rio with its eyes on the prize 2016 summer olympic games firjan ny breakfast

Recte Rempublicam Gerere Gerindo a coisa pública corretamenteProper Management of the Public Good

1

RIO WITH ITS EYES ON THE PRIZE2016 Summer Olympic Games

FIRJAN NY BREAKFAST

Joaquim Vieira Ferreira LevySecretaria de Fazenda

October 2009



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Brazil’s fundamental sources of strength

20+ years of regular elections

20 years of trade liberalization

15 years of price stability

10 years of fiscal targets, established after deep fiscal restructuring at all levels of government

Strong banks, with high capitalization and credible supervision

Innovative social policies, with more jobs and education


3

Credibility in Policies

CPI – Target zones and actual realization


4

Diversity in TradeTrade surplus Main Exports

Tranps Equip

Steel

Chemicals

Machinery

Other0

5

10

15

20

25

30

35

40

2000

2008

Jul-09

Main Partners


5

Sound Net External Position

External Debt as % of GDP

External Debt and Ratings

Risk Premium and X rateClimbing the rating ladder


6

A strong domestic market

Auto production and sales

Wages and inflation

Investment

Domestic Credit


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Also helped by an active fiscal policy

Fiscal strength has allowed the government to move ahead with investment plans

PAC – National Program to Accelerate Growth is helping public investment since 2007

PAC will inject R$ 600+ billion in federal, public enterprises and subnational projects

B

R

AS I L

Fiscal Balance % GDP


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Fiscal can still provide a cushion

12-month Primary and Nominal Consolidated Fiscal Balance as % of GPD

Ext. public debt & Reserves

primary

nominal

Net public debt/GDP

Structural surplus by States and Municipalities


9

Real Interest Rates above 5%

Inflation-indexed NTN B bond yield

There is a large monetary cushion


10

… and an external cushion,Energy Independence

Oil demand/production

Small External Obligations

Interest Payments/Exports

A hot open capital market

Foreign Participation in Stock and Fixed Income markets


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… as well as a political cushion: Stability breeds a new

environment• Economic stability in Brazil has allowed people, firms, and

government to focus on micro issues, putting a premium on service

delivery and management issues

• subnational governments are responding to the new

environment in the same way companies did in the 1990s

when competition and stability forced them to change the

way they operated and improve the services they delivered.

• currently, there is a healthy competition among

subnational governments – good managers have been

rewarded by winning elections and attracting new private

investment to their states

• the federal government relies on states to conduct the

PAC


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Recent changes

at

subnational

level are best

illustrated by

the turn

around of Rio

de Janeiro

Vista

Chi

nesa

RI0


1313

With a US$ 200 billion GDP, the state has a diversified and open economy

Population .000 Area km2 000 GDP Billion US$R IO DE J ANE IR O 15.383 43 216,4

Argentina 40.302 2.767 338,7 Chile 16.285 757 181,5 Colombia 44.380 1.139 249,8 Venezuela 26.024 912 331,8

Czech Republic 10.229 79 217,2 Hungary 9.956 93 131,4 Portugal 10.643 92 255,5

Malaysia 24.821 330 214,7 Philippines 91.077 300 168,6 Nigeria 135.031 924 220,3 South Africa 43.998 1.220 300,4 https://www.cia.gov/library/publications/the-world-factbook/fields/2195.html (2008 est)

Rio is a world class economy


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Oil: one more factor to Rio´s energy

Rio produces 80% of Brazilian oil (1,7 mm bbl/day) and is where the PRE-SAL Tupy field is located

A 50+ US$ billion investment portfolio unaffected by crisis

Oil revenues channeled to pension & environment protection funds

Government focus is on service delivery, including improved personal and business security

R$ MM 2004 2005 2006 2007 2008Primary Surplus 2.212 2.223 1.850 3.064 4.924 Fiscal Balance 558 80 (319) 457 2.283

Fiscal Accounts of State of Rio de Janeiro


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•Securities Exchange Regulator

•Insurance Regulator

•Central Bank open market desk and self regulation financial institutions

•Brazil Development Bank

• Major Pension Funds (Petros, Previ, Eletros)

• Insurance/Reinssurance entrants (Lloyds´s) and IRB

• Asset management funds

•FioCruz (Pharm, Health)

•Cenpes (oil-gas)

•IMPA (math)

• CBPF (Physics)

•National Science Academy

•½ million college students

•Leading schools of economics

•Headquaters of largest telecomm companies

(Oi-telemar, Embratel)

Rio: strong in knowledge and financial services


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Rio de Janeiro: prime logistic platform

PORT of Rio

Arco Rodoviário-road Beltway

70% of Brazil s GDP is within 500 mls

PORT (Itaguai) and Thyssen mill

Dutra

BR 040BR 116 Bahia

COMPERJ

AirportOld Refinery

Porto do Açu

Nuclear Sub Shipyard

Nuclear Angra Plant


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Overhauling public finances pays for:

Rail service that gives people comfort and mobility to work, while reducing gas emission

New plants that are changing the sanitation landscape and cleaning the Guanabara Bay

New health care facilities and working positions

Straightforward security policies

All PAC counterparts and more

Sanitation Plant of Alegria – concluded in late 2008, after 12 years of construction

Goals of current administration


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Olympic games will foster confidence and focus public policy, setting deadlines

2007

2009


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… and now on…


2525

Thank you !Rio de Janeiro, o

melhor lugar para trabalhar

Rio de Janeiro, the best place to

work

[email protected]

ObrigadoThank You


26

Thank you

Niterói Campos Costa Verde

Teresópolis

Sefaz/RJ – excelência de serviços

rio with its eyes on the prize 2016 summer olympic games firjan ny breakfast

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