A graphic explanation on how a tax on exports neutralizes the Dutch disease without costs to exporters

The adequate way of neutralizing the Dutch disease is the imposition of a variable tax on the export of the commodity that originates the disease. If such tax is equivalent to the "size" of the Dutch disease, it will shifts to the right its supply curve of the commodity in relation to the exchange rate, giving the existing domestic supply and the international demand, the exchange rate will depreciate at the value of the tax, and the equilibrium exchange rate will move from the "current" to the "industrial" equilibrium.

The Dutch disease and its neutralization: a Ricardian approach

The Dutch disease is a major market failure originated in the existence of cheap and abundant natural or human resources that keep overvalued the currency of a country for an undetermined period of time, thus turning non profitable the production of tradable goods using technology in the state-of-the-art. It is an obstacle to growth on the demand side, because it limits investment opportunities. The severity of the Dutch disease varies according to the extent of the Ricardian rents involved, i.e., according to the difference between two exchange rate equilibriums: the ‘current’ or market rate and the ‘industrial’ rate - the one that make viable efficient tradable industries. Its main symptoms, besides overvalued currency, are low rates of growth of the manufacturing industry, artificially high real wages, and unemployment. Its neutralization requires managing the exchange rate. The principal instrument for that is a sales or export tax on the commodities that give origin to the Dutch disease. In order to neutralize it policymakers face major political obstacles since it involves taxing exports and reducing wages. Finally, this papers argues that there is an extended concept of Dutch disease: besides having its origin in natural resources, it may arise from cheap labor provided that the ‘wage spread’ in the developing country is considerably larger than in the developed one - a condition that is usually present.

Survey on ochratoxin A in Brazilian green coffee destined for exports

The presence of ochratoxin A (OTA) in foods has led some countries to establish regulatory limits. Although coffee is not a major source of OTA in human consumption, the European Community (EC) may establish limits in the near future, with possible economic impact on producing countries. This study measured the OTA content with HPLC in 37 samples of Brazilian green coffee exclusive destined to the export market and also verified a possible relation between coffee defects and OTA content. The results showed an OTA concentration ranging from < 0.16ng/g (detection limit) to 6.24ng/g (average of 3.20ng/g) for 37 samples. Of the five samples observed for defects, toxin content of sound beans ranged from 0.22 to 0.80ng/g (average 0.46ng/g) and of defective beans from 0.42 to 17.46 (average 4.52ng/g). Morphological differences among sound and defective beans showed no susceptibility for mould invasion under optical microscopy observation. One black bean depicted the presence of mould and spores on observation under Scanning Electron Microscope (SEM). According to this investigation, Brazilian green coffee for export complies with most limits in place.

Financial strategies for minimizing corporate income taxes under Brazil's new global tax system

In 1996, Brazil adopted a worldwide income tax system for corporations. This system represents a fundamental change in how the Brazílian government treats multinational transactions and the tax minimizing strategies relevant to businesses. In this article, we describe the conceptual basis for worldwide tax systems and the problem of double taxation that they create. Responses to double taxation by both the governments and the priva te sector are considered. Namely, the imperfect mechanisms developed by Brazil and other countries for mitigating double taxation are analyzed. We ultimately focus on the strategies that companies utilize in order not only to avoid double texetion, but also to take advantage of tax havens.

International transfer pricing restrictions: impact on corporate financial policy

Transfer pricing is a pervasive issue that presents significant tax savings potential concerning international enterprises. The authors discuss company incentives to manage transfer prices in an article appearing in the preceding issue of this journal. In response to these incentives, governments have increasingly enacted and enforced domestic restrictions on transfer prices. In this article, contemporary norms restricting transfer pricing are analyzed. The OEGO and US pricing standards are assessed and Brazil's recent application of these standards is considered. Transfer pricing methods are described and evidence of their use is presented. We conclude by describing an intercompany transfer pricing policy intended to facilitate internaI financiaI management and minimize externaI tax threats.

Impact of Babesia bovis and Babesia bigemina on the production of beef cattle in Uruguay

Uruguay is situated in a marginal area for the development of Boophilus microplus (30- 35- South Lat.) with important areas of enzootic instability for Babesia bovis and B. bigemina. The livestock products represent 70% of our exports, for wich reason it is fundamental to evaluate the losses in the production that these haemoparasites cause as basic information to take future decisions. In the period 1988-1990, several works were carried out by our laboratory to know the incidence of babesiosis in the reduction of liveweight gains. The results are shown and discussed in the work. Experiment I: the weight increase of the control group (x = 0,248kg/day), was 23% higher than that of the infected group with Babesia spp (from Uruguay), but significant statistical differences were not found (P < 0,05). These animals were kept in boxes and the food was controlled for 76 days. Experiment II: the incidence of Babesis spp (same strain ) was studied for 140 on Hereford heifers (n = 14) on natural pastures. The control group obtained x = 25,29kg of liveweight gain and it was 45% higher than that of the infected group, significant statistical difference were found (P < 0,05). Experiments with attenuated strains III: four studies were carried out inoculating B. bovis and B. bigemina in bovines about one year old, in different growth systems, searching for the limit of application. Significant statistical differences between those groups were found during the experiment (about 180 days) (P < 0,05). Experiment combining and pathogenic strains IV: the liveweight gain, in immune and challanged group (n = 14) was the same than that of the unchallenged group and did not show significant statistical differences (P < 0,05). However the control challenged group had less weight gain and statistical differences were found (P < 0,05). Although this is a preliminary information, it shows that: (a) the incidence of babesiosis on the reduction of weight gains is important; (b) the decrease in weight gain was not observed when attenuated strains were used; when the challenge was done in immunized animals, losses in liveweight gain were not observed. These results are discussed in order to plan future studis in different real systems of production.

Lack of tax diversity for tropical spastic paraparesis/human T-cell lymphotropic virus type 1 (HTLV-I) associated myelopathy development in HTLV-I-infected subjects in São Paulo, Brazil

The product of human T-cell lymphotropic virus type 1 (HTLV-1) tax gene has a transactivating effect of the viral and cellular gene expression. Genetic variations in this gene have been correlated with differences in clinical outcomes. Based upon its diversity, two closely related substrains, namely tax A and tax B, have been described. The tax A substrain has been found at a higher frequency among human T-cell leukemia virus type 1 (TSP/HAM) patients than among healthy HTLV-I-infected asymptomatic subjects in Japan. In this study, we determined the distribution of tax substrains in HTLV-I-infected subjects in the city of São Paulo, Brazil. Using the ACCII restriction enzyme site, we detected only tax A substrain from 48 TSP/HAM patients and 28 healthy HTLV-I carriers. The sequenced tax genes from nine TSP/HAM patients and five asymptomatic HTLV-I carriers showed a similar pattern of mutation, which characterizes tax A. Our results indicate that HTLV-I tax subtypes have no significant influences on TSP/HAM disease progression. Furthermore, monophyletic introduction of HTLV-I to Brazil probably occurred during the African slave trade many years ago.

Soil nutrient availability and its impact on fruit quality of Tahiti acid lime

The Tahiti acid lime in Brazil is mostly grown in the São Paulo State. The value of this crop production ranks among the ten most important fruits in the country. The Brazilian exports of Tahiti limes have increased in the last years with a corresponding increased demand for superior quality of fresh fruits, which is affected by mineral nutrients. Therefore, this study evaluated nutrient soil availability and its influence on nutritional status of trees based on the determination of leaf and fruit nutrient concentrations, fruit characteristics, and post harvest quality. Eleven commercial groves with trees older than 4-yr and differently managed were studied. Plots with six trees in each grove were sampled for soil (0-20 cm depth layer), leaf and fruit analyses with three replicates. Correlation coefficients were pair wised established for all variables. The results showed that N leaf concentration was well correlated with green color of fruit peel as measured by a color index (r = -0.71**), and which was optimum with Leaf-N around 22 g kg-1. Leaf-Ca was inversely correlated with fruit water loss after 14-day interval from harvest (r = -0.54*) demonstrating that Ca plays an important role in Tahiti fruit shelf-life. Data also suggested that increased fruit K concentration correlated with increased fruit water losses during storage (r >0.58*).

In vivo fluctuation of Tax, Foxp3, CTLA-4, and GITR mRNA expression in CD4+CD25+ T cells of patients with human T-lymphotropic virus type 1-associated myelopathy

HTLV-1 Tax expression exerts an inhibitory effect on the Foxp3 transcription factor in CD4+CD25+ T-regulatory cells (Treg). For a better understanding of the role of Tax mRNA in the gene expression of cellular markers we measured Tax, Foxp3, CTLA-4, GITR, TGF-β, and IL-10 mRNA in Treg cells of 50 patients with human T-lymphotropic virus type 1 (HTLV-1)-associated myelopathy/tropical spastic paraparesis (HAM/TSP; 27 women and 23 men; mean age: 56.7 years). The control group consisted of 23 non-infected subjects (12 women and 11 men) with a mean age of 51.3 years. Real-time PCR was used to measure mRNA of Tax proteins and several cellular markers of Treg function. Determinations revealed a high level of Tax mRNA in HAM/TSP (124.35 copies/100 CD4+CD25+ T cells). Foxp3, GITR, and CTLA-4 mRNA levels were lower in HAM/TSP patients (mean ± SD, 22.07 ± 0.78, 9.63 ± 0.36, and 4.54 ± 0.39, respectively) than in non-infected controls (47.15 ± 12.94, 22.14 ± 1.91, and 21.07 ± 2.31). Both groups had similar levels of TGF-β and IL-10. An inverse relationship was found between Tax levels and Foxp3, CTLA-4, and GITR levels. Conversely, there was a direct correlation between levels of Foxp3, GITR, and CTLA-4. Disease severity and evolution time did not correlate with Tax or Foxp3 levels. The present results suggest that Tax and Foxp3 mRNA vary with the same degree of disease severity in HAM/TSP patients. Tax fluctuations may affect CTLA-4 and GITR expression via the Foxp3 pathway, causing virus-induced dysfunction of CD4+CD25+ T cells in HAM/TSP patients.

Brazilian, Chinese, and Indian exports: is the regional market really a source of learning?

In some Latin American countries the exporting activity starts at a regional level, with producers only later venturing into more competitive markets. The implicit risk is that a country might never progress from the regional stage to a more global market. This article compares the experiences of Brazil, China and India. It is shown that Brazil relied on the regional market far more intensely than these Asian countries. There were clear gains accruing to China and India for having exploited more sophisticated markets from the very beginning of their export drive.

Alice Amsden's impact on Latin America

On March 15 2012, we lost Professor Alice Amsden, a great intellectual power in development economics. Her work was systematically marked by creativity, originality, relevance and her fearless commitment to always speak truth to power both in academic as well as in policy-making arenas. This In Memoriam concentrates on just one part of her great intellectual legacy: her impact to better understanding Latin America's development challenges, obstacles and policy options. Our paper focuses on three broad areas of her main influence in the region: the role of transnational corporations, the importance of manufactured exports for development, and industrial policy. As we here argue, in all of them, her work is and continues to be a substantial contribution to knowledge that policy makers will be well advised to take into account if the region is to finally enter a path of structural transformation and sustained economic and social development.