How to Lose Investments

It is hard to imagine how Latin America's largest nation could do much more to discourage foreign investment. But Brazil--which already offers inflation galloping at 84% a year, xenophobic politicians, irresponsible strikes, sporadic power blackouts and water shortages--has managed to add another obstacle. After 16 months of debate, President Joao Goulart finally signed the toughest profits-control decree in the hemisphere. In 83 ambiguous articles, it says that foreign companies can send back in profit each year no more than 10% of their "registered investments."

The trouble is that no authority has determined whether the 10% applies to straight investment alone or to money poured back in as reinvestment as well. Threshing out all the vague legalisms will require at least three years; in the meantime, the profits of many companies may well be tied up in Brazil. Little matter. Brazil's economy has become so chaotic that nobody has been putting in or taking out much real money lately.

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