vendredi, octobre 18, 2013

An expensive country to live in

I saw yesterday an announcement saying that the PS4 Brazil edition (Sony)  is the most expensive worldwide. Why is that? It is well over twice the US price so it's cheaper to fly to the US and buy it there (which they know). One thing I realized when I checked the distribution of IP filled in the country: on top of being the lowest of the BRICS countries,  80% of IP filled is non-resident. Now I'm going to debunk that briefly for those who are not familiar with IP notion.
IP (intellectual property) is a protection of an idea, it's the patent (all the buzz from Apple for example,  patenting anything that moves within the office!). When the IP filled in a given country is non-resident it means that whoever filled it is fiscally based in the country but the country of origin is foreign.  It might not even be compulsory to have a fiscal HQ in Brazil to fill in for IP. So what is patented in Brazil is technology from abroad applied in Brazil. As there is too few brazilian innovation it keeps competition away. Now companies are using the consumism habit brazilian got since money started to flow and price their items as high as brazilian would allow it to. Now that would have probably worked without the innovation, but it kills the innovation spirit in Brazil and force the country into a foreign innovation dependant consumism. That is dangerous for technology independance.

Now that is only one aspect. I probably should mention that the country needs 200000 more engineers to function properly.
There is a lack of proper logistical infrastructure, no train, only air, sea and roads. It create delays in delivery when there is a delivery (trucks have accidents). Roads are overloaded, dangerous and not maintained. So for example farmers can loose entire production when the transport is not coming in time to pick up the goods (price increase reduction in efficiency for the same amount of goods products).
The Value added per brazilian inhabitants is half of USA inhabitants,  logically the price follow an opposite tendance.
Brazilian production has not increased since the 90's but consumption of good increased dramatically since the middle class exploded.
Moreover the government applies importation taxes in the name of protectionism but nothing is done to increase the national production (to be fair there are actions taken but it started this year only).
So to conclude this, yes Brazil is one expensive country to live in.

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