Such companies help satisfy the consumer urges of the tens of millions of Brazilians who have been lifted from poverty over the past decade. They're a magnet for other businesses. And most important, they can be a catalyst for improving Brazil's labor productivity, which rose by only 1.2 percent from 1990 to 2012, an increase well below that in China (8.4 percent) and India (4.4 percent).
With rising debt levels, plateauing demand for the riches that God gave it and a workforce that's all but tapped out, Brazil must improve productivity if it wants to grow faster. And that will take policies to promote economic competition.
The obstacles are entrenched enough to have earned their own name the "Brazil cost," shorthand for everything from the country's underdeveloped infrastructure to its overdeveloped bureaucracy. Near the top of what makes the world's seventh largest economy a perennial tail-dragger on competitiveness is a Byzantine tax system: According to the World Bank, compliance with 27 different tax codes can take businesses 2,600 hours a year the most in the world. Multinationals must also contend with high tariffs and laws that require them to use local components and partners. Such barriers help explain why a Brazilian pays 144 percent more than an American pays for a Toyota Corolla (even one built in Brazil), 329 percent more for a Sony PlayStation 4, and 89 percent more for Nike sneakers. Brazil's new middle class needs stronger purchasing power.
Reality check: it's an election year. President Dilma Rousseff has already boosted social spending and doubled down on fuel subsidies, and she's not about to make any new enemies (tax reform may come after the election, whisper her advisers). With the Olympics looming after the World Cup, she's also got plenty of high-profile infrastructure projects to complete. So enjoy the games. Buy some coveted sticker sets of your favorite World Cup players. And don't look for any hard choices or far-seeing economic reforms in Brazil before October.