For the public finance specialist, the expenditure for social security has gone up and money for reduced works
Armed with graphs that compare the fall of investment in infrastructures in the country with the growth of spending with the Prevention In recent decades, the economist Raul Velloso – consultant specialized in finance and former secretary for economic affairs at the Ministry of Planning – He warns the imbalance of the country’s account. “Public investments in the infrastructures were about 5% GDP In the 80s. Today it dropped to 0.7%. In the meantime, the private investment (investment) has been interrupted in the same place, 1% of GDP. “
At the same time, the increase in pension expenses of the elderly population with pensions. According to the expert, from 1987 to 2000 the growth of the elderly population was 62%. “When I jump to 2024, 62% became 264%,” he warns. “Deeply, it is a dispute between money for social security, to cover financial imbalances and direct expenditure on investments, infrastructures, for the country.” Following, the main extracts of the interview with Estadão:
He has been studying public accounts for over 40 years and you have been very worried about social security. Why?
My concern varies with what identifies as great difficulty of every moment. And this, of course, varies over time. Things are changing.
Is it the most important for you in terms of public accounts?
The most important thing right now is the question of social security imbalance. Social security has a high imbalance in its various accounts. You have the union and, inside the Union, various groups, states and municipalities. In all these cases, we have a very high financial imbalance which obviously ends up consuming resources that will stop going important elsewhere such as or, even more, depending on the moment, that of social security. Of course, I’m not saying that social security is better or worse to be treated by another object. For me, the great dispute is with the issue of infrastructure investments and the public sector in Brazil is the main agent who operates in this sector. So, after all, it is a dispute between money for social security, to cover financial imbalances and direct expenditure on investments, infrastructures, for the country. It is a question of achieving social security or growth objective of the country.
In the last decade, public investments in infrastructures have decreased. And the private initiative has entered this area. Doesn’t one look for another one?
No. In fact, if we calculate private investments and put public investments, in a graphic designer, calculates an average and shocking inflation, taking all the technical treatments to have comparable things, public investments in the infrastructures were about 5% of GDP in the 1980s. Today this investment dropped to 0.7% of GDP. In the meantime, the private individual has been stopped in the same place, 1% of GDP.
Didn’t he grow up?
No. It has been constant, in 1% of the GDP since 1980. I want to say, it is obvious that one collapses and the other does not replace, at a certain point we will miss it. We are unable to meet the growth needs of the economy. So, if social security costs increase in its various cases, it is this article, public investments in infrastructures, which are reduced to make room for that expense to be performed.
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Is it a vicious circle?
E. Only he is coming at a dramatic moment. Since the deficit and expenditure for social security have started to grow desperately, that I have been in this area for so many years, I would never have imagined that I would witness something in this dimension. From 1987 to 2000, the growth of the elderly population was 62%. When I jump to 2024, 62% became 264%.
The retirement reform has advanced very little, is that so?
Practically nothing. Because it has a very complicated demographic phenomenon in Brazil, which escapes the economic sphere, but makes the number of elderly grow a lot. The last official projection (of the rate) of elderly growth, compared to 1987, is 679% until 2050.
But this is not an exclusive problem in Brazil, right?
It is not, but it appears very strongly in Brazil, much more strength than in most countries. And our regime is a simple breakage regime, which is the most common. On the one hand, he takes care of those who are more than 65 years old and, on the other, charge contributions to those who are called active age population, the youngest. While the elderly started to grow from 62% to 264% and then they climbed 678%, the population that gives the resources went from 34% to 76% and then dropped to 65%.
How to solve it?
We have to make a large -scale attack on the problem. Because the money to invest, if not private, must be public. And the public will not stop spending in the social security hole. So we have to adapt social security. There is no other way.
Continuing at this rhythm, how long has it broken down without return?
Feel, if you add spent for social security and assistance, in relation to the total expenditure of the Union, we may have left 40 to 50% of the total spent in a short time and is moving to 80%. This is the dimension of this drama. That is, the way we are walking, the expenditure of the Union will become social security, assistance and fraud, three things. And this will exceed 50% of the total and it is obvious that it will move with all types of payment. (In this case) Brazil will pursue a path that people do not realize today, it almost has no idea what Brazil to jam in the middle of the expense. This is a Brazil that will be very small compared to what has already been.
Source: Terra
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