.  And the
[12:44] imbalance, because according to data from the conference board, Brazilian productivity has fallen by about 18.5% in the last 30 years.  And today, and I find this absolutely impressive, it's at the same level as in 1958.
[12:59] 80s. And why do I find this impressive?  Because if you go back to 1958 or even the 1980s, a large part of the country still didn't have an electricity grid.  You had a lot of people working in the fields without
[13:12] technology; they weren't using tractors, they were using hoes .  You didn't have the internet, you did n't have computers.  The 80s saw the beginnings of computers, due to the computer law, right?  Her ban on computer imports is
[13:26] prohibiting them to protect a national industry that ultimately never materialized.  But anyway, you didn't have much of an electrical grid, you didn't have computers, you didn't have the internet, obviously, and in more recent times, you didn't
[13:38] have any of that.  Even so, our peak productivity was in the 80s, not now.  It is no coincidence that we are seeing a decrease in Brazil's share of the global GDP.  If we go back to 1980, the country accounted for about 2.8%
[13:52] of global GDP.  By 2024, based on the most recent data I had access to, that share had fallen to approximately 2.1%.  It looks like a but that represents a 25% reduction in Brazil's share of the world's GDP.
[14:05] Taking growth into account, in recent decades Brazil has grown by an average of about 2.2%.  In a list of 150 economies, we would be around the hundredth, that grew about half as much as the others .  Part of this trajectory
[14:20] growth in Brazil has come more from the expansion of the quantity of than from improvements in how those resources are used.  Here in Brazil, for a long incorporated more workers into the market.  People moved from the countryside to the
[14:34] credit for these people and increased public spending.  But this model has its limits, right?  A person doesn't migrate from the countryside to the city twice; they've already come.  And evident now in Brazil.  The demographic transition itself is a clear example
[14:47] of this limit.  In 2022, the Brazilian fertility rate fell to about 1.6 children per woman.  This obviously falls below the population replacement level.  If you think about replacement therapy purely mathematically, a couple
[15:00] replenishing themselves.  However, since infant mortality still exists, this number has to be slightly higher, 2.1 on average. Brazil has 1.6 times that rate, and it's below the number of children Americans, the French, and
[15:14] mean in the end, right?  This means that Brazil's population will be renewed less and less, and that over time we will have a larger proportion of elderly people compared to young people.  And this profoundly changes the structure of an
[15:27] economy.  Here in the country, the proportion of people over 60 years old has increased from 6% in the 1980s to approximately 15.7%, which would be around 32 growing in the coming decades.  To give you an idea, today we already have more
[15:42] than 60 million Brazilians aged 52 or older.  You should see this in practice over 60 years old.  You're going to have to reconsider that preference, right?  Because 60 years old is a really long time now.  And taking into account the direct consequences of this
[15:56] aging population, on one hand you have an increase in pension spending. And we're already starting to see that, right? Last year, for example, 2025, was the first year in which social security spent more than R$1 trillion.  And it goes up from there
[16:08] lower.  And another consequence is the reduction in the proportion of the population of where people contribute most to economic growth, right?  Because the child is demanding resources to develop.  The elderly person will be, in
[16:23] part of the elderly population is forced to work, right?  But it's already consuming have people of working age.  If this slice of food I'm showing you gets smaller, it becomes more difficult to support the elderly and the child.  Looking at data from the social
[16:35] security system, if we look at the origins of what would create our current social security system here in Brazil, we go back to 1923, to the Eloi Chaves law.   Back then, we go back to 1923, to the Eloi Chaves law.   Back then, you had 14
[16:47] retire in Brazil.  Today, if we take adults, we have about four.  But of those four, two are young babies.  So there are two people left to these people don't even pay into social security
[17:01] less than two to one, soon it will be one to one and then the believe any politician would want to end social security, because it would be suicide from an electoral point of view , social security tends to
[17:13] consuming part of the public budget that could be allocated to high to show, isn't it?  Because in recent years public investment has low levels, which further restricts the potential for future growth of our
[17:27] structural imbalance, right?  The country ends up spending more to maintain its current infrastructure, investing less in building the future.  Drawing on countries that have managed to make leaps in development have done so before their
[17:41] populations have aged.  In economies like South Korea, Japan, and China, [music] they grew rapidly while still having that demographic bonus, that expanding young population .  As age
[17:53] also slowed down.  And here in Brazil, unfortunately, we're getting old before we get rich.  Our most favorable demographic window has already on the expansion of factors, like more people coming to work and consume, is
[18:07] going to start losing strength.  Demographics are a trend that is difficult to change.  She's kind of... it's not like she can predict the future, right?  But it gives a good idea demographic trend for the next 30 years in Brazil is one of no
[18:20] population growth, with the existing population aging.  And that in itself doesn't But it makes things more difficult and also necessitates a shift from a model of simply expanding resources to one of better allocation in
[18:34] And at the same time that we have this demographic factor happening, the problems I mentioned, corruption, etc., Brazil faces another obstacle, productivity gain.  And a large part of this limitation stems from the way
[18:48] Or in other words, we're talking about education.  And here I'm not just talking about access to school, but the quality of learning and the ability to transform those years of study into real, high-quality productivity.  And
[19:00] to start this part, I'm going to put here a piece of data that is very very widespread idea in the Brazilian public debate that we need to invest don't quite understand the data, because when we look at it, Brazil already invests
[19:13] a significant portion of its GDP in education, around 5.5% if we take the year similar to countries like Germany and is above countries like Canada, South Korea, Chile, and even China.  And then a lot of people look at this and say, "Wow, then there's
[19:28] The problem wouldn't be a lack of investment.  However, this comparison in isolation is misleading.  Because when we look at the value per student, the scenario changes completely.  In Brazil, annual public spending per student is
[19:40] around 3,600. In OECD countries, this figure more than triples, reaching approximately 11,900. quite a lot, but when you divide it by the number of people, it's not that much anymore.  And
[19:53] result that this investment , right?  In international assessments, such as PISA, Brazil consistently ranks well below the average CDR (Center for Development and Reduction), especially in mathematics and
[20:06] just the ranking position, right?  This is the basic level of learning.  A study conducted by the Abramundo Institute reveals a of approximately 2,000 people, which statistically would represent
[20:20] about 23 million Brazilians with at least 4 years of schooling and who live in did not include people from rural areas, for example.  A clear pattern was found. Most Brazilians can read, but
[20:32] read.  In other words, they don't know how to interpret.  Approximately 26% of those difficulty verifying the amount of an electricity bill.  48% reported difficulty understanding basic information on a nutrition facts table, and 55% said they were
[20:47] unable to interpret a blood test, even when the So you see, we're not talking about complex content, right?  We're encounter in everyday life, and the kind of information that, in theory, should be
[21:01] to school.  This is basic literacy; it's the ability to interpret, to compare, and to reason based on that.  And if the person fails to develop this in the basic part of their education, this effect will accumulate over
[21:14] how are they going to learn more complex things?  It will be left with a number becomes a teacher who will pass those gaps on.  This problem increased investment in education over the last few decades, we've
[21:27] seen that this investment per capita is still not the most adequate; below what we would expect in this country.  We can say that the educational effort here in Brazil, although relevant, has not been sufficient to
[21:39] reach the levels of quality observed in countries that developed before aging.  Without this change, right, in investment in ceases to be an engine for future growth, as has happened in several other countries.
[21:52] extent, the limitations that we already have here in the country's economic structure.  And economy as a whole, the conclusion starts to become clearer, right?  If growth physical capital, human capital, and productivity, and none of these elements is
[22:07] physical capital may grow, but without a skilled workforce and increased efficiency, it will lose momentum over time.  If you take human capital, it can improve, but if the productive environment is unable to absorb
[22:19] limited.  Today we lose this human capital to another country that very productive person to a more interesting environment.  And productivity itself cannot be sustained without a solid foundation of investment in physical capital and
[22:32] human capital.  It is precisely the interaction between these three elements that will define whether a country can grow continuously or whether it gets stuck in cycles when that combination doesn't happen consistently, the result is
[22:46] predictable, right?  This uneven growth, a gain in income that is structural transformation.  And then you realize that any resemblance to the history of Brazil is not a mere coincidence. That pattern has been repeating itself for decades.
[22:59] Economic contexts change, the driving forces of the moment change, but not this structural logic.  Ultimately, folks, realize that Brazil isn't His challenge is to transform growth into lasting prosperity.  This will
[23:12] credit and increasing public spending.  It requires an environment capable of sustaining generation of opportunities consistently over time.  And that's right?  Here we answered why Brazil is a poor country today, but we
[23:26] we can transform Brazil, despite the problems we saw in this video, For anyone who has ideas, the comments are here.  I hope you like and subscribe to the channel.  Big hug and see you next time.
[23:40] hug and see you next time. M.