Dunga's making a big mistake trying to play the Magic Square setup with this current Brazil lineup. He doesn't have the players to suit this sort of a setup, and the Magic Square works well when the team is playing at a fast pace and fluidly, not rigidly as they currently are at the moment.
Neymar's being too easily closed down as he gets barely any support. It's not just Brazil's fault, though, as Neymar's been very selfish on the ball and hasn't been releasing it quickly enough to maintain possession. Fred has been useless on the left, but I'm not surprised by that. He doesn't have the qualities of a left-sided player and is better off being the shuttler/runner in midfield.
Speaking of which, Fernandinho and Elias are in no way a good midfield for a Magic Square. Fernandinho's too reckless in midfield, and Elias, just like before, has been poor in tracking the players and closing down the spaces.
Colombia have been much better in their 4-4-2 than Brazil have been. Colombia have been more fluid and free, and they've played at a faster pace, catching Brazil's defence and midfield off guard. Unlike Willian and Fred, James and Cuadrado have been cutting in, and Teo's done a better job in relieving himself of pressure than Neymar has.
Dunga has to switch to his favoured 4-2-3-1 to get more of a midfield control. He needs someone in midfield to occupy Sanchez and move Neymar to the left to get more space and time on the ball.
Pekerman, at this stage, is slightly lucky that Brazil aren't playing a midfield 3, but he's done a good job in keeping Colombia organised against Brazil. Sanchez has had an easy time closing down Neymar as Brazil have been sluggish so far. James has been given quite a bit of freedom with Fernandinho and Elias not paying enough attention to what's happening around them, and he's caused Brazil's midfield quite a few problems because of this. All they need to do is get someone more clinical up front than Falcao (Bacca!) in order to cause Brazil's defence even more problems.