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| Executive Travel: São Paulo |
Business Essentials
Daniel DelRe
03/01/2006
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This range of skills came in handy in cracking a recent bribery
scandal at an international entertainment business. Specialists traced
electronic fingerprints on documents in the computer network to the password and
username of one of the company’s directors. Accountants then compared these
documents to the records of the payables department, and found inconsistencies
that pointed to fraud. Confronted with the evidence, the director in question
admitted taking bribes. “Each project is different,” Giordano says, “but in the
end, people use similar methods and behavior to commit fraud or steal from their
own companies.”
| “Foreign investors in Brazil are very focused on the intellectual property
issues.” |
Global intermediaries, like the International Monetary Fund
and WTO, are also striving to shed light on unresolved issues and promote
economic stability, both to allay the concerns voiced by foreign investors and
to open opportunities for investment.
The Brazilian government and the IMF
have begun phasing in fiscal accounting policies that IMF economists hope will
restrain government borrowing in order to reduce public debt from 65 to 55
percent of GDP. Additionally, the IMF is advising Brazil on reducing the amount
of dollar-denominated government debt it issues. This would mitigate the risk
that Brazil’s debt burden will grow heavier if the dollar strengthens versus the
real, which is likely in light of recent Federal Reserve tightening. Last
December, Brazil announced that it would repay its entire $15.5 billion debt to
the IMF two years ahead of schedule.Trade Policy
International agencies have been less successful, however, in
getting the country to liberalize its trade policies. According to the U.S.
Department of Commerce, Brazil’s primary trading partners—the U.S. and EU—pay an
average 11.5 percent tariff on goods they export to Brazil. U.S. agricultural
products face a stiff 25 percent merchant marine tariff, which puts them at a
significant disadvantage to products from the Mercosur regional free trade
group. At the same time, Brazil has cut tariffs on heavy machinery and raw
materials from its Mercosur partners—Argentina, Paraguay and Uruguay—by between
25 and 50 percent.
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