The 2019-2020 Competitiveness Brazil report prepared by the National Confederation of Industry (CNI) places Brazil in 17th position in comparison with other 17 economies with characteristics similar to the Brazilian one. According to the study, the business environment in the country has even improved in the last ten years, but not enough.

In the general classification, taking into account variables that measure the set of characteristics favorable to doing business, Brazil is in the penultimate place, ahead only of Argentina. South Korea, Canada and Australia lead the ranking when it comes to global competitiveness.

The study evaluated factors that directly impact the internal and external businesses of the 18 countries, such as Macroeconomic Environment, Business Environment, Education, Production Structure, Scale and Competition, Financing, Infrastructure and Logistics, Technology and Innovation, Labor and Taxation.

Of all the items, Brazil fared better in Technology and Innovation (8th place) and Labor (9th place), showing progress over the past ten years with a reduction in bureaucracy and improvement in labor legislation.

At the other end, which could be called "sand in the gears", stuck in the penultimate place in Taxation and the last in Financing. The survey shows that here it is more difficult to obtain money to invest in production and easier to lose it in the complex and unequal tax system.

The cost of capital in Brazil is much higher than that found by other evaluated countries. In 2018, the Brazilian economy had the highest short-term real interest rate (8.8%) and the highest interest rate spread (32.2%). In relation to taxes, the load in the country proved to be among the highest when measured in relation to corporate profits. According to data from the World Bank's Doing Business 2020 survey, in 2019 the amount of taxes and contributions paid by Brazilian companies represented 65.1% of their profit.

Turkey, which ranked 11th in the overall ranking, has demonstrated that it is possible to rebalance the tax burden that burdens a country's economic agents asymmetrically. In the Taxation factor, it rose from 14th to 4th position, going from the lower third (13th to 18th place) to the upper third of the ranking (1st to 6th). Between 2018 and 2019, Turkey carried out reforms that facilitated the payment of taxes in the country: it improved the online portal to comply with tax obligations and exempted certain investments from VAT (Value Added Taxes).

Also in the Macroeconomic Environment factor, Brazil did not do well: it came in 16th place, ahead only of Turkey and Argentina. The result is determined, especially, by the lack of fiscal balance, an important element to ensure a macroeconomic environment favorable to investment, alongside monetary stability and external balance.

Currently, Brazil is not among the top six in the ranking in any of the nine factors evaluated, but it presented average performance in some of them. In Technology and Innovation, for example, it made the fifth largest investment in R&D (Research and Development) on GDP (1.26%). The country also occupies an intermediate position regarding the publication of scientific and technical articles in high-impact newspapers and high-tech exports - a measure of innovation in companies.

Brazil also obtained, for the second consecutive edition, a reduction in the time taken to start a business (from 79.5 days to 20.5 and now to 17). In this edition, there was a drop, in comparison with the previous one, in the cost to complete the procedures for starting a company: it represented 5% of the per capita income, falling to 4.2%.

In the final calculation, according to the CNI study, Brazil's overall average grew. The average of the scores obtained on the nine factors rose from 4.26 to 4.4, showing that the country's situation has improved. However, as Brazil is distant from the countries immediately above and as these countries have also advanced, the improvement in the Brazilian situation was not sufficient for the country to rise in position in the survey.

The Competitiveness Brazil report was first published in 2010. There were subsequent editions in 2012, 2013, 2014, 2016, 2017-2018, 2018-2019 and, the most recent, 2019-2020.

According to CNI, the study focuses on a limited set of countries that, due to their economic and social characteristics and positioning in the international market, constitute a more adequate reference for the evaluation of the competitive potential of Brazilian companies.