Corruption in Brazil, Essay Example

Globalization has been a blessing for both developed and developing countries and some economies like Brazil hasbeen a major beneficiary of globalization due to their population sizes, resources, and capabilities. Brazil is one of the fastest growing economies in the world and a member of the BRIC group which also includes Russia, India, and China. BRIC countries are expected to be dominant economic forces in the 21^st century besides already established economies like the U.S. But one of the many social issues that plague developing countries is corruption and Brazil has been no different. Even as Brazil moves towards brighter future, the corruption issue remains a serious problem because foreign direct investment increases incentives for corrupt elements to increase their incomes. According to the Heritage Foundation, the level of corruption in Brazil is above the average global level and Brazil pays a high price for corruption in economic area (The Heritage Foundation). Brazil should take major steps to enforce strict rule of law and curb corruption so as to protect its competitiveness in the global arena.Corruption is a serious problem that must be addressed on a continuous basis through a comprehensive framework of knowledge, understanding, and change to minimize its presence throughout Brazil. It is expected that through the work that is performed to curb corruption, much will be learned regarding local communities and the challenges that they face under the hands of corrupt officials and business owners.

Corruption occurs in private sectors, too but the major costs of corruption to Brazilian society mostly originate in the public sector. Corruption in Brazilian public sector takes different forms which are as follows(Bisneto):

• Public officials raising prices for goods and services in exchange for kickbacks and/or financial support from the manufacturer, all of which drive prices up for the average consumer to new levels
• Public officials paying contractors even before the goods have been provided or services have been rendered in exchange for kickbacksthat satisfy greed and opportunity at the expense of the economy
• Brazilian legal system allows political donations to parties only but businessmen may make illegal private donations to candidates in exchange for favors
• Favoring certain bidders in public bidding or tweaking the rules to favor thembecause they may provide better outcomes and higher kickbacks
• Changing regulations such as tax breaks and subsidies etc. in exchange for kickbacks

The origins of public corruption in Brazil lie in Portuguese rule. In older times, King would often give gifts to the nobles to ensure their loyalty. Over time, the behavior of the ruling class evolved around protecting self-interests at all costs. Even after Brazil gained independence, the system survived in the form of political bureaucracy. The situation is also made worse by the fact that in Brazilian culture, political and business relationships are seen as personal ones and there is often a blurred line between personal and public affairs(Bisneto).These factors have played a significant role in shaping negative outcomes for Brazilians because there are no boundaries that exist to curtail negative and potentially illegal behaviors. As a result, it is likely that many individuals will not obtain a fair evaluation because they live in a corrupt society that does not offer honest persons any real benefits.

The structure of Brazilian national government also increases the potential for corruption. First of all, companies have to deal with a wide range of regulatory authorities, increasing exposure to public officials demanding bribe(Woodruff). Brazil has 26 states and thousands of municipal governments which gives us a hint of the regulatory challenges in the country (Stocker). Similarly, Brazilian tax system is also complex, creating opportunities for tax collectors to request bribes in exchange for relaxed tax assessments (Woodruff). Transparencia Brazil reported in 2003 that more than half of Brazilian businesses had received bribery requests from tax collectors (Stocker). Throughout Brazil, there are significant issues to consider with respect to running a business because many of the regulations that govern businesses are not necessarily ethically responsible or in the best interests of business owners and consumers. Therefore, they lead to an often corrupt and dangerous course of action for businesses who otherwise would seek legitimacy. These challenges are significant and put a strain on the ability of businesses throughout Brazil to operate peacefully and demonstrate their strengths in a manner that is consistent with ethical objectives.

Corruption imposes huge economic costs on Brazilian society. It is estimated that corruption costs the country over $41 billion a year. Brazil is the largest economy in South America and was the seventh largest economy in the world as of 2011. The country’s economy was valued at over $2.1 trillion in 2010 and the country also suffered from the recent financial crisis but made a relatively quick recovery as compared to many other nations. Corruption is now a top national priority because Brazilian businesses are determined to make their mark on the international scene and similarly, Brazilian Government wants to increase its political and economic leverage. Privatization of large public companies has helped reduce corruption in the private sector because these companies have become more efficient in terms of operations(Woodruff). Corruption also plays a significant role in determining how organizations move forward with their business plans and their objectives to achieve sales growth. For private companies, these objectives are somewhat simpler because there is a greater level of legitimacy to their operations and this provides a greater sense of security over the long term.

Brazil’s most prominent politicians have been marred by corruption allegations over the years. One of the most prominent example of political corruption was Adhemar de Barros, mayor and governor of Sao Paulo in the 1950s and 1960s who would take pride in stealing from public works projects he endorsed and had embraced the motto “he steals but he achieves.” Brazil’s President Fernando Collor from 1990 to 1992 was another prominent example who was forced to resign as a result of impeachment on corruption charges. In 2002, former Brazilian President Jose Sarney’s daughter Roseana Sarney’s presidential bid was derailed because $500,000 in cash was found in her husband’s office. Fortunately, Brazil’s current President Dilma Rousseff has personally taken the cause against corruption. During her first year in office, several top-level government officials were forced to leave including her Chief of Staff and several cabinet ministers. The ministers who have been forced to resign under Rousseff’s rule include Transport Minister Alfredo Nascimento, Agricultural Minister Wagner Rossi, Tourism Minister Pedro Novais, Labor Minister Carlos Lupi, and Sports Minister Orlando Silva(Stocker).Another evidence that Brazil may finally be making progress in battle against corruption is the country’s recent mensalao scandal which involved millions of dollars in bribe for political support and resulted in the largest corruption trial in country’s history(Padgett). The investigation of the case revealed that members of Brazilian Worker Party paid about $50 million to congressmen between 2003 and 2005 to buy their political support (Carvalho).Corruption has infiltrated the political infrastructure throughout Brazil for many years; therefore, it is unlikely that these efforts can or will be undone without a significant effort or push to fight against this form of poison that impacts many areas of the political scene. These elements contribute to an even weaker political framework and do not provide any real sense of accomplishment or support for legitimacy within politics in Brazil. However, there is potential room for growth and change within this structure if a larger number of politicians were to recognize the negative impact of these decisions on their political lives and took the steps that were necessary to improve the political landscape in this nation.

Brazil is relatively a young democracy, only having gained it in the mid 1980s or less than three decades ago. It is reasoned by some that Brazil’s economic growth as well as increasing international investments by its companies abroad may have also been reducing corruption in business sector even if the effect has been minimal. In addition, Brazil has instituted a number of programs and policies to curb corrupt activities and these programs may be yielding valuable outcomes. One of the policies to control corruption is random municipal audits, which began in 2003. Before that, Controladoria Geral da Unioa (CGU) was created in 2001 to improve public transparency. The year 2000 saw the founding of an NGO Transparencia Brasil to fight corruption. Last but not least, the Brazilian Government created Portal da Transparencia where website visitors can access information on public expenditures and revenues (Bisneto). Each of these contributions to the Brazilian framework has been relevant because they provide a means of expanding the level of authority that is necessary to fight corruption and to address the challenges that are necessary to overcome negativity in the Brazilian economy. This process also demonstrates that there is a significant need to address growth and change in the form of new perspectives and strategies to fight corruption that have not already been considered and addressed. Creative approaches to corruption may be instrumental in supporting the continued growth and development of anti-corruption policies and procedures in Brazilian organizations.

Another sign that the country is finally waging battle against corruption to improve its image and economic competitiveness is the Anticorruption Law which will go into effect on January 28, 2014. The law imposes civil and administrative liabilities on companies that may commit certain corrupt acts. This is the country’s first attempt to hold companies liable for corrupt acts and applies to both local and international companies. The fines for violation of one or more elements of the act will range from $2,500 to $25 million(Association of Corporate Counsel).Establishing a law to fight corruption in Brazil is a significant step and provides greater ground to stand on when allegations of corruption are identified and are fought in the public forum. The opportunities that are available to support businesses must be considered because they frame the decisions that are made for businesses in Brazil for the foreseeable future.

Technology has also been instrumental in the progress against corruption in Brazil. Just like the Arab Spring, grassroots efforts are underway in Brazil to change national culture of corruption, especially at government level. These grassroots campaigns have also been possible because social media allows citizens with similar goals to communicate with each other and organize their efforts. Similarly, technology is making it possible to increase public access to government data. One of the most economically productive states in Brazil, Menas Gerais, has released an online tool called DataVita.info which makes it possible for citizens and corporations to analyze data on the entire formal national economy. The system is user-friendly and allows individuals to seek custom information(Mari). This is an attempt by the state governments like those of Menas Gerais to increase government transparency and give greater voice to the citizens.The implementation of technology-based tools is a critical component of the Brazilian landscape and provides an opportunity to convey the importance of new perspectives to ensure that Brazilian business owners, citizens, and politicians are operating in a fair and equitable manner that does not include corrupt acts. When technology is readily available to the general public, it is possible to obtain a larger and more significant understanding of the issues that are most important to the citizens of Brazil to fight corruption and other illegal acts. It is important, however, that citizens are provided free and unlimited access to these tools so that they are able to work effectively to fight corruption in many different ways that will have a positive impact on the economy as a whole.

Transparency International offers several recommendations to Brazil to reduce corruption. One of the suggestions is to reevaluate political and campaign financing regulations as well as greater transparency in political donations. Transparency International also suggests greater transparency at state levels such as availability of real-time data related to budgetary data. The organization also recommends stricter enforcement of rules and regulations so that they have higher effectiveness. Similarly, laws should also be introduced to remove barriers to competition and encourage fair competition in the commercial sector (Transparency International).This type of organization represents an opportunity to convey the different approaches and challenges that are necessary to support greater than expected outcomes and the development of new perspectives to fight corruption that might not have been considered in the past. A new and creative approach to corruption is essential to the discovery of new frameworks to fight this process and its hold on Brazilian businesses and citizens. It is also necessary to identify other types of organizations that might be useful in supporting actions to fight corruption that are otherwise difficult to manage or to overcome on a consistent basis with any real force.

Brazil is one of the fastest growing countries but centuries old corruption tradition poses huge challenge to its economic competitiveness. Corruption has usually been a fact of life in Brazil but now social values have been changing. The current national government is committed to greater transparency and has forced several ministers to resign. But there is still a lot of work to do to eliminate billions of dollars in annual economic costs to the country.It is anticipated that with a strong and viable framework in place, the citizens of Brazil may be able to obtain a greater hold over corruption and to address some of the most important challenges that the country faces that have been in existence for many decades. Corruption will continue to occur throughout the nation; however, its level and significance could be minimized under the appropriate conditions. In addition, it is important to identify new and existing resources that are available to support the fight against corruption and the challenges that are most important in fighting this negative aspect of conducting business in Brazil. Nonetheless, it is important to develop new opportunities to achieve growth and change in Brazil that have not yet been considered, thereby introducing new resources to the process so that all possible alternatives are explored and utilized as best as possible.

The fight against corruption must continue to expand throughout Brazil through the development of collaborations and coalitions that will be used to fight corruption in different ways. It is expected that these contributions will continue to expand the knowledge and understanding of corruption as it impacts individuals and businesses throughout the country. Most importantly, there must be a significant push throughout Brazilian society in order to ensure that corruption is a key priority for the foreseeable future. However, the political landscape will remain a challenge for the people of Brazil because a deeply rooted level of corruption remains strong and steadfast. It is important to develop new strategies and approaches to ensure that corruption is minimized throughout politics in Brazil. This process is a challenging effort that requires a continuous commitment to ensure that corruption does not grow to a level that it cannot be tamed. Corruption is such a complex concept and phenomenon that it may be difficult to overcome or to control; however, there is a continuous effort in place to minimize corruption and to take the steps that are required to ensure that corruption is reduced throughout the nation.

The fight against corruption must also consider the different types that exist, and in order to combat this problem more effectively, knowledge must be expanded that will encompass the different opportunities that are available to support this fight on a comprehensive basis. It is necessary to evaluate the different perspectives and approaches that are likely to be effective in engaging communities to wage a war on corruption because it does not provide society or businesses with any real and legitimate benefits. On the contrary, it taints many activities and is harsh to the extent that it does not provide any advantages for citizens. Corrupt acts have been in existence throughout history on many different levels. However, this does not signify that they should continue on the sole basis of their history and the level of success that corrupt businessmen and politicians have achieved. Regardless of the underlying circumstances, corruption is illegal and is an inappropriate means of conducting business. Therefore, it must be fought as best as possible in order to ensure that individuals and businesses throughout Brazil are not subject to scandal and unnecessary attention for the actions that they have performed that are clearly inappropriate. In these instances, there must be a degree of ethical responsibility in place that overrides the actions that are taken by individuals and businesses. It is necessary to develop these strategies and to take the steps that are necessary to ensure that all possible outcomes are achieve that are not corrupt and inappropriate in nature. Perhaps most important to this discussion is the ability of the citizens of Brazil to come together and to establish collaborative means to ensure that all possible steps are taken to avoid corruption and to ensure that business and political affairs throughout Brazil are supported with an appropriate and ethically charged framework for these activities. These efforts will ensure that the citizens of Brazil, regardless of their status or income level, are provided with fair and equitable opportunities for growth and change that are not corrupt in nature, nor do they pose any risk of possible corruption in future activities and any possible decisions that are made.

Works Cited

Association of Corporate Counsel. A Comparison Of The New Brazilian Anticorruption Law, The FCPA, And The UK Bribery Act. n.d. 16 December 2013. <http://www.acc.com/legalresources/quickcounsel/cnbalfuba.cfm>.

Bisneto, Joao Lidio Bezerra. “Corruption in Brazil: Nature and Evolution.” Research Report. 2012.

Carvalho, Maria Paula Schmidt. Brazil’s Future in the Shadow of the Mensalão. 22 August 2013. 16 December 2013. <http://www.americasquarterly.org/brazils-future-shadow-mensalao>.

Mari, Angelica. Brazilian states open up their data to combat corruption. 20 November 2013. 16 December 2013. <http://www.theguardian.com/local-government-network/2013/nov/20/brazil-exploring-sharing-public-data-tackle-corruption>.

Padgett, Tim. Tale of Two Corruptos: Brazil and Mexico on Different Transparency Paths. 6 December 2012. 16 December 2013. <http://world.time.com/2012/12/06/tale-of-two-corruptos-brazil-and-mexico-on-different-transparency-paths/>.

Stocker, Frederick T. Anti-Corruption Compliance in Brazil – Addressing a Daunting Challenge. March 2012. 16 December 2013. <https://www.mapi.net/system/files/PA-106_1.pdf>.

The Heritage Foundation. 2013 Index of Economic Freedom. n.d. 16 December 2013. <http://www.heritage.org/index/country/brazil>.

Transparency International. Brazil. n.d. 16 December 2013. <http://www.transparency.org/country#BRA>.

Woodruff, Ty. The Effect of Corruption on Brazil’s Economy. n.d. 16 December 2013. <http://em-journal.com/assets_c/14/142Woodruff.pdf>.