World Economy

This is what Brazil needs to get back on track, expert says

Brazil in turmoil
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Brazil in turmoil

Brazil can still turn things around despite its recent political and economic downturn, but it won't be easy, Marcos Troyjo, associate professor of international and public affairs at Columbia University, said Tuesday.

"Brazil has to be better engaged with the global economy, it has to expand the percentage of imports and exports in its GDP ... enact those reforms that allow it to compete more broadly in global markets," Troyjo told CNBC's "Squawk Box."

"There is homework that needs to be done," he said. "Unfortunately, under [President] Dilma Rousseff, that homework was not being done."


Brazil's new government loses key minister to scandal

This year has not been kind to Brazil. Earlier this month, Rousseff was suspended to stand trial on charges of breaking budgetary laws, while the country's economy continued to suffer from lagging oil prices.

Over the past year, U.S. crude has fallen about 20 percent.

"I think Brazil, up until 2010, when the economy grew by 7.5 percent, a China-like growth … it was driven forward by the performance of state-led corporations like Petrobras." Troyjo noted that Brazil benefited from China's appetite for certain commodities, which helped fuel "Brazilmania."

"But many of the reasons why this miracle was being operated simply vanished from the radar screen. There was a lot of fiscal irresponsibility, a lot of overspending. Of course, Brazil did not enact those urgent labor, fiscal and social security reforms that would help it harmonize its conditions to compete internationally. Now, when you add a picture of corruption and incompetence, … this of course has driven a lot of interest away from Brazil."