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Brazilian politicians claim President Temer is making it easier and safer for foreigners to invest in the country's infrastructure
Key Brazilian politicians addressed LBS’s Brazil Forum in London on Friday 14 October, attempting to woo international investors with promises of greater security and transparency.
Moreira Franco, Executive Secretary of Brazil’s Investment Partnership Programme (PPI), blamed ex-president Lula da Silva for the country’s economic woes. “It’s not an exaggeration to say that there’s not one drawer in the economy cupboard that is not messy,” said Franco.
“We have committed to making necessary changes, especially to the social security situation [Brazil has one of the least sustainable pension systems in the world]. We have approved amendments to the constitution that will balance income, revenue and expenditure.”
Addressing a packed room, Franco outlined President Michel Temer’s framework for growth, Bridge to the Future. It promises greater transparency, reliability and legal certainty for foreigners investing in state-backed projects in Brazil. “We need to create jobs: the sector that generates most jobs is infrastructure,” he said.
Fernando Bezerra, Brazil’s mining and energy minister, said the government was keen to secure private investment for 34 infrastructure, oil and gas projects across the country. Moreover, there will be a round of bids for solar and wind energy (60% of Brazil’s energy is already renewable) in December.
“We are betting that the Brazilian economy will recover soon and it’s already showing signs,” said Bezerra. “We’re optimistic that the market will recognise our efforts.” Bezerra said he was also in talks with the finance ministry to review the prohibitive taxes involved in importing machinery and equipment.
Fabiano Fontes, Head of Infrastructure at Banco do Brasil (BB), said a strengthened economy based on investment in infrastructure would lead to higher living standards. Roads and railways from the south to the northeast would enable alternative routes for Brazilian producers exporting goods to the US and Asia. The Brazilian delegation is taking its message to New York and Tokyo next, then France, Spain, China and India.
Inviting investment in four Brazilian airports – Fortaleza, Salvador, Porto Alegro and Florianopolis – Fontes described a new tender model involving debentures: “The banks will assume the risk in the pre-operational phase,” he said.
Maurício Quintella, Minister of Transport, Ports and Civil Aviation, spoke frankly about the challenge of regaining the trust of the market. “Brazil is going through the biggest recession in our history because of wrong decisions. But we are now in a new situation with a new president and a new government: it is a new moment. Brazil is listening to the private sector as it never has before. ”
Brazil has 200 million inhabitants and the seventh biggest GDP in the world. Efforts to capitalise on the country’s vast mineral resources and rich agricultural land in the south have been plagued by inefficiency and corruption.
Michel Temer took office on 31 August after his predecessor Dilma Roussef was impeached for creative accounting that made the country’s economy appear in better shape than it was.
The event was organised by LBS's Brazil Club.