The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2013 - Avoiding the middle-income trapFGV Brazil
A few years ago, when China looked at Brazil with great interest, it was not only to estimate its potential as a supplier of food and basic supplies for expanding its infrastructure.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2012 - What to expect next yearFGV Brazil
IN DECEMBER 2011, most of the analysts interviewed by The Brazilian Economy did not hesitate to say that 2012 would be similar to 2011— that is, somewhat predictable and uneventful. And, in fact, there was no major turbulence in the domestic economy in 2012. But the year now ending did produce at least two surprises. The first is that estimates of gross domestic product (GDP) growth have been heading steadily downward and it is expected to hit only 1%—just a third of what even the most conservative projections expected early in the year.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2011 – Can Brazil become a creative economy?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2014 - Can Brazil find a route to competitiveness?FGV Brazil
If it is to join up with global production chains, Brazil must confront old problems that inhibit the competitiveness of industry.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2016 - Addressing the water and sanitation déficitFGV Brazil
Brazil needs to address the low efficiency of its investment in costly water and sanitation projects that delay development.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
July 2016 - Unemployment: How much longer?FGV Brazil
The current distressed labor market is likely to take a long time to improve.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
A proposed constitutional amendment to limit government spending renews the debate about the role of the Brazilian government in the economy, past and present.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2013 - Avoiding the middle-income trapFGV Brazil
A few years ago, when China looked at Brazil with great interest, it was not only to estimate its potential as a supplier of food and basic supplies for expanding its infrastructure.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2012 - What to expect next yearFGV Brazil
IN DECEMBER 2011, most of the analysts interviewed by The Brazilian Economy did not hesitate to say that 2012 would be similar to 2011— that is, somewhat predictable and uneventful. And, in fact, there was no major turbulence in the domestic economy in 2012. But the year now ending did produce at least two surprises. The first is that estimates of gross domestic product (GDP) growth have been heading steadily downward and it is expected to hit only 1%—just a third of what even the most conservative projections expected early in the year.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2011 – Can Brazil become a creative economy?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2014 - Can Brazil find a route to competitiveness?FGV Brazil
If it is to join up with global production chains, Brazil must confront old problems that inhibit the competitiveness of industry.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2016 - Addressing the water and sanitation déficitFGV Brazil
Brazil needs to address the low efficiency of its investment in costly water and sanitation projects that delay development.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
July 2016 - Unemployment: How much longer?FGV Brazil
The current distressed labor market is likely to take a long time to improve.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
A proposed constitutional amendment to limit government spending renews the debate about the role of the Brazilian government in the economy, past and present.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
January 2011 - Brazil: Moving Up in the world?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
April 2013 - Brazil: Is government economic activism misdirected?FGV Brazil
In response to lost investment and growth, government policies to stimulate the economy have fallen short of success—perhaps because the policies themselves are part of the problem.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2013 - Can the government foster innovation?FGV Brazil
An unprecedented multibillion-real plan is the latest federal government initiative to stimulate investment in research, development, and innovation (RD & I), diversify the production of goods and services, and improve productivity.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2011 - Recycling: Who pays for it?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Expanding the simplified tax system for small businesses may have higher costs and fewer productivity, employment, and income distribution benefits.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2012 - Why investment is still tied upFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2014 - Time for a route correctionFGV Brazil
With performance less than is necessary to meet Brazil's infrastructure demands and with funding scarce, investment needs to become more efficient.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2014 - Currency devaluation, limited effectFGV Brazil
A worsening external environment and the perception that the economy is deteriorating should keep the Brazilian real undervalued, but the recovery of industry will take much more than a devaluated currency.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2012 - Electric energy sector needs rewiringFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2013 - Fuel price policy: Who wins?FGV Brazil
International oil prices are up, demand for oil products in brazil is growing, but the main brazilian oil company is suffering from lower production and profits. this is more than just a corporate problem.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2013 - Next year’s elections already face headwindsFGV Brazil
AS BRAZIL PREPARES for election year 2014, economic uncertainty is pervasive. It is likely that 2014 will not be as spectacular as 2010, but forecasts of what will actually happen vary considerably. On the negative end, Brazil would encounter a perfect storm that might combine one or more downgrades of its sovereign rating with a steep devaluation of the exchange rate in the wake of rising U.S. interest rates.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2012 - Will the public-private partnership work?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
July 2014 - How to improve education qualityFGV Brazil
Education in Brazil has advanced in terms of school access, but its quality is still questionable. That calls not just for more and better investments in education but perhaps also for reformulation of the entire educational system.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2014 - Is time running out for the minimum wage policy?FGV Brazil
Economists analyze proposals for revising minimum wage policy in 2015 and ask, Should it be based on productivity?
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2013 - Where is the labor market heading?FGV Brazil
The labor market is correcting the excessive growth that was inconsistent with the pace of economic expansion. The question is whether policies to curb inflation and wage increases may adversely affect the gradual accommodation of the labor market and bring about deterioration in incomes, employment, and confidence.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2015 - Lower commodities prices depress recoveryFGV Brazil
The depressing international outlook, in which the only bright spot is the recovery of the US economy, and Brazil’s misguided policies for making its industry more competitive are likely to prevent a vigorous recovery of the country's exports in 2015, after a fall of 7% in 2014.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Investors, analysts, and economists who are concerned about the direction of fiscal policy, are becoming ever more skeptical about the direction of Brazil’s economy. Though all is not yet lost, if the country is to grow sustainably, the government must make a difficult choice between social programs and the tax burden.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2014 - The future of Latin America? Still up in the airFGV Brazil
In the last decade Latin America experienced an unparalleled economic expansion. The relocation of labor to more productive activities and the boom in commodity prices gave extra breadth to its economies. To a greater or lesser extent, Latin American countries have carried out structural reforms, reduced poverty, and seen a steep rise in domestic consumption.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
January 2011 - Brazil: Moving Up in the world?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
April 2013 - Brazil: Is government economic activism misdirected?FGV Brazil
In response to lost investment and growth, government policies to stimulate the economy have fallen short of success—perhaps because the policies themselves are part of the problem.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2013 - Can the government foster innovation?FGV Brazil
An unprecedented multibillion-real plan is the latest federal government initiative to stimulate investment in research, development, and innovation (RD & I), diversify the production of goods and services, and improve productivity.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2011 - Recycling: Who pays for it?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Expanding the simplified tax system for small businesses may have higher costs and fewer productivity, employment, and income distribution benefits.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2012 - Why investment is still tied upFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2014 - Time for a route correctionFGV Brazil
With performance less than is necessary to meet Brazil's infrastructure demands and with funding scarce, investment needs to become more efficient.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2014 - Currency devaluation, limited effectFGV Brazil
A worsening external environment and the perception that the economy is deteriorating should keep the Brazilian real undervalued, but the recovery of industry will take much more than a devaluated currency.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2012 - Electric energy sector needs rewiringFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2013 - Fuel price policy: Who wins?FGV Brazil
International oil prices are up, demand for oil products in brazil is growing, but the main brazilian oil company is suffering from lower production and profits. this is more than just a corporate problem.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2013 - Next year’s elections already face headwindsFGV Brazil
AS BRAZIL PREPARES for election year 2014, economic uncertainty is pervasive. It is likely that 2014 will not be as spectacular as 2010, but forecasts of what will actually happen vary considerably. On the negative end, Brazil would encounter a perfect storm that might combine one or more downgrades of its sovereign rating with a steep devaluation of the exchange rate in the wake of rising U.S. interest rates.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2012 - Will the public-private partnership work?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
July 2014 - How to improve education qualityFGV Brazil
Education in Brazil has advanced in terms of school access, but its quality is still questionable. That calls not just for more and better investments in education but perhaps also for reformulation of the entire educational system.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2014 - Is time running out for the minimum wage policy?FGV Brazil
Economists analyze proposals for revising minimum wage policy in 2015 and ask, Should it be based on productivity?
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2013 - Where is the labor market heading?FGV Brazil
The labor market is correcting the excessive growth that was inconsistent with the pace of economic expansion. The question is whether policies to curb inflation and wage increases may adversely affect the gradual accommodation of the labor market and bring about deterioration in incomes, employment, and confidence.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2015 - Lower commodities prices depress recoveryFGV Brazil
The depressing international outlook, in which the only bright spot is the recovery of the US economy, and Brazil’s misguided policies for making its industry more competitive are likely to prevent a vigorous recovery of the country's exports in 2015, after a fall of 7% in 2014.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Investors, analysts, and economists who are concerned about the direction of fiscal policy, are becoming ever more skeptical about the direction of Brazil’s economy. Though all is not yet lost, if the country is to grow sustainably, the government must make a difficult choice between social programs and the tax burden.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2014 - The future of Latin America? Still up in the airFGV Brazil
In the last decade Latin America experienced an unparalleled economic expansion. The relocation of labor to more productive activities and the boom in commodity prices gave extra breadth to its economies. To a greater or lesser extent, Latin American countries have carried out structural reforms, reduced poverty, and seen a steep rise in domestic consumption.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2015 - Powering up the electricity sectorFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
January 2015 - Rebalancing Brazil's economy will not be easyFGV Brazil
Dramatic events in the second half of 2014 transformed the scenario at the turn of the year in Brazil into a big question mark.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2014 - Fighting through water and sanitation problemsFGV Brazil
Public managers and the private sector join forces to overcome Brazil’s longstanding difficulties in providing clean water and sanitation services.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2015 - Getting productivity back on trackFGV Brazil
Brazil’s growth will not resume without policies to make Brazilian business more productive. The end of the first quarter was marked by the realization that tight monetary and fiscal policies may take time to correct the economy’s imbalances and that high inflation and low growth may last longer than hoped.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2015 - New China, Old ChallengesFGV Brazil
Change in the growth pattern of the world's second largest economy has exposed structural problems in Brazil that will have to be addressed if the country is to gain lost traction in the Chinese market.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2014 - Is inclusive growth being derailed?FGV Brazil
Next year could be a real turning point for Brazil, depending on how re-elected President Dilma Rousseff and her administration address two major challenges.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2013 - Brazil’s rising trade imbalanceFGV Brazil
The Brazilian trade balance deficit in the first seven months of 2013 was US$5 billion, the highest recorded since 1993. It has deeply disappointed the expectations of analysts, who hoped for a recovery last July.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
February 2015 - Can natural gas make power supply reliable?FGV Brazil
Power interruptions make it clear that something is needed to plug the holes in Brazil’s energy matrix. One possible long-term solution for the recurring drains on energy may be natural gas.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2016 - Recovery still uncertainFGV Brazil
Improvement in some indicators suggests that the recession may be bottoming out, but there are still many uncertainties about the likely speed of an economic recovery.
This is the last edition of The Brazilian Economy, one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2011 - Brazil: World’s breadbasketFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2015 - Water: How to turn the tap back onFGV Brazil
The loss of pace in the Brazilian economy, beginning in 2011 and worsening ever since, surprised many analysts and is still heavily debated. There is no consensus on whether the deceleration arose from international or internal factors.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
February 2014 - 20 years after the Real Plan, why does growth remain elusive?FGV Brazil
Brazil celebrates two decades of monetary stabilization and introduction of the real , but has yet to find the formula for sustained growth.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2013 - Can Brazil get its cities moving?FGV Brazil
Traffic jams are strangling Brazil’s large cities and causing billions of dollars in losses, requiring substantive changes in urban planning. A study by Marcos Cintra, vice president, Getulio Vargas Foundation (FGV), found that the opportunity cost of time lost by people in traffic jams and the financial cost of additional spending on fuel, goods transport, and pollution controls reached US$20 billion in São Paulo city in 2012.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
April 2014 - Calming the financial watersFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Similar to November 2015 - The need to modernize Brazilian industry (19)
What are the chances of your country winning the 2018 World Cup?
FGV's mathematical model predicts that Brazil has the greatest chances of winning.
http://fgv.br/emap/copa-2018
Interval observer for uncertain time-varying SIR-SI model of vector-borne dis...FGV Brazil
The issue of state estimation is considered for an SIR-SI model describing a vector-borne disease such as dengue fever, with seasonal variations and uncertainties in the transmission rates. Assuming continuous measurement of the number of new infectives in the host population per unit time, a class of interval observers with estimate-dependent gain is constructed, and asymptotic error bounds are provided. The synthesis method is based on the search for a common linear Lyapunov function for monotone systems representing the evolution of the estimation errors.
Date: 2017
Authors:
Soledad Aronna, Maria
Bliman, Pierre-Alexandre
Ensuring successful introduction of Wolbachia in natural populations of Aedes...FGV Brazil
The control of the spread of dengue fever by introduction of the intracellular parasitic bacterium Wolbachia in populations of the vector Aedes aegypti, is presently one of the most promising tools for eliminating dengue, in the absence of an efficient vaccine. The success of this operation requires locally careful planning to determine the adequate number of individuals carrying the wolbachia parasite that need to be introduced into the natural population. The introduced mosquitoes are expected to eventually replace the Wolbachia-free population and guarantee permanent protection against the transmission of dengue to human. In this study, we propose and analyze a model describing the fundamental aspects of the competition between mosquitoes carrying Wolbachia and mosquitoes free of the parasite. We then use feedback control techniques to devise an introduction protocol which is proved to guarantee that the population converges to a stable equilibrium where the totality of mosquitoes carry Wolbachia.
Date: 2015-03-19
Authors:
Bliman, Pierre-Alexandre
Soledad Aronna, Maria
Coelho, Flávio Codeço
Silva, Moacyr da
The resource curse reloaded: revisiting the Dutch disease with economic compl...FGV Brazil
This paper shows that the Dutch disease can be more formally characterised as low economic complexity using ECI-type indicators; there is a solid and robust inverse relationship between exports concentrating on natural resources and economic complexity as measured by complexity indicators for a database of 122 countries from 1963 to 2013. In a large majority of cases, oil answers for shares in excess of 50% of exports. In addition to empirical panel analysis, we address case studies concerned with Indonesia and Nigeria and introduce a brief review of the theoretical literature on the topic. Indonesia is considered in the literature as a good example in avoiding the negative effects of the Dutch disease, whereas Nigeria is taken as a bad example in terms of institutions and policies adopted during the seventies and eighties. The empirical results show that complexity analysis and Big Data may offer significant contributions to the still-current debate surrounding the Dutch disease.
Date: 2017-03
Authors:
Camargo, Jhean Steffan Martines de
Gala, Paulo
The Economic Commission for Latin America (ECLA) was right: scale-free comple...FGV Brazil
The main purpose of this paper is to apply big-data and scale-free complex network techniques to the study of world trade, with a specific focus on the investigation of ECLA and structuralist ideas. A secondary objective is to illustrate the potentialities of the use of the new science of complex networks in economics, in what has been recently referred to as an econophysics research agenda. We work with a trade network of 101 countries and 762 products (SITC-4) which generated 1,756,224 trade links in 2013. The empirical results based on network analysis and computational methods reported here point in the direction of what ECLA economists used to argue; countries with higher income per capita concentrate in producing and exporting manufactured and complex goods at the center of the trade network; countries with lower income per capita specialize in producing and exporting non-complex commodities at the network’s periphery.
Date: 2017-03
Authors:
Gala, Paulo
Camargo, Jhean Steffan Martines de
Freitas, Elton
Cost of equity estimation for the Brazilian market: a test of the Goldman Sac...FGV Brazil
As an approach to determining the degree of integration of the Brazilian economy, this paper seeks to test the explanatory power of the Goldman Sachs Model for the expected returns by a foreign investor in the Brazilian market during the past eleven years (2004-2014). Using data for the stocks of 57 of the most actively traded firms at the BM&FBovespa, it begins by testing directly the degree of integration of the Brazilian economy during this period, in an attempt to better understand the context in which the model has been used. In sequence, in an indirect test of the Goldman Sachs model, the risk factor betas (market risk and country risk) of the sample stocks were estimated and a panel regression of expected stock returns on these betas was performed. It was found that country risk is not a statistically significant explanation of expected returns, indicating that it is being added in an ad hoc fashion by market practitioners to their cost of equity calculations. Thus, although there is evidence of a positive and significant relationship between systematic risk and return, the results for country risk demonstrate that the Goldman Sachs Model was not a satisfactory explanation of expected returns in the Brazilian market in the past eleven years, leading us to question the validity of its application in practice. By adding a size premium factor to the model, there is evidence of a negative and significant relationship between companies’ size and return, although country risk remains not satisfactory to explain stock expected returns.
Date: 2017-03
Authors:
Guanais, Luiz Felipe Poli
Sanvicente, Antonio Zoratto
Sheng, Hsia Hua
A dynamic Nelson-Siegel model with forward-looking indicators for the yield c...FGV Brazil
This paper proposes a Factor-Augmented Dynamic Nelson-Siegel (FADNS) model to predict the yield curve in the US that relies on a large data set of weekly financial and macroeconomic variables. The FADNS model significantly improves interest rate forecasts relative to the extant models in the literature. For longer horizons, it beats autoregressive alternatives, with a reduction in mean absolute error of up to 40%. For shorter horizons, it offers a good challenge to autoregressive forecasting models, outperforming them for the 7- and 10-year yields. The out-of-sample analysis shows that the good performance comes mostly from the forward-looking nature of the variables we employ. Including them reduces the mean absolute error in 5 basis points on average with respect to models that reflect only past macroeconomic events.
Date: 2017-03
Authors:
Vieira, Fausto José Araújo
Chague, Fernando Daniel
Fernandes, Marcelo
Improving on daily measures of price discoveryFGV Brazil
We formulate a continuous-time price discovery model in which the price discovery measure varies (stochastically) at daily frequency. We estimate daily measures of price discovery using a kernel-based OLS estimator instead of running separate daily VECM regressions as standard in the literature. We show that our estimator is not only consistent, but also outperforms the standard daily VECM in finite samples. We illustrate our theoretical findings by studying the price discovery process of 10 actively traded stocks in the U.S. from 2007 to 2013.
Date: 2017-03
Authors:
Dias, Gustavo Fruet
Fernandes, Marcelo
Scherrer, Cristina Mabel
Disentangling the effect of private and public cash flows on firm valueFGV Brazil
This paper presents a simple model for dual-class stock shares, in which common shareholders receive both public and private cash flows (i.e. dividends and any private benefit of holding voting rights) and preferred shareholders only receive public cash flows (i.e. dividends). The dual-class premium is driven not only by the firm's ability to generate cash flows, but also by voting rights. We isolate these two effects in order to identify the role of voting rights on equity-holders' wealth. In particular, we employ a cointegrated VAR model to retrieve the impact of the voting rights value on cash flow rights. We finnd a negative relation between the value of the voting right and the preferred shareholders' wealth for Brazilian cross- listed firms. In addition, we examine the connection between the voting right value and market and firm specific risks.
Date: 2017-03
Authors:
Autor
Scherrer, Cristina Mabel
Fernandes, Marcelo
Mandatory IFRS adoption in Brazil and firm valueFGV Brazil
Using diff-in-diff approaches and the propensity-score matching, this study focuses on firm-level Tobin´s q and Market-to-book outcomes for Brazilian firms who in 2008 were required by Law 11.638/07 to adopt the full International Financial Reporting Standards (IFRS) by 2010. Brazil’s tier-system of corporate governance standards for publicly-traded firms, its uniquely wholesale adoption of the IFRS, and the previously considerable gap between its national GAAP and IFRS readily lend the scenario to research, which thus far finds small or inconsistent results when focused on IFRS adoption-related outcomes in Europe and China. However, while these features recommend the transitioned Brazilian equity market to analysis, additional unique features, such as its small population size and its limited historical data -- of varied quality – increase the challenge in selecting a suitable empirical methodology. Using quarterly data from 2006-2011, control firms in the Nivel II and Novo Mercado tiers of Bovespa which already complied with higher quality accounting standards are matched to treatment firms in the Regular and Nivel I tiers with similar averaged values of size and sector. Our results suggest that there is a positive impact on Tobin´s q and Market-to-book for firms who are forced to adopt IFRS in Brazil. We can observe the same results when we consider all variables winsorized at 5% level. We also find a positive relation between the firm value (measured by Tobin´s q and Market-to-book) and net income. Firms with higher net income are more likely to have higher Tobin´s q and Market-tobook. In an opposite way, we find a negative relation among firm value, size, Ebit-to-sales, sales growth and PPE-to-sales. All results are statistically significant at 1% level. '
Date: 2017-03
Authors:
Sampaio, Joelson Oliveira
Gallucci Netto, Humberto
Silva, Vinícius Augusto Brunassi
Dotcom bubble and underpricing: conjectures and evidenceFGV Brazil
We provide conjectures for what caused the price spiral and the high underpricing of the dotcom bubble of 1999–2000. We raise two conjectures for the price spiral. First, given the uncertainty about the growth opportunities generated by the new technologies and their spillover effects across technology industries, investors saw the inflow of a large number of high-growth firms as a sign of high growth rates for the market as a whole. Second, investors interpreted the wave of highly underpriced IPOs as an opportunity to obtain gains by investing in newly public companies. The underpricing resulted from the emergence a large cohort of firms racing for market leadership. Fundamentals pricing at the IPO was part of their strategy. We provide evidence for our conjectures. We show that returns on NASDAQ composite index are explained by the flow of high-growth (or highly underpriced) IPOs; the high underpricing can be fully explained by firms’ characteristics and strategic goals. We also show that, contrary to alternatives explanations, underpricing was not associated with top underwriting, there was no deterioration of issuers’ quality, and top underwriters and analysts became more selective.
Date: 2017-03
Authors:
Autor
Carvalho, Antonio Gledson de
Pinheiro, Roberto Benjamin
Sampaio, Joelson Oliveira
Contingent judicial deference: theory and application to usury lawsFGV Brazil
Legislation that seems unreasonable to courts is less likely to be followed. Building on this premise, we propose a model and obtain two main results. First, the enactment of legislation prohibiting something raises the probability that courts will allow related things not expressly forbidden. In particular, the imposition of an interest rate ceiling can make it more likely that courts will validate contracts with interest rates below the legislated cap. Second, legal uncertainty is greater with legislation that commands little deference from courts than with legislation that commands none. We discuss examples of effects of legislated prohibitions (and, in particular, usury laws) that are consistent with the model.
Date: 2017-03
Authors:
Guimarães, Bernardo
Salama, Bruno Meyerhof
Education quality and returns to schooling: evidence from migrants in BrazilFGV Brazil
We provide a new education quality index for states within a developing country using 2010 Brazilian data. This measure is constructed based on the notion that the financial returns obtained from an additional year of schooling can be
seen as being derived from the value that market forces assign to this education. We use migrant data to estimate returns to schooling of individuals who studied in different states but who work in the same labor market. We find very heterogeneous educational qualities across states: the poorest Brazilian region presents education quality levels that are approximately equal to one-third of the average of all other regions, a gap three times larger than the one suggested by standardized test scores. We compare our index with standardized test scores, educational outcome variables, and public expenditure per schooling stage at the state level, producing new evidence related to education in a large developing country. We conduct an education quality-adjusted development accounting exercise for Brazilian states and find that human capital accounts for 26%-31% of output per worker differences. Adjusting for quality increases human capital’s explanatory power by 60%.
Date: 2017-02
Authors:
Brotherhood, Luiz Mário
Ferreira, Pedro Cavalcanti
Santos, Cézar Augusto Ramos
On October 31st and November 1st, 2016, the Center for Regulation and Infrastructure from Fundação Getulio Vargas (FGV CERI) organized a two-day workshop discussion in collaboration with the World Bank and ABRACE. The event gathered regulators, government representatives, academics, operators, financial institutions and investors. The debate focused on the main challenges faced by the current restructuring process of the Brazilian gas industry. This document presents the main points discussed during the debates.
Date: 2017-01
Authors:
Vazquez, Miguel
Amorim, Lívia
Dutra, Joísa Campanher
The impact of government equity investment on internationalization: the case ...FGV Brazil
We examine the impact of government equity ownership on the degree of internationalization of emerging market firms. Our analysis of 173 Brazilian publicly traded firms from 2002 to 2011 shows that the higher the equity held by the state through the state investment bank and the pension funds of SOEs and privatized SOEs, the higher the firm’s degree of internationalization. Firms in which the government shared control with families, and with both families and foreigners, had a higher degree of internationalization. Our findings underline the importance of the institutional context in explaining the internationalization of Brazilian firms.
Date: 2016
Author:
Sheng, Hsia Hua
Techno-government networks: Actor-Network Theory in electronic government res...FGV Brazil
The Actor-Network Theory (ANT) is a theoretical approach for the study of controversies associated with scientific discoveries and technological innovations through the networks of actors involved in such actions. This approach has generated studies in Information Systems (IS) since 1990, however few studies have examined the use of this approach in the e-government area. Thus, this paper aims to broaden the theoretical approaches on e-government, by presenting ANT as a theoretical framework for e-government studies via published empirical work. For this reason, the historical background of ANT is described, duly listing its theoretical and methodological premises. In addition to this, one presented ANT-based e-government works, in order to illustrate how ANT can be applied in empirical studies in this knowledge area.
Date: 2016
Authors:
Fornazin, Marcelo
Joia, Luiz Antonio
Condemning corruption while condoning inefficiency: an experimental investiga...FGV Brazil
This article reports results from an economic experiment that investigates to what extent voters punish corruption and waste in elections. While both are responsible for a loss of welfare for voters, they are not necessarily perceived as equally immoral. The empirical literature in political agency has not yet dealt with these two dimensions that determine voters’ choices. Our results suggest that morality and norms are indeed crucial for a superior voting equilibrium in systems with heterogeneous politicians: while corruption is always punished, self-interest alone – in the absence of norms – leads to the acceptance and perpetuation of waste and social losses.
Date: 2016
Authors:
Arvate, Paulo Roberto
Souza, Sergio Mittlaender Leme de
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
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Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
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2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
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A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
November 2015 - The need to modernize Brazilian industry
1. A publication of the Getulio Vargas Foundation • November 2015 • vol. 7 • nº 11
THE BRAZILIAN
ECONOMY
Concessions
The Law of Concessions:
20 years later
Latin America
Latin America is put to the test
Interview
Marilene Ramos
President of the Brazilian
Environmental Agency
Brazilian industries have been losing ground to
competitors and seem to have lost the ability
to expand markets. What can be done?
The need
to modernize
Brazilian industry
2. INTERVIEW
2 November 2015 Ÿ The Brazilian Economy2
INTERVIEW
Economy, politics, and policy issues
A publication of the Brazilian Institute of
Economics of Getulio Vargas Foundation. The views
expressed in the articles are those of the authors
and do not necessarily represent those of the IBRE.
Reproduction of the content is permitted with
editors’ authorization. Letters, manuscripts and
subscriptions: Send to
thebrazilianeconomy.editors@gmail.com.
Chief Editor
Vagner Laerte Ardeo
Managing Editor
Claudio Roberto Gomes Conceição
Senior Editor
Anne Grant
Production Editor
Louise Pinheiro
Editor
Solange Monteiro
Art Editors
Ana Elisa Galvão
Marcelo Utrine
Sonia Goulart
Contributing Editors
Chico Santos – Concessions
Claudio Conceição – Cover Story
Cristina Alves – Cover Story
THE BRAZILIAN
ECONOMY
GETULIO VARGAS FOUNDATION, FGV
The Getulio Vargas Foundation is a private, nonpartisan, nonpro-
fit institution established in 1944, and is devoted to research and
teachingofsocialsciencesaswellastoenvironmentalprotection
and sustainable development.
Executive Board
President: Carlos Ivan Simonsen Leal
Vice-Presidents: Francisco Oswaldo Neves Dornelles, Marcos
Cintra Cavalcanti de Albuquerque, and Sergio Franklin
Quintella.
Address
Rua Barão de Itambi, 60
Botafogo – CEP 22231-000
Rio de Janeiro – RJ – Brazil
Phone: 55(21)3799-6840
Email: ibre@fgv.br
Web site: http://portalibre.fgv.br/
BRAZILIAN INSTITUTE OF ECONOMICS, IBRE
The institute was established in 1951 and works as the “Think
Tank” of the Getulio Vargas Foundation. It is responsible for
calculating of the most used price indices and business and
consumer surveys of the Brazilian economy.
Director: Luiz Guilherme Schymura de Oliveira
Vice-Director: Vagner Laerte Ardeo
Directorate of Institutional Clients:
Rodrigo de Moura Teixeira
Directorate of Public Goods:
Vagner Laerte Ardeo
Directorate of Economic Studies:
Márcio Lago Couto
Directorate of Planning and Management:
Vasco Medina Coeli
Directorate of Publication:
Claudio Roberto Gomes Conceição
Comptroller:
Célia Reis de Oliveira
3. 3November 2015 Ÿ The Brazilian Economy 3
News Briefs
5 Fitch cuts Brazil’s
rating … Jobless rate
unchanged, wages
drop … current
account deficit
widens … new low for
consumer confidence
… loan defaults near
two-year high …
Mitsui buys into Petrobras unit …unemployment climbs …
strike slashes oil production … industry output still falling …
opposition seeks Rousseff impeachment … Lula supports
austerity measures … construction tycoon sentenced for
corruption … government expects negative primary balance.
Cover Stories
8 The need to modernize Brazilian industry
The share of
manufacturing in the
economy is now the
lowest in history, just
10.9% compared to
35.9% in 1985. Cristina
Alves and Claudio
Conceição report on
recent studies that
pinpoint where the main problems are. They also identify
Brazilian companies that have bucked the trend to compete
successfully in world markets.
17 Brazil: Out of the global market
In recent years China has snapped up some of Brazil’s major
markets, notably making inroads even in Latin America.
Cristina Alves reports on recent studies by IBRE researcher
Lia Valls Pereira that quantify exactly how much Brazil has
regressed and what the government in particular must do to
try to win back the lost ground.
Concessions
20 The Law of Concessions: 20 years later
Chico Santos reports on an
October FGV seminar on “20
Years of the Concession Law.”
Since the law was enacted,
Brazil has made unquestionable
advances, especially in services
infrastructure, but bottlenecks
persist. Participants identified
progress, questioned the role of
government, and what can be learned from other countries
for Brazil to reduce costs and delays to reduce the risk for
investors. Transport, energy and the environment, and
telecoms are highlighted.
Latin America
31 Latin America is put to the test
Minimal growth and inflationary pressures are testing the
credibility of the policies and institutions of Latin American
countries. Solange Monteiro reports on the latest IMF analysis
of the region’s economy, which calls for structural adjustments
in most countries in the region. For Brazil, because it sees the
fiscal situation as worsening and the political crisis to be deep,
the IMF sees no possibility of a short-term economic recovery.
Interview
38 A call for clarity
Environmental licensing has
been at the forefront of debate
about how Brazil can execute
projects more efficiently.
Marilene Ramos, new president
of the Brazilian Environmental
Agency (IBAMA), explains to
Solange Monteiro how IBAMA
is pushing to increase transparency and reduce discretion so
that it can streamline the licensing process. She also calls for
“higher-level guidance to clearly define for the environmental
area which projects are of strategic importance for the
country’s development.”
THE BRAZILIAN
ECONOMYIN THIS ISSUE
Brazilian Institute of Economics | November 2015
4. 4 November 2015 Ÿ The Brazilian Economy4
A study by Claudio Considera and Juliana
Carvalho, researchers at the Brazilian Institute
of Economics, has exposed the harsh realities
of Brazilian manufacturing, where a number of
sectors have lost significant ground over the years.
Many have been virtually wiped out in foreign
markets. The study shows that though earlier
the share of the manufacturing industry in the
economy went up dramatically, from 15% in 1939
to 35.9% in 1985, it has since been in almost free
fall except for a brief recovery between 1999 and
2004. In 2014, manufacturing recorded its smallest
share of the economy in 65 years, a meager
10.9%. The study is complemented by a study
by IBRE colleague Lia Valls Pereira that illustrates
dramatically how Brazilian manufactured goods
have lost markets to Chinese exports, particularly
in South America.
The outlook remains bleak: according to IBRE
projections, manufacturing production can be
expected to fall by 9.8% in 2015. The International
Monetary Fund (IMF) estimates that output in
Latin America generally will fall by 0.3% this year,
the first decline since 1983 except for 2009, when
it felt the effects of the global financial crisis.
Acknowledging that the crisis was deeper than
expected, the IMF stated bluntly that there is no
possibility of a short-term economic recovery for
Brazil, which is confronted by a worsening fiscal
situation and a deep political crisis.
How might it be possible to get industry back
in shape when the outlook is so discouraging?
Some Brazilians companies have proved it can
be done. Embraer, Weg, and Marcopolo among
others have shown that a careful strategy of
investment in innovation, training workers, and
diversifying markets has made it possible for
them to successfully deal with the current crisis.
The government could help by promoting greater
integration in global supply chains and keeping
the exchange rate competitive.
Addressing infrastructure bottlenecks could
also significantly improve the competitiveness of
Brazilian industry. Twenty years after concessions
became part of national life, much progress
has been made in utilities infrastructure, with
installation of a modern telecommunications
network, nearly 10,000 kilometers of roads in
good condition, and the recent expansion and
modernization of airports. But infrastructure
bottlenecks are particularly noticeable in logistics
and sanitation. These can only be addressed
by attracting private investment, which implies
improvements in the business environment.
Editors’ Note
THE BRAZILIAN
ECONOMY
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thebrazilianeconomy.editors@gmail.com
5. 5November 2015 Ÿ The Brazilian Economy
BRAZIL NEWS BRIEFS
Photo:RovenaRosa/AgenciaBrasil.
Fitch cuts Brazil’s rating
Fitch has lowered Brazil’s debt rating one
notchtoBBB-,withanegativeoutlook,citing
risinggovernmentdebt,difficultyinshoring
up the budget, and the weak economy.
Fitch also noted that political uncertainty
was affecting the government’s ability to
implement legislation and fiscal reform.
(October 16)
Jobless rate unchanged, wages
drop
Unemployment remained unchanged
in September from August at 7.6%,
government statistics agency IBGE said.
Wages adjusted for inflation fell 0.8% from
August (4.3% from September 2014), to an
average of US$552.80. (October 22)
Current account deficit widens in
September
The external current account deficit for
September was wider than expected at
US$3.1 billion, up from US$2.5 billion in
August, the central bank said. Year-on-year,
however,thedeficitshrank63.3%,reflecting
continuing current account adjustment
since the start of the year, mainly because
the Brazilian real has depreciated. Net
foreign direct investment for September
wasapleasantsurprise,risingtoUS$6billion.
(October 23)
New low for consumer confidence
Brazilianconsumerconfidencefellforasixth
straight month in October as a deepening
politicalcrisisstokedpessimism.TheGetulio
VargasFoundation(FGV)saiditsconfidence
indexfellfrom76.3inSeptemberto75.7,the
lowest since the data series began in 2005.
(October 26)
Petrobras sells shares in gas
distribution unit
Japan-basedMitsuihassignedanagreement
withstate-oilcompanyPetrobrastoacquire
49% of the shares of natural gas distribution
unit Petrobras Gás (Gaspetro) for about
US$489 million. Gaspetro has equity stakes
ECONOMY AND BUSINESS
inlocaldistributioncompaniesin19Brazilian
states. (October 27)
Loan defaults at near two-year
high
Bank loans delinquent for at least 90 days
were again unusually high in September,
in response to the recession and rising
interest rates. The 90-day default ratio
was the equivalent of 4.9% of outstanding
non-earmarked loans, the central bank
reported. This was the highest for the ratio
since October 2013, when it reached 5%.
(October 27)
8.8 million looking for jobs
Unemployment in Brazil climbed to 8.7% of
the active population in the quarter ending
with August, the government said—far
higher than the 6.9% recorded in August
2014, according to IBGE. The number of
jobless workers went up 1.21 million for
the year; 8.8 million were looking for jobs.
The population active in the labor market
remainedstableat92.1million.(October31)
Strike slashes oil production
A strike that began on November 1st
has reduced Petrobras oil production by
273,000 barrels a day, 13% of its output,
the company said. However, Petrobras
reported that fuel distribution has not
been affected and it does not expect
supply shortages. (November 3)
Industry output still falling
Industrial output fell for the fourth straight
month in September, government data
show. Production fell a seasonally adjusted
1.3% from August, IBGE said; it was down
10.9 % from a year earlier, the steepest drop
since April 2009. (November 4)
Annual inflation nearing 10%
Annual inflation accelerated in October
to just below 10%, the highest reading in
almost 12 years, after fuel and food prices
shot up. Consumer prices rose 9.93% for
the 12 months through October, IBGE said.
(November 6)
Retail sales fall in September
Retailsalesinfellforaneighthstraightmonth
in September as the recession worsened.
Retail sales volumes excluding automobiles
and building materials dropped by 0.5%
month-on-moth in September and 6.2% in
September from a year earlier, government
statistics agency IBGE said. (November 12)
Petrobras employees on strike
6. 6 November 2015 Ÿ The Brazilian Economy
BRAZIL NEWS BRIEFS
POLITICS
ECONOMIC POLICY
Opposition files petition to
impeach Rousseff
Brazil’s opposition has petitioned to
impeachPresidentDilmaRousseff,accusing
her of illegal accounting practices. One
petition author is a founder of Rousseff’s
Workers’ Party. Speaker of the lower
house Eduardo Cunha must now decide
whether to submit the petition to the
entire Congress, which could trigger an
impeachment trial. (October 21)
Lula urges support for austerity
measures
In response to weeks of attacks against the
policyoffiscaladjustment,formerpresident
Lula da Silva has urged the ruling Workers’
Party to back fiscal austerity measures in
Congress, endorsing the efforts of Finance
MinisterJoaquimLevytoreducethedeficit.
Members of the party have opposed
moves by President Rousseff to cut public
spending and social benefits in order to
balance overdrawn accounts and restore
investor confidence in Brazil. Lula warned
party leaders that Brazil had no alternative
buttotightenbeltstopulltheeconomyout
of its deepest slump in decades; saying the
party’s future depended on it.
Central bank keeps interest rate
unchanged
As expected, the Monetary Policy
Committee (COPOM) kept the central
bank policy rate unchanged at 14.25%.
The decision was unanimous. According
to its post-meeting statement, the
COPOM believes that holding the rate
steady for a “sufficiently prolonged
period” is necessary to make sure inflation
converges to the midpoint of the target
range, and noted that monetary policy
will “remain vigilant.” (October 22) The
bank later acknowledged it was no longer
committed to bringing inflation back to
the 4.5% official target in late 2016, but
instead aimed to lower inflation “in a
relevant horizon.” (October 29)
Government 2015 fiscal target
revised
For the second time the government has
revisedits2015fiscalprimarybalancetarget,
originally a slight surplus, down now to a
deficit of 0.85% of GDP (US$13.32 billion).
Estimated revenues have fallen short, and
no further progress in cutting expenditures
is expected. The government also said that
the primary deficit might almost double, to
US$26.52 billion. (October 27)
Meirelles urges continued fiscal
adjustment
Brazil’s former central bank chief Henrique
Meirelles, touted as a possible replacement
for Finance Minister Joaquim Levy, said
that the government needs to continue its
fiscal adjustment program, adding that the
economy is better prepared now than in
the past to face headwinds. Meirelles and
Levy both spoke at a lunch for lawmakers
and business leaders on November 11th in
Brasilia. Both insisted that fiscal austerity
is crucial for Brazil to regain investor trust
and for the economy to grow again.
(November 11)
Construction tycoon sentenced in
corruption scandal
Judge Sergio Moro has convicted Sergio
Cunha Mendes of corruption, money
laundering, and racketeering for paying
R$31.5 million (US$8.3 million) in bribes to
obtain contracts with state-run Petrobras
and ordered him to repay Petrobras that
amount. Seven other people, including
former Petrobras director of refining and
supply Paulo Roberto Costa, were also
convicted. Costa, who helped prosecutors
unravel Brazil’s largest-ever corruption
scandal in return for a plea bargain deal, is
under house arrest in Rio de Janeiro. The
treasurer of the ruling Workers’ Party, João
Vaccari, is already serving 15 years in prison
for corruption and money laundering.
The sentences, considered stiff for white-
collar crime in Brazil, may be appealed.
(November 4)
Former president Lula da Silva
Photo:FabioRodriguesPozzebom/AgenciaBrasil.
Photo:ValterCampanato/AgenciaBrasil.
Former central bank governor
Henrique Meirelles
8. November 2015 Ÿ The Brazilian Economy8 November 2015 Ÿ The Brazilian Economy
COVER STORY
Brazilian industries have been losing ground
to competitors and seem to have lost the
ability to expand markets. What can be done?
The need
to modernize
Brazilian industry
Cristina Alves and Claudio Conceição
IS BRAZIL STILL COMPETITIVE? The share of
manufacturing in the economy is now the
lowest in history, just 10.9% compared to
35.9% in 1985. To try to find out why, and what
can be done, Claudio Considera, research
associate, and Juliana Carvalho, analyst, at
the Brazilian Institute of Economics (IBRE)
conducted a survey covering what has been
happening in a number of sectors since 2000.
Their results?
“The numbers show that Brazilian industry
lost competitiveness as imports increased
and exports declined for many manufactured
products. … The country has lost the ability
to expand markets,” Considera says.
Goods manufactured for domestic use fell
from 91.9% of total domestic production in
9. November 2015 Ÿ The Brazilian Economy 9November 2015 Ÿ The Brazilian Economy
COVER STORY INDUSTRY
2000 to 82.7% in 2014. Meanwhile, imported
manufactured goods went up from 13.4%
of domestic demand to 17.3%.
“The government can give incentives,”
Considera says, “but reindustrialization is
unlikely. We have no innovation or cheap labor
with which to recover markets from competitors.
All that can be done is to avoid an even greater
reduction [in competitiveness]. For example, we are major
exporters of iron ore, and we should have a strong steel
industry. However, several steel plants are in difficulties or
have closed.”
According to a study by the Brazil Steel Institute (IABR), steel is
going through its worst crisis ever. With domestic consumption
down to about 24 million tons a year and declining—and
enough capacity to produce 48.9 million tons—crude steel
production has only been relatively stable thanks to exports.
The IABR study shows that, in August, 20 units in 29 steel
mills were not producing, including two blast furnaces, four
steelworks, and four rolling mills. With the domestic market
shrinking and more competition from China, which now has
about 460 million tons of capacity, there seems little hope for
a surge in the Brazilian steel industry, at least in the short term.
In the metals sector, the IBRE survey found a steeply
increasing foreign presence in the domestic market. Imports of
metal products have quintupled, from 3.1% of domestic supply
in 2000 to 15.6% in 2014. Meanwhile, exports have stagnated.
The increased foreign competition in both domestic
and international markets has been partly caused
by an excess supply of manufactured goods since
2008. “Slowdown in Europe and the United States,
oversupply, fierce competition from China, and
increased production costs in Brazil have buried
the country’s manufacturing industry,” says
Flávio Castelo Branco, executive manager of
10. 10
COVER STORY INDUSTRY
November 2015 Ÿ The Brazilian Economy
economic policy of the National Confederation
of Industry (CNI).
Despite the discouraging environment,
some companies have shown that a well-
defined strategy of investments in innovation
and management of brand attributes can still
boost sales.
The role of innovation
Since it was founded 54 years ago Weg
S.A. has become one of the biggest electric
motor manufacturers in the world, with
plants in China, Mexico, South Africa, India,
Germany, Portugal, Austria, the U.S., Argentina,
Colombia, and Spain as well as Brazil. In 2014
the company earned R$7.8 billion and in the
first nine months of 2015 its revenues grew 24%
to R$2.5 billion compared with the same period
a year earlier, despite the economic crisis.
“The internationalization of Weg since the
1970s was not the result of a lucky business
opportunity; it was a strategic move,” says
André Luis Rodrigues, administrative and
financial superintendent of Weg. Today, with
the domestic market contracting, most of the
company’s investments will be abroad: for
instance, by 2020 it plans to invest US$210
million in Mexico and US$135 million in China.
By then Weg expects that 60% of its revenues
will come from exports.
“Today, we see that China is making
the transition from an economy focused
on exports to one more directed to the
domestic market,” Rodrigues explains. In
early November, Weg will open a new plant
in China.
“Our company [Dudalina]
competes with major
manufacturers, the big
Asian networks. Constant
innovation, commitment
to high quality, and
elimination of waste are
what keep us competitive.”
Ilton Rogério Tarnovski
1961
27.0
26.3
1962
1947
19.3
16.1
1939
18.9
1951
1954
20.1
21.3
1956
1964
26.2
24.4
1967
27.0
1969
1974
31.7
30.5
1979
The manufacturing industry's share in the
Brazilian economy has been falling since 1985
Industry value-added as % of GDP at current prices
35.9
29.11990
18.61995
1992
25.4
2003
16.9
13.9
2011
1985
10.9
2014
Source: IBRE.
11. 11
COVER STORY INDUSTRY
November 2015 Ÿ The Brazilian Economy
Innovation explains much of the presence
of Weg in foreign markets. Today, 50% of
the company’s revenues are derived from
products introduced in the last five years.
Weg regularly invests 3% of its revenues in
innovation and in training skilled workers, 200
of whom qualify as professionals every year.
Antonio Corrêa de Lacerda, professor
and coordinator of the Graduate Program
in Political Economy at Pontifical Catholic
University of São Paulo, argues that “Brazil
has important companies like Embraer, Weg,
and Marcopolo. The country has conditions
to multiply these examples. However, we
face false dilemmas, such as what is our
comparative advantage: agribusiness,
services, or industry? Brazil is one of the few
countries, like the US and China, that can be
strong on all three fronts.”
Despite success stories like Weg, in general
the IBRE survey results painted a gloomy
picture. For instance, in the machinery sector,
Brazilian companies lost domestic market
share to foreign competitors. Imports of
machinery more than doubled, from 16.6% in
2000 to 37.4% in 2014, and in 2011machinery
exports as a share of total domestic production
fell from 7% in 2000 to 4.6%.
For clothing and textiles, once an important
sector, the rapid loss of competitiveness
is almost frightening. In 2000 imports
supplied 2.5% of domestic clothing and
textile consumption. By 2014 imports reached
17.5%.
Exceptions to the rule
One success story in the clothing sector is
Dudalina, a shirt manufacturer founded in
1957. Today, the brand is present in nine
cities abroad, from Milan to Stockholm. The
company plans to open eight more stores in
2016 as franchises, mostly in South America
but also possibly in South Africa, according
to Ilton Rogério Tarnovski, company vice
president. Sold last year to Restoque SA,
Dudalina had the highest net income on
equity in 2014, 59%, as ranked by Valor 1000,
though the results are likely to be more
modest this year.
“The crisis is inevitable and we are not
immune. The difference is that in our case, the
wholebusinessstrategyandrevenuesarebased
on brand assets. This gives us resilience to face
the crisis,” Tarnovski explained. As the dollar
appreciated,importsoffabricfromabroadwere
Weg plant: To continue to growth, the company
invests 3% of its revenues in innovation and in training
skilled workers.
Photo: Weg
12. 12 November 2015 Ÿ The Brazilian Economy
COVER STORY INDUSTRY
while exports plummeted from 20.5% of
domestic production in 2000 to only 5.8%. But
even though the sector has been losing ground
every year, the Frescatto company, founded
by Italian Carmelo De Luca 70 years ago, is
making its way back to international markets.
After nearly eight years without exporting,
the company hopes to begin shipping its
products to Spain, according to Thiago De
Luca, commercial director and a member of the
third generation of the the controlling family.
Frescatto’s sales this year should reach
R$550 million, R$40 million more than in
2014. Today, 65% of the fish that is sold by
the company is imported from China, Chile,
Argentina, Uruguay, Canada and Vietnam
because the cost of processing fish in Brazil is
very high. Thiago De Luca cites an example:
imported from China, a kilo of panga fish,
which is similar to tilapia, can be sold in
supermarkets for R$9 per kilo but local tilapia
costs R$25.
“It’s all very expensive. The cost of labor,
electricity, fuel, and financing has increased.
To become more competitive, there is need
for greater surveillance to combat fishing in
the no-fishing season, improve fishermen’s
working conditions, and invest in new
technologies. We are lagging behind in this
respect,” De Luca says.
Despite the current problems, Frescatto
believes that domestic consumption should
risesoon;Braziliansconsumeonly12kilograms
of fish a year, barely half the world average.
This year Frescatto plans to open a shop in
reduced from 70% to 60%. But the company
continues to buy machinery from suppliers
in China, India, Turkey and some European
countries because they have higher quality at
a cheaper price. “Our company competes with
major manufacturers, the big Asian networks.
Constant innovation, commitment to high
quality, and elimination of waste are
what keep us competitive,” he
said.
Despite a coastline
of more than 8,000
k i l o m e t e r s a n d
plenty of rivers, the
outlook for the fishing
industry is bleak. In
2011 fish product
imports reached 38.9%
of domestic consumption,
“To become more
competitive, there is need
for greater surveillance to
combat fishing in the no-
fishing season, improve
fishermen’s working
conditions, and invest in new
technologies. We are lagging
behind in this respect.”
Thiago De Luca
13. 13
COVER STORY INDUSTRY
November 2015 Ÿ The Brazilian Economy
Leblon in Rio de Janeiro to sell directly to
consumers. In 2016, it will start operating a
farm in Pernambuco state that will produce
100 tons of gray shrimp a month.
Another case of a company dodging the
effects of its industry’s loss of competitiveness
is Casa Valduga, a wine-maker in Bento
Gonçalves, Rio Grande do Sul state. “We are
rolling up our sleeves and working harder,”
says Juciane Casagrande Doro, commercial
director; she predicts 20% growth in gross
revenue this year. She prefers not to risk
projections for 2016, however, because of
uncertainty about the effects of the higher
IPI tax on beverages that goes into effect on
December 1st this year.
Casa Valduga has diversified production
and focused on building the domestic
market—annually Brazilians consume 2 liters
per capita of wine, far below Italy’s 45 liters
and Argentina’s 30. The company already
exports to 23 countries; England accounts
for 35% of company sales. Casa Valduga will
also enter the craft beer market. To survive,
the industry cannot stop, Doro says, noting
that Casa Valduga is betting on wine tourism,
using hotels, restaurants, and inns for brand
exposure, and has taken its first steps in the
food business, producing juices and jellies
under the Casa Madeira brand.
Not even coffee, the most emblematic
Brazil’s product, has surmounted industry
problems. Processed coffee exports, which
accounted for 25.3% of total production
in 2004, fell to 10% in 2011. Meanwhile,
processed coffee imports grew from 0.1% of
total domestic consumption in 2000 to 0.9%
in 2011.
Apart from the successful trajectory of
the Ambev group, overall the Brazilian
beverage sector saw its exports plunge from
8.2% of production in 2000 to 1.7% in 2011.
Meanwhile, imports steadily rose from 8% of
total domestic consumption to 8.5% in 2011.
“Slowdown in Europe and the
United States, oversupply,
fierce competition from
China, and increased
production costs in Brazil
have buried the country’s
manufacturing industry.”
Flávio Castelo Branco
Dudalina store: The company’s goal is to expand
the number of franchises abroad in 2016 and face down
Asian competition.
14. 14
COVER STORY INDUSTRY
November 2015 Ÿ The Brazilian Economy
Loss of competitiveness
One of the sectors that lost foreign market
share is office machinery and computer
equipment. Imports, rising since 2005,
reached 34.8% in 2011, the highest of all the
goods IBRE studied. Foreign markets for these
products manufactured in Brazil have virtually
disappeared, with exports declining from
10.3% of domestic production in 2000 to 1.1%
in 2011. “We have had a protectionist policy
that led to a technological gap,” says the CNI’s
Branco. “We did not do trade agreements,
we are out of the international game, out of
global supply chains. Now it is much more
difficult to get back in the game.”
Despite all the recent incentives for the
automotive industry, exports of vehicles and
parts fell from 13.9% of total production to
7.6% in 2011. The loss of competition to Asian
carmakers was decisive.
Brazilian appliances have been virtually
wiped off the global map: Exports fell from
10.7% of total production in 2004 to just 1.6%
in 2011.
In petroleum refining, exports fell from
5.1% of domestic production in 2008 to
3.8% in 2011. Imports, including ethanol,
jumped from 3.4% in 2000 to an estimated
14.2% in 2014. Meanwhile, Brazil has become
heavily dependent on imported oil products.
Between 2007 and 2013, annual demand for
oil products increased by 4.6% while domestic
production grew only 2.3%.
Chemicals also lost ground: Imports rose
from 11.4% of domestic demand in 2000
to 36.2% in 2014, while chemicals exports
leveled off at 7% from 2000 to 2011.
Pharmaceuticalsalsosawforeigncompetition
break into the domestic market: Last year,
imports nearly tripled, from 12.3% of domestic
For clothing and textiles,
once an important sector, the
rapid loss of competitiveness
is almost frightening. In
2000 imports supplied 2.5%
of domestic clothing and
textile consumption. By 2014
imports reached 17.5%.
Frescatto’s factory in Duque de Caxias: The
company is expanding its distribution network and
betting that domestic fish consumption will continue to
grow.
15. 15
COVER STORY INDUSTRY
November 2015 Ÿ The Brazilian Economy
consumption in 2000 to 34.5% in 2014. Exports
rose, but only slightly, from 1.8% of domestic
production in 2000 to 2.5% in 2011.
The CNI study results agree with IBRE’s.
CNI found that net manufacturing exports
were a negative 0.9% in 2014—that is, Brazil
imported more inputs but failed to turn them
into final goods for exports, closing the year
in the red. Brazil has been losing ground
since 2005, when net manufacturing exports
reached 9.8%. The situation is most severe in
IT and electronic materials (–40.7%), printing
and reproduction (–24.9%), petroleum
products (–23.9%), chemicals (–19.1%), and
pharmaceuticals (–10.8%).
“Devaluation of the exchange rate should
bring positive effects for the industry this
year,” in Branco’s opinion. “But only in 2016 will
exports pick up strength. The exchange rate
only solves part [of the competitiveness gap]
and only for a time. To export it takes increased
productivity and quality products and design.”
Market gains
Among products where Brazil has picked up
market share in recent years is meat, mainly
because demand has grown, Considera says.
Exports of meat products such as beef rose
from 6.5% of meat production in 2000 to
11.8% in 2011. Brazilian slaughterhouses
—many with the support of the Brazilian
Development Bank (BNDES)—have made
their way to international markets. Meat
imports are very small, about 1% of domestic
consumption in 2011.
The pulp market, which was restructured
in recent years, continues to be a major
exporter, with exports increasing from 45%
“The government can
give incentives, but
reindustrialization is unlikely.
We have no innovation or
cheap labor with which
to recover markets from
competitors. All that can
be done is to avoid an
even greater reduction [in
competitiveness].”
Claudio Considera
Traditional maker of sparkling wine and red wine,
Casa Valduga is now entering the market of craft
beers under its own brand.
16. 16 November 2015 Ÿ The Brazilian Economy
of production in 2000 to 60.6% in 2014.
Meanwhile, imports have fallen significantly,
from 9.9% of domestic consumption in 2001
to 5.4% in 2014.
Transportation equipment, such as
Embraer’s aircraft, is another important sector,
though exports have been halved, from 38.1%
of domestic production in 2000 to just 16.6%
in 2011. Imports also increased from 28.9%
of domestic demand in 2000 to an estimated
31.4% in 2014.
COVER STORY INDUSTRY
“Brazil has important
companies like Embraer,
Weg, and Marcopolo. The
country has conditions to
multiply these examples.
However, we face false
dilemmas, such as what is
our comparative advantage:
agribusiness, services, or
industry? Brazil is one of the
few countries, like the US and
China, that can be strong
on all three fronts.”
Antonio Corrêa de Lacerda
“The big challenge is to build the industry
of the twenty-first century in Brazil. We
are facing a great opportunity, but [much]
depends on political will. The game is not
lost, but I do not see this goal being pursued.
There is no strategy,” says Professor Lacerda.
He says that many Brazilian industries have
eliminated production lines in Brazil and
became representatives of Chinese and
other Asian companies. “We need to focus
on reducing red tape, improving the tax
structure, and innovating. The artificially
overvalued exchange rate ended this year.
That has opened a possibility for industry to
re-establish links in the chain supply and build
an innovative environment, which should rely
on a close partnership between companies
and research universities,” he says.
17. 17
COVER STORY INDUSTRY
November 2015 Ÿ The Brazilian Economy
Cristina Alves
In recent years China HAS snapped up
some of Brazil’s major markets. A study by Lia
Valls Pereira, IBRE researcher, has found that in
particular the Chinese have advanced in South
America. Between 2009 and 2010, Brazil lost
12.7% of its exports to the region, of which
China gained 27.2%. Between 2010 and 2011,
Brazil gave way to another 12.3% of exports
to South America, of which China got 24.8%.
In the European Union Brazil was less
threatened by China. Between 2013 and 2014,
Brazil lost 13.6% of exports to the EU, of which
just 2.4% went to Chinese products.
Valls Pereira explains that estimates of how
much Chinese products have displaced Brazil’s
in export markets are based on products and
exported by both Brazil and China.
“China … has penetrated these markets, and
quickly displaced other exporting countries.
China became the largest exporter in less than
10 years. What is striking is that China won
markets, particularly in South America, where
Brazil has geographical proximity and relatively
lower transport costs,” she points out.
In the U.S., China effectively displaced
competitors early in 2000; Brazil lost ground
to China in the footwear market there. In
Argentina, China displaced competitors in
major household appliances and auto parts.
Valls Pereira warns: “For a while, China
won markets with low-tech products. Now, it
is moving significantly to medium and high
technology. China is the largest car exporter
in the world. After the large exchange rate
devaluation in 1999–2000, Brazil managed
quickly to recover markets, including the
American markets. Now, if the exchange rate
remains devalued, Brazil may recover markets
again but not as much because Brazil’s
Brazil:
Out of the global
market
Between 2010 and 2011, Brazil
gave way to another 12.3% of
exports to South America,
of which China got 24.8%.
18. 18
COVER STORY INDUSTRY
November 2015 Ÿ The Brazilian Economy
infrastructure is run down and its services are
expensive. We have to find niches and use
better geographic ties.”
World Trade Organization data show how
Brazil was pushed out of global markets in
recent years as other countries have won
important shares of world trade. China’s share
of world exports of manufactured goods grew
from 0.8% to 17.5% in 2013. Today, it is the
world’s leading exporter of manufactured
goods after the EU.
The US accounted for 9.5% of manufactured
goods exports and the EU for 15% in 2013.
Brazil does not even appear among the 15
largest exporters of manufactures, which
include India, Mexico, Thailand, Malaysia, and
Turkey.
On the other hand, Brazil’s share of world
imports of manufactured goods went up
from 0.9% in 1980 to 1.4% in 2013, placing
it among the top 15 importers. Thus Brazil
is sending more foreign currency abroad to
acquire higher value-added products. The
US remains the largest importer, but its share
has declined. In 2013, it absorbed 13.4% of
total global imports of manufactured goods,
down from 19.8% in 2000. In 2013 the EU
accounted for 10.1% of total global imports of
manufactures, followed by China with 9.2%.
“We are not China, nor will we ever be,” Valls
Pereira says. “But we do need at minimum
an export strategy. That does not mean
government intervention, but strategy does
require a regulatory framework and political
decisions. Industry worldwide is changing
the way it produces. Industry has not lost
importance, but it has been transformed. It
must be more innovative.“
World Trade Organization
data show how Brazil
was pushed out of global
markets in recent years as
other countries have won
important shares
of world trade.
19. ibre@fgv.br | +55 (21) 3799-6799 | www.fgv.br/ibre
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dissemination of important
economic and social performance
indicators:
FGV’s Brazilian Institute of Economics carries
out economic research and analysis, stimulating
the growth of public and private businesses
across the country. The Institute’s statistics
forecast principal short-term economic trends,
serving as an excellent tool for planning and
strategic decision-making.
Highly Skilled
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Present in 100% of
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Sound Understanding of
Market Dynamics and Practices
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20. November 2015 Ÿ The Brazilian Economy20 November 2015 Ÿ The Brazilian Economy
CONCESSIONS
Chico Santos
On July 1, 1994, After 15 years of relentless
inflation, the Real Plan, carried out by the
Itamar Franco administration, finally stopped
the spiral of rising prices, bringing stability
and order to the Brazilian economy. With
macroeconomic stability, it was time to
rebuild the country, which was devastated
by the economic disorganization caused by
high inflation. Infrastructure was particularly
affected: telecommunications and electricity
distribution were technologically backward,
most roads and railways were run down, and
there were no public resources to address the
huge infrastructure bottlenecks that stifled
economic activity.
The National Privatization Program,
launched in 1991 by the Collor administration,
The Law of Concessions:
20 years later
had privatized many state-owned
enterprises, transferring steel and
petrochemical production to the private
sector. The program was completed with
the sale of Vale mining company in May
1997. Despite the success of the privatization
program, it was urgent to start a program of
infrastructure concessions to attract private
investment in light poles, telephones, and
roads and put trains on the tracks.
On February 13, 1995, the new president,
Fernando Henrique Cardoso, signed Law
No. 8987, the Law of Concessions. The
first concessions granted under the
new law were management and
maintenance of the President
Costa e Silva Bridge
21. 21
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
(Rio-Niterói) in June 1995, the President Dutra
highway (Rio-São Paulo) in March 1996 and
the Light Electricity Services in May 1996. From
March 1996 to July 1997, concession contracts
were granted for six regional networks of the
Federal Railway Network (RFFSA).
On October 5 and 6, 2015, a seminar on
“20 Years of the Concession Law,” was held at
the Center for Regulation and Infrastructure
(Ceri) and the Law School of Rio de Janeiro
of the Getulio Vargas Foundation (FGV). It
demonstrated that since the law was enacted,
Brazil has made unquestionable advances
in services infrastructure, such as a modern
telecommunications network, nearly 10,000
kilometers of highways still in good condition,
and expansion and modernization of major
airports. But bottlenecks persist in almost all
areas, especially in logistics and sanitation.
With the country’s fiscal crisis drying
up subsidized financing from the National
Development Bank (BNDES), it is necessary to
find new funding sources to ensure needed
investment in infrastructure. The fiscal crisis
is also forcing the federal government to
resort to concession contracts that maximize
bonus collection, which may conflict with
the demand for quality services at prices
compatible with Brazilian incomes.
Regulatory agencies, created by the Law
to monitor concession operators, have had
their power and independence curtailed by
government meddling. Joísa Dutra, director
of CERI, described government’s “regulatory
activism” as excessive, as in the disastrous
reform of the electricity sector in 2012. At
the seminar there were calls for greater
transparency in concession contracts and in
governance of concessionaires to ensure that
society has more control over the quality of
services provided.
Dutra pointed out that “despite the
undeniable benefits” generated from the
Concessions Law, Brazil fell from 57th to 75th
position among 140 countries analyzed in
this year’s World Economic Forum Global
Competitiveness Report, and infrastructure was
one of the main pillars analyzed: The report
ranks Brazil in 121st place in the quality of roads,
120th in port facilities, and 98th in railways.
Dutra also cited major Brazilian government
programs for infrastructure investments: the
Since the law was
enacted, Brazil has made
unquestionable advances
in services infrastructure,
such as a modern
telecommunications network,
nearly 10,000 kilometers
of highways still in good
condition, and expansion
and modernization of major
airports. But bottlenecks
persist.
22. 22
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
second stage of the Logistics Investment
Program (PIL-2) foresees R$198.4 billion in
infrastructure investments, R$86.4 billion for
railways, R$66.1 billion for roads, R$37.4 billion
for ports, and R$8.5 billion for airports. As these
investments ultimately depend on private
participation, she underscored the urgency
of reforming the regulatory framework if the
investments are to be successful.
Pillar to grow
In opening the seminar Finance Minister
Joaquim Levy said that building infrastructure
“is a central part of the growth strategy
and will continue to do so, but we need to
attract private financing,” Levy said, noting
that this was at the heart of the challenges
of all the G-20, not just Brazil.1 To attract
these resources, Levy considers it essential
for Brazil to better design projects and draft
contracts so as to reduce costs and delays in
execution and thus reduce the risk to lenders.
“Whenever there is ambiguity in projects and
contracts, fewer firms [bid],” he said.
1 The Group of Twenty (G-20) is an international forum for governments and
central bank governors from the 20 major economies —Argentina, Australia,
Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South
Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom,
the United States, and the European Union.
Sources: www.usgovernmentspending.com; www.whitehouse.gov; www.gov.uk; www.treasury.gov.my/; www.dgo.pt/;
www.abc.net.au; http://budget.gov.au; http://india.gov.in; http://www.minhacienda.gov.co; Siafi; Siga Brasil, Secretaria
do Tesouro; BID, Banco Mundial.
Elaboration: Inter.B.
Brazil government invests
the least in infrastructure as a share
of total public spending.
Government investment in infrastructure as share
of total federal budgeted spending (%)
Peru - 2014
Paraguay - 2013
India - 2014/2015
Portugal - 2014
Colombia - 2014
Malaysia - 2014
United Kingdom - 2014
Mexico - 2013
United States - 2014*
Brazil - 2014
11.00
11.00
8.32
7.23
4.44
3.2
2.86
2.65
2.64
1.47
of countries,” especially
Brazil, and that “in the
f is c a l e nv ir o nm e nt
in which Brazil and
m os t of th e wo r l d
li ve to day, p r i v ate
sector participation in
investments is critical.”
He stressed that private
operators from all over
the world are now
working successfully,
despite economic ups
and downs, in various
infrastructure sectors,
and the goal continues
to be to attract both
international operators
and investors.
“The BNDES played a
key role in 1990–2000,
23. 23
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
Later in the seminar, Flávio Amaral Garcia,
State Attorney of Rio de Janeiro, described
practical details related to Levy’s comments:
the Ministry of Finance has established a
working group of ministry staff and external
experts, such as Carlos Ari Sundfeld, professor
at the FGV Law School of São Paulo, to propose
improvements in regulation of infrastructure
concessions. The group’s four main concerns
are governance, planning, legal certainty,
and efficiency. One topic being discussed is
amendment of the Public Procurement Law,
although Garcia believes that not much can
be done while corruption schemes in state-oil
company Petrobras are being investigated. But
that does not prevent changes in regulations,
such as the Concessions Law, that in practice
imply change in the procurement law.
Also being discussed is a change in the Civil
Code proposed by Senator Antonio Anastasia
(PSDB-MG) to give public officials legal
protection for making decisions without fear
of making mistakes or suffering sanctions by
regulatory agencies. According to Garcia, fear
of punishment has caused paralysis in some
government sectors.
Both Levy and Garcia made it clear that
given the current crisis the goal of the
government economic team is to build the
foundations for a recovery based on stronger
institutions.
The Commercial Secretary to the Treasury
of the United Kingdom, Lord O’Neill of Getley,
said one of the few things he had learned in
his 30 years in finance was that “you never
let a serious crisis go to waste.” O’Neill
stressed the importance of creating the right
conditions for attracting investment, and that
among these it is “very important to have a
national plan for the long term.”
O’Neill believes that one reason the U.K.
has achieved great success with public-private
partnerships (PPPs) is “a relatively stable legal
system and tax regime.” In recent years the
U.K. has attracted more than 730 PPP projects,
with investments valued at £54 billion (over
US$80 billion), and about 40% of investments
in the British economy come from abroad.
Far short of what is required
The executive director of the Harvard
Electricity Policy Group (HEPG), Ashley
Brazil fell from 57th to
75th position among 140
countries analyzed in this
year’s World Economic Forum
Global Competitiveness
Report, and infrastructure
was one of the main pillars
analyzed: The report ranks
Brazil in 121st place in the
quality of roads, 120th in
port facilities, and 98th in
railways.
24. 24
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
taking the place of conventional taxis,
Vasconcelos said it is time to adapt regulation
to this new world.
Marçal Justen Filho of Justen, Pereira,
Oliveira Talamini, lawyers, said that given the
speed at which reality has been changing, the
watchword for regulation is “flexibility,” rather
than putting the Concession Law in a straight-
jacket. “What do we do if reality changes?”
he asked. “Be flexible,” he answered. Among
strengths in the Concessions Law that
he identified was that it eliminates legal
uncertainty, eases the application of the
procurement law, disciplines the bidding
process, and establishes “fundamental
principles” of the relations of government,
operators, and users. Among shortcomings,
he said, the law lacks flexibility to adapt to
new situations, has a static concept of the
contractual economic-financial balance, and
has brought about multiplication of regulatory
agencies with overlapping competencies.
Justen pointed out that reality has
prompted changes since the early years of the
Concessions Law, such as sectoral regulation
like the General Telecommunications Law
(9472/1997) and the PPP Law (11,079 / 2004).
In sum, he said, “It is impossible to fit all
public concessions in the framework of the
Concessions Law.”
The benefits in terms of upgraded
infrastructure under current regulation
have been significant, but insufficient. Regis
Bonelli, researcher, Brazilian Institute of
Economics, and moderator of the current
Brown, a respected international expert on
infrastructureregulation,identifiedtwocurrent
issues in Brazil: incentives for concessions and
conflicting government interests between
improving infrastructure services and
maximizing financial compensation for the
concession operator. He considers a major
obstacle to the development of natural gas
distribution infrastructure in Brazil to be the
lack of free access to the pipeline network, of
which Petrobras has a virtual monopoly.
Portuguese consultant Jorge Vasconcelos,
founder of the Florence School of Regulation,
recalled the liberalizing context of the late
1980s and early 1990s in which infrastructure
concession frameworks throughout the
Western world, including Brazil, solidified.
However, he said, “The rights and participation
of users today, with the resources of the
Internet, have nothing to do with what existed
in the 1990s.” In a world where people are
discovering new opportunities that trample
markets, as with the Uber transport company
In recent years the U.K. has
attracted more than 730 PPP
projects, with investments
valued at £54 billion
(over US$80 billion), and
about 40% of investments
in the British economy come
from abroad.
25. 25
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
Brazilian infrastructure panel, said efficient
infrastructure generally increases the
productivity of the whole economy, but in
Brazil infrastructure investments have not
been sufficient to boost productivity.
Bonelli pointed out that the annual increase
in Brazil’s total factor productivity fell from
2.3% in the second term of Lula da Silva (2007–
10)to–0.2%inthefirst Rousseffadministration
(2011–14). He suggested that the decline in
productivity is associated with, among other
factors, a larger share of low-productivity
services in gross domestic product and
“wrong economic policy choices,” such as
poorly planned and executed infrastructure
projects. Among these he cited construction
of a wind farm in Bahia state without the
necessary power transmission line and
Petrobras refinery projects that have been
dragged out or discontinued.
Claudio Frischtak, president of Inter B
consultancy, underscored the major effects of
infrastructureshortcomingsonproductivityand
growth. The problems of the Brazilian economy
are so complex that Frischtak does not rule out
the possibility that the 2010s will go down in
history as a second “lost decade,” rivaling the
hyperinflation of the 1980s. He showed, for
example, that between 1996 and 2015 labor
productivity in Brazil grew only 0.69% a year
compared to 7.99% in China and 4.56% in
India. Frischtak attributes the low productivity
growth to such factors as poor education,
poor management, regulation uncertainty, the
complex tax structure, high taxes, an adverse
business environment, and limited investment.
Source: Conference Board Total Economy Database, 2015.
Growth in labor productivity is key for higher income and economic growth.
Brazil has one of the lowest productivity growth rates among emerging countries.
Labor productivity measured by GDP in US dollar per employed person (average annual % growth)
1996-2015
Brazil IndiaChina USGermany Ireland United
Kingdom
PolandSlovakiaSouth
Korea
MalaysiaIndonesia Thailand
0.67 0.69
7.99
3.01
3.44
1.59
0.86
4.56
2.31
1.98
1.47
3.42
1.15
2.07
Netherlands
26. 26
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
With regard to infrastructure investment,
Frischtak said, Brazil annually invested
2.12% of GDP in 2001–10 and 2.29% in
2011–14, when it needed to invest 5–6% a
year for at least two decades to overcome
its infrastructural deficit. Brazil’s annual
investment in infrastructure is less than the
3% the World Bank considers the minimum
necessary to make up for the depreciation of
fixed capital. Brazil invests little and poorly
in infrastructure, says Frischtak. And why?
He highlights flaws in planning, the low
quality of public projects, low government
low execution capacity, limited fiscal space,
and little availability of long-term financing.
He also sees a lack of the predictability,
stability, and transparency necessary to attract
privatesectorinterestinconcessions.Hecallsfor
regulatory agencies that are depoliticized and
have decision-making and financial autonomy.
He also recommended a reform agenda that
supports increased public investment and
attracts more private investment.
Bruno Dantas, Minister of the Court of Audits
(TCU), stated that “Brazil does not know how
to do planning,” and the lack of planning leads
to insufficient financing for proper execution of
projects. He also said that the disorganization
prevailing in Brazil “torments entrepreneurs
and does not allow the execution of necessary
investments.” Among examples of messy
execution of infrastructure projects, Dantas
cited the recent TCU ruling that criticized the
government’s decision to change the criteria
for granting eight ports under the Logistics
Investment Program (PIL). The criteria changed
from “greater cargo handling capacity” to
“higher value award.” With this change, the TCU
believes the government lost an opportunity
to seek greater efficiency in port operations.
EngineeringconsultantRuiMarques,professor
at the University of Lisbon, believes the Brazilian
infrastructure deficit can be resolved by more
PPPs, a public service concession arrangement
that is not well developed in Brazil. PPPs could
help encourage investments, particularly in
sanitation and transport; currently annual
investmentsininfrastructureaverage R$1billion
a year when the country needs to invest R$240
billion a year. Marques sees as one problem the
lack of capacity in the public sector in general
to participate in PPPs; Brazil needs to invest in
training public sector technical staff.
“It is impossible to fit all public
concessions in the framework
of the Concessions Law.”
Marçal Justen Filho
27. 27
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
“Brazil needs development that is neither
the National Confederation of Industry, nor the
National Confederation of Agriculture and Livestock
of Brazil, nor Greenpeace,” said Marilene Ramos,
president of the Brazilian Institute of Environment
and Renewable Natural Resources (IBAMA), during
the seminar panel on “Energy and Environment.”
She was referring to the eternal conflict between
electricity power generation and transmission and
environmental agencies.
Ramos, who took office in May, reported that
three federal working groups are looking into how
tofindasolutiontothecurrentconflict.Shesaidthat
sometimes the electricity sector calls for something
and IBAMA seems to agree, but IBAMA imposes so
many requirements that in fact it seems to deny it.
One suggestion Ramos made was to streamline
the process of environmental licensing so that that
each priority project submitted to IBAMA comes
with a stamp of “strategic” placed by a multisector
agency; in the case of electricity, she said, that could
be the National Council of Energy Policy. She also
said the three environmental licenses—preliminary,
installation, and operation—are not the only ones
causing delay. Often specific sublicenses, such as
vegetation removal, slow the effects of the major
environmental licenses.
Mario Menel, president of the Forum of
Associations of the Electricity Sector, pointed out a
little-known area of dispute between the electricity
sector and the environmental agencies that goes
beyondtechnicalissues:Sincegrantingapreliminary
licenseisconditionalontheauctionsoftransmission
The eternal conflict
between energy and
environment
lines, mayors tend to create environmental reserves
inthestretchesthroughwhichtransmissionlineswill
run in order to gain bargaining power in the later
licensing stages.
Menel added that the initial effect of the Law
of Concessions “was spectacular,” unlocking 22
electricity projects, but over time the law became
cluttered with alterations, the most significant
being that embodied in Law No. 12,783, which
sets conditions for renewal of power generation
contracts. That, Menel said, “broke the electric
sector.”
Lawyer Elena Landau, former director of
privatization of the National Development Bank,
agreed that the Concessions Law started well
in 1995, but the interventionism historically
characteristic of Brazilian governments as always
ended up messing it up. She believes that the large
exchange devaluation in 1999 made a clear case for
concessionaires to request economic and financial
review of their contracts as the regulation calls for,
but “the central bank opposed it,” she said.
In addition, Laudau said, the National Electric
Energy Agency has hypertrophied and is dictating
electric sector policy. “A concession contract is
worth nothing before the Aneel,” she said.
28. CONCESSIONS
28 November 2015 Ÿ The Brazilian Economy
Seminar participants were surprised when the
executive secretary of the Ministry of Transport,
Natália Marcassa, said the 7,000 kilometers of
new railways planned for the second phase of the
Logistics Investment Program (PIL 2), which total
R$86.4 billion in investment, will only make up
for the first program’s lack of success: None of the
railway projects of the first Logistics Investment
Program (PIL 1) were completed.
The announcement confirmed what everybody
suspected.ThePIL1modelestablishedstate-owned
Valec as guarantor of cargo for railways to be built
by the private sector: Valec would purchase all
cargo capacity from railway operators and sell it to
users. This seemed the ideal response to the railway
operators’ risk of losses, but in practice it drove
away investors who feared that the government
would not fulfill its contractual role if operator cash
flow should dwindle. In fact, Marcassa said, PIL 2
has buried the Valec guarantee of cargo for railway
operators precisely because the government fears
it might not be able to fulfill its commitment.
Marcassa reported that the government
celebrated the 20 years of the Concession Law by
rebidding operation of the Rio Niterói Bridge this
year, after the first concession agreement was fully
completed. The concession auctioned was again
for 30 years, but with a reduction in the toll. The
reduction was extensively criticized, during the
seminar and elsewhere, because the bridge has
excess demand and is at risk of saturation with the
cheaper toll.
The government does not have a business model
for the new phase of the program. It is considering
alternatives to limit risks to investors that would
replace Treasury guarantees and cheap and
unlimited BNDES financing.
“We need private funding from any source. In
Europe there is huge liquidity in search of more
attractive yields,” said Paulo Correa, Secretary
of Economic Policy of the Ministry of Finance,
explaining changes that bring greater legal security
for investors.
The panel on international experience revealed
that there is no easy life in logistics, even in Europe
where infrastructure is already largely built.
Consultant Mathias Finger of the Florence School of
Regulation made it clear that railways are not self-
financing. “In the most efficient systems, perhaps
the cost of recovery is no more than 50%. The
The search for a new
transport agenda
rest is public money,”
he said, pointing out
that cargo, which is
the Brazilian option,
is profitable, which
is no longer true for
passengers. As for
the business model,
Fingersaidhewasnot
convinced that it is
29. 29
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
efficient to separate infrastructure and operations,
because the interaction between the two parties
ends up generating high costs.
Another European specialist, Duarte Silva,
director of the state-owned Infrastructure of
Portugal, reported that in his country the option
for cargo is total separation of infrastructure and
operation (100% private as of January 2016), but
withintegrationbetweenrailandroad,withtheaim
of defining an optimal model that takes advantage
of synergies to increase scale and reduce costs.
In Brazil, Armando Castelar, IBRE coordinator
of Applied Economics, identified two factors: The
successful privatization of railways in the 1990s,
which can be measured by increased investment—
R$574 million in 1996/1997 and R$5.94 billion in
2014—and the reduced accident rate, which fell
from 75.5 per million kilometers traveled in 1997 to
11.6 in 2014. But there is government dissatisfaction
with some aspects of the privatization, especially
the restricted access of new users to cargo services
and the lack of incentives for construction of new
lines. Castelar pointed out among serious problems
to be addressed is the low speed of trains and the
low viability of new projects, such as the East-West
Integration railway and Transnordestina railway.
Mauricio Portugal of the Portugal Ribeiro law
firm said that the railway business model that was
abandoned, with its inevitable fiscal costs, was
appropriate for a much richer country than Brazil
andthereforedidnotprosper.HethoughtthatBrazil
faces serious risks in achieving its infrastructure
investment objectives and said it was not true that
more recent concessions, such as airports, were
successful. Without resources to pay for subsidies,
and without a good payment history, except in
securitized debt, in Portugal’s view, even the idea
of hiring guarantees with multilateral organizations,
such as the Inter-American Development Bank and
the World Bank, though good in theory, would
suffer from the slowness of the institutions.
Some measure of success
Despite setbacks, doubts, recent mistakes, and
necessarycoursecorrections,numberspresentedby
Luiz Ugeda, Director of Regulation and Institutional
Relations of the Brazilian Association of Highway
Concessionaires, support the correctness of the
decision to grant such concessions. He said that
since 1995 concessionaires in the road sector have
invested R$44 billion and plan investments of R$55
billion over the next five years, although only 30%
of users of road concessions pay tolls. He proposed
establishment of a center of excellence in logistics,
modeled on the Center for Energy Research of
Eletrobras.
Marcelo Bruto, director of the National Land
Transportation Agency, pointed out that despite
the progress so far, it is time to look for new
business models for concessions to make it possible
to hand over to the private sector roads that may
not have enough traffic yet to justify the investment
required.
In the airport industry, according to Tomas
Serebrisky of the Inter-American Development
Bank, “the international assessment is that Brazil’s
[concessions] program has been successful,” in that
it has interested operators of the best airports in the
world, although there continue to be challenges.
One of them is how to manage in times of economic
crisis, since the income elasticity in the airline
industry is very high. He is also concerned that only
airports that give good returns were privatized,
eliminating cross-subsidies that supported loss-
making airports. Brazil has more than 120 airports
in operation. He believes that PPPs can work out
solutions for loss-making airports. “Peru has done
it successfully,” he said.
30. 30
CONCESSIONS
November 2015 Ÿ The Brazilian Economy
FOR The panel on telecommunications
the sector was seen to be “at a crossroads,” as
Caio Mario Pereira Neto, professor, FGV Law
School of São Paulo, said. Given technological
development, it does not make sense to insist
on universal fixed telephony, which was the
mainstay when Telebras was privatized in 1998.
“Today, broadband is the main sector expansion
axis,” said Pereira Neto, noting that Brazil today
has 70 million fixed telephony lines but only
40 million are actually in service.
Pereira Neto argued that to refocus Brazilian
telecoms on broadband it is necessary to create a
new policy of expansion with multiple instruments,
adding “This is more like it was in 1998, when there
was a large pent-up demand.”
For broadband to be universal, for example, he
recognized the need to find mechanisms to reach
the poorest areas of Brazil. He suggested use of
the Universal Service Fund for Telecommunications
Services (Fust) to cover the additional costs for
telecom companies to serve these areas. From 2000
to 2013, he said, Fust raised about R$16 billion—
resources that were used almost entirely to ensure
the government’s primary fiscal surplus.
Telecoms: The
new concessions
frontier
The telecommunications
sector is the “champion” in
terms of numbers of user
complaints to consumer
protection agencies.
Igor Vilas Boas de Freitas, board member of the
National Telecommunications Agency (Anatel),
said that of Fust’s R$16 billion, only R$200,000 was
used. He agreed that the sector is at a turning point
and said Anatel is preparing for this new phase;
he noted that “Until 2013, Anatel consisted of mini
agencies separated by areas. Today it is organized
in a centralized way.”
Freitas believes that new challenges also
require changes in the accounts of telecom
companies, which are today separated by areas and
independent services. “Trying to solve the problem
of broadband with this accounting separation is
not possible,” he said. Some broadband service in
poor areas, for example, is already being offered by
small operators. “With a little encouragement, small
operations can solve the problem in small markets.”
There were also concerns about telecoms quality
and prices. Joísa Dutra, director of Ceri, noted that
the telecommunications sector is the “champion” in
terms of numbers of user complaints to consumer
protection agencies and that this situation is
incompatible with progress.
31. 31
LATIN AMERICA
November 2015 Ÿ The Brazilian Economy
LATINAMERICA
Latin America is
put to the test
Solange Monteiro
With the prices of commodities exported
by Latin American economies not expected
to recover any time soon, the growth outlook
for the region is pessimistic. According to
International Monetary Fund (IMF) estimates,
in 2015 Latin American GDP is expected to
shrink by 0.3%. Excluding 2009, when the
effects of the global financial crisis were
deeply felt, that will be the first decline in
growth since 1983. “The situation is more
serious now, because we are no longer
talking about something global but a regional
problem,” said Marcello Estevão, deputy
division chief of regional studies in the
IMF Western Hemisphere Department. The
commodity price shock has also reduced
potential growth in the region, which the
IMF now projects at 2.9%, the lowest since
the early 2000s.
On October 23 in Rio, IMF representatives
and researchers of the Brazilian Institute of
Minimal growth and inflationary pressures test the
credibility of the policies and institutions of Latin
American countries.
Economics (IBRE) met to discuss the IMF Latin
American economic outlook presented at the
World Bank and IMF Annual Meetings in Lima,
Peru.TheIMFeconomistspointedouttheneed
for structural adjustments in most countries
in the region, particularly Argentina, Brazil,
Ecuador, and Venezuela. These countries are
causing concern in financial markets. “Under
the more difficult conditions, the credibility
of policies and government institutions will
be tested,” Estevão said.
The decline in commodity prices has been
reflected to varying degrees in changes in the
terms of trade, incomes, and external current
account balances of exporting countries.
Copper exporters Peru and Chile have been
adjusting their economies since metals prices
began to fall in 2011. “In the case of Peru,
[this has gone] a little more slowly, as the
economy is to some extent dollarized and it
is consequently more difficult to adjust the
exchange rate,” Estevão said. At the other
extreme are the oil-exporting economies,
31November 2015 Ÿ The Brazilian Economy
32. 32
LATIN AMERICA
November 2015 Ÿ The Brazilian Economy
where the free fall of oil prices has been
more recent, since mid-2014. “In Venezuela,
the reduction in the price of exported
commodities was equivalent to 21% of GDP.
As a result, the country’s import revenues
declined dramatically, generating a large fiscal
deficit that was financed by printing money,”
he said. “Ecuador, in turn, lost almost 10%
of GDP,” he added, noting that, as Ecuador’s
economy is also dollarized, the price shock
generated a loss of competitiveness and a
sudden downturn in the whole economy.
For countries that export agricultural
products, such as Brazil and Argentina,
the impact of lower commodity prices has
been relatively small; domestic factors have
weighed on growth more. In Argentina, the
focus is on monetization of large fiscal deficits
and a decline in international reserves, which
call for traditional adjustment policies. For
Brazil, where the fiscal situation is worsening
and the political crisis is deep, the IMF sees no
possibility of a short-term economic recovery,
acknowledging that the crisis was deeper
2014 2015*
Latin America
1.3 -0.3
Brazil 0.1 -3.0
Chile 1.9 2.3
Colombia 4.6 2.5
Mexico 2.1 2.3
Peru 2.4 2.4
Uruguay 3.5 2.5
Argentina 0.5 0.4
Bolivia 5.5 4.1
Ecuador 3.8 -0.6
Paraguay 4.4 3.0
Venezuela -4.0 -10.0
Source: IMF Economic Outlook October 2015.
* Estimate.
Latin America slows down
GDP growth in %
and the Caribbean
For countries that export
agricultural products, such
as Brazil and Argentina, the
impact of lower commodity
prices has been relatively
small; domestic factors have
weighed on growth more.
than expected. “The concern now is to find
a solution to resolve the structural problems
of the economy,” Estevão said. The IMF
projection for 2015 is that Brazil’s output will
fall by 3%, second only to Venezuela’s drop of
10%. For 2016, the IMF estimates that Brazil’s
output will again decline, this time by 1%.
Low growth, high inflation
One challenge common to Brazil and other
Latin American countries is sluggish growth,
if any, compounded by inflationary pressures,
even as much of the world is trying to manage
disinflation and even deflation. This year,
in addition to Brazil, the IMF estimates that
Colombia, Chile, Peru, and Uruguay will record
33. 33
LATIN AMERICA
November 2015 Ÿ The Brazilian Economy
inflation that is more than 1 percentage point
above the center of their targets.
However, the IMF sees monetary policy in
the region as a whole as being on track and
urges continued efforts to fight inflation.
Brazil, however, will not see relief in 2016.
IBRE researchers pointed out several factors
that are likely to keep inflation above the
target ceiling of 6.5%. The first is that the
recession has delayed most of the effects of
foreign exchange devaluation on industrial
input prices for 2016. For controlled prices,
IBRE economists Salomão Quadros and
André Braz estimate that prices for the items
Source: IMF World Economic Outlook database.
Commodities prices are expected to remain depressed
(Index:2000 = 100)
80
130
180
230
280
330
380
430
Energy Metals Agricultural goods
2011 peak
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
While in recent years China
was able to buy commodities
from Brazil’s neighboring
countries and expand market
share for its products in
Latin America, Brazil failed
to create the same dynamic
with trading partners in the
region and also failed to gain
traction in rich economies.
34. 34
LATIN AMERICA
November 2015 Ÿ The Brazilian Economy
that weigh more heavily in the price index
will go up: electricity by 9.5%, bus fares by
9%, and gasoline by 8%. Prices for services
are expected to increase in line with the
expected 10% increase in minimum wage.
José Julio Senna, head of the IBRE Monetary
Studies Center, highlighted the difficulty of
keeping monetary policy efficacious without
a clear fiscal policy, noting that the large
imbalance in public finances and the low
confidence in corrective measures heighten
the perception of risk and boost exchange
rate devaluation, which in turn puts more
pressure on inflation.
Adding to the deterioration of the
confidence of both businesses and consumers
in fiscal and political institutions is the fall in
the value of financial assets and investments,
which could be accentuated if the rating of
Brazilian investments is downgraded further.
Against this backdrop of business uncertainty,
Estevão said, it would help to protect public
investment as a positive externality for
the private sector. He pointed out that
normalization of U.S. monetary policy will give
an incentive for capital to flow from emerging
countries to the U.S.
Another risk factor the IMF staff pointed
out is the quantity of corporate debt, which
can also compromise productive investment
plans in Brazil; they estimate that the debt-
to-net assets ratio of Brazil corporations
has reached 65%. IBRE researchers Silvia
Matos and Vinícius Botelho emphasized the
situation of net debtor companies in terms
of U.S. dollars. They expect that at least until
2016 the impact of currency devaluation
on the balance sheets of these companies
should be greater than the profitability of
exports.
Boost to export
So far the exchange rate devaluation has not
yet boosted Brazilian exports significantly. Lia
Valls Pereira, also an IBRE researcher, pointed
out that the devaluation has had a more
negative effect on imports. She said that
“the real effective exchange rate adjusted by
inflation depreciated 47% between September
2014 and 2015,” which could help make
Brazilian manufactured goods more attractive
internationally. However, foreign sales of
manufactured goods continued to decline
in the first nine months of 2015, except for
U.S. demand for aircraft and parts, which
contributed to increase shipments to the
U.S. by 3.7% in the first nine months of 2015
For Brazil, where the fiscal
situation is worsening and
the political crisis is deep,
the IMF sees no possibility
of a short-term economic
recovery, acknowledging
that the crisis was deeper
than expected.
35. 35
LATIN AMERICA
November 2015 Ÿ The Brazilian Economy
compared with same period a year earlier.
Fabiano Rodrigues Bastos, an IMF economist
who studies trade integration in Latin America
and the Caribbean, pointed out that increasing
the share of exports of higher-value-added
products is a challenge for the whole region.
He noted that within the region Brazil imports
less relative to its potential—population size
and proximity to relevant markets—and that it
is imperative for the country to boost sales to
advanced markets. While in recent years China
was able to buy commodities from Brazil’s
neighboring countries and expand market
share for its products in Latin America, he said,
Brazil failed to create the same dynamic with
trading partners in the region and also failed
to gain traction in rich economies.
To raise the added value of Brazilian exports,
Bastos argued for greater integration in value
chains, but said it is necessary to have realistic
expectations about the results of this strategy:
“It’s a first step, but does not guarantee
an increase in value added or productivity
growth.” To increase competitiveness Bastos
also advocated for the removal of domestic
barriers to reallocation of resources, and for
monitoring major trade agreements such as
One challenge common
to Brazil and other Latin
American countries is
sluggish growth, if any,
compounded by inflationary
pressures, even as much
of the world is trying to
manage disinflation
and even deflation.
the Trans-Pacific Agreement. “Agreements like
this can be good or bad, but one must watch
them so that the country is not left out of a
more integrated trade landscape,” he said.
In the short term, however, the main
determinant of Latin America’s exports
continues to be China because of the impact
of slower China growth on both demand
for and prices of commodities exported by
Latin American countries. The IMF estimates
that on average every 1 percentage point of
lower growth in China reduces growth in Latin
America by 0.5 percentage point.
36.
37.
38. 38 November 2015 Ÿ The Brazilian Economy
The need to eliminate uncertainty
in order to attract investment and
accelerate infrastructure proj-
ects has heated the debate about
Brazil’scumbersomeenvironmental
licensing process. How does IBAMA
intend to address the issue?
Our focus has been to rationalize
licensing. Today the process covers
a number of related licenses, such as
public utility decrees and permits for
removal of vegetation, which have
their own time-consuming proce-
Photo: ASCOM/IBAMA
Marilene Ramos
President of the Brazilian Environmental Agency (IBAMA)
Solange Monteiro
Environmental licensing has been at the forefront of debate about
how Brazil can unlock infrastructure concessions and execute projects
more efficiently. Marilene Ramos, former director of the Regulation
and Infrastructure Studies Center of Getulio Vargas Foundation and
now president of the Brazilian Institute of Environment and Renewable
Natural Resources (IBAMA), believes that the environmental agency will
perform better when to increase transparency and reduce discretion,
it eliminates duplicate procedures and spells out the remaining
procedures clearly in manuals. Ramos, who has also been secretary
for the environment in Rio de Janeiro state and president of the Rio de
Janeiro State Environmental Institute, notes, however, that delays in
infrastructure projects will be completely eliminated only when Brazil
defines which projects are most important: “We need higher-level
guidance to clearly define for the environmental area which projects
are of strategic importance for the country’s development.”
A call for
clarity
INTERVIEW
39. 39November 2015 Ÿ The Brazilian Economy
INTERVIEW
dures and do not bring any environmental
gain. … An IBAMA working group is reviewing
the regulations in order to propose changes.
… We are also seeking rationalization of
IBAMA’s internal technical procedures. In most
cases, 80% of what has to be done to process
licenses is repeated, especially when they are
of the same type, whether it is construction of
a dam, a railway, or a road. We do not need to
treat each licensing as if it starts from scratch.
We have a consultant working to identify best
international and national practices, such
as those of the Environmental Company of
the State of São Paulo, to produce manuals
to guide the work of both IBAMA staff and
entrepreneurs and consultants, so they know
what to expect from the licensing process.
Uniform guidelines will reduce discretion in
granting licenses. This will also cover mitiga-
tion measures to reduce the environmental
impact of infrastructure projects. … We expect
to have manuals for two types of projects in
the first half of 2016 that could be used by
state and municipal environmental agencies
to rationalize their own licensing procedures.
Although there have been efforts to simplify
the environmental licensing process since
2011, some businesses, particularly in the
electricity sector, have great expectations
about your management of IBAMA. Why the
optimism?
The Ministry of Environment has really made
a great effort to streamline processes. One
example is ministerial ordinance No. 060 of
2015 establishing the participation of agencies
involved in environmental licensing—FUNAI,
Iphan, and the Palmares Foundation—and
centering the licensing process in the IBAMA.
These agencies now have deadlines to give
their opinion; if they are not met, IBAMA can
move forward with the process.
As for the optimism, I think it is based on
what was done in Rio de Janeiro state with
the creation of the State Environmental
Institute and the new state licensing system.
Also, we listen to various parties through the
management council. Although IBAMA does
not have the same characteristics as a regu-
lator, since in the end the license is signed by
the president, we are a collegiate body. So
when there are differences of views between
experts and entrepreneurs, issues are taken to
the management council, giving each party
the possibility of submitting its arguments
and seek a better understanding. It is a more
transparent process.
Economist Ronaldo Seroa da Motta points
out that the lack of coordination between
In most cases, 80% of what
has to be done to process
licenses is repeated,
especially when they are of
the same type, whether it
is construction of a dam, a
railway, or a road. We do not
need to treat each licensing as
if it starts from scratch.
40. 40 November 2015 Ÿ The Brazilian Economy
INTERVIEW
agencies that look after communities and
traditional peoples and archaeological and
cultural heritage impairs IBAMA’s licensing
activities. What is your view?
Although the license is not restricted to
environmental issues and also covers social,
indigenous, and other aspects, the licensing
process should continue to be centralized
in IBAMA. [Environmental] impacts matter
and setting limits is difficult. IBAMA has the
legal mandate to demand compensation
and mitigation measures for these impacts
or prevent them from happening. Environ-
mental licensing is a very strong, powerful
instrument, which has a sound legal basis.
I think the other aspects are best served by
incorporating them into the license. What we
must avoid is that other agencies involved
do not meet deadlines or make demands
that are extraneous to the actual impact
of an infrastructure project. Ordinance No.
060/2015 gives the IBAMA responsibility for
analyzing the requirements. … I believe that
IBAMA should strengthen its technical staff
and diversify it so that we can carry out this
type of analysis. We need to hire experts
such as anthropologists and urban planners,
among others.
It’s been said that among the causes of delays
in infrastructure projects in Brazil is lack of a
thorough evaluation of each project. Do you
agree?
Licensing such projects as Belo Monte and
Madeira River hydroelectric plants has been
complex. We need higher-level guidance to
clearly define for the environmental area
which projects are of strategic importance
for the country’s development. This decision
should have been made by a representative
forum of society on the basis of strategic anal-
ysis that goes beyond environmental issues.
Project analysis needs to take into account
also social, economic, and political factors.
The lack of prior planning ends up creating a
conflicted licensing process, because much
remains to be discussed during that process.
There would be much more clarity if decisions
on a number of projects would come out of
a set of analyzed alternatives, which society
deems meets the demand for development.
I believe in a middle of the road approach,
which is not what some entrepreneurs want
or some organizations desire.
We have a consultant working
to identify best international
and national practices, such as
the Environmental Company
of the State of São Paulo, to
produce manuals to guide
the work of both IBAMA
staff and entrepreneurs and
consultants, so they know
what to expect from the
licensing process. Uniform
guidelines will reduce
discretion in granting licenses.
41. 41November 2015 Ÿ The Brazilian Economy
INTERVIEW
From2004to2014thenumberofapplications
for environmental licenses increased 335%
while the technical staff expanded by only
273%. Until the licensing process is rational-
ized, how does IBAMA intend to meet the
demand?
IBAMA now has excellent technical staff. This
is something that really has impressed me
… but the number of technicians has not
increased in proportion to the demand. We
also need to diversify the staff expertise. On
the other hand, IBAMA still lacks other tools.
… Our IT infrastructure is precarious and our
administrative processes too bureaucratic.
Previous management had been trying to
develop modern systems to respond to the
growth in demand. But we know that any IT
project in the public sector is slow because
contracts must comply with procurement Law
8666. On the other hand, we have very good
partnerships, for example, with the Institute
for Space Research for remote sensing to
monitor deforestation, which is one of the
best tools available in the world. We have
a new satellite that identifies daily defor-
estation, with a resolution four times more
accurate than the previous satellite. These are
important advances toward the goal of zero
illegal deforestation by 2030 announced by
President Rousseff. We are also developing
a new IT system that will computerize the
whole environmental licensing process. It will
gather data that will facilitate staff research
and allow several technicians to work on the
same process at the same time.
To what extent might federal fiscal adjust-
ment jeopardize IBAMA’s projects for 2016?
IBAMA’s budget has undergone cuts, although
it has been preserved mainly because of the
challenge of combating deforestation, which
cannot be done without resources. We are
working to increase our budget from R$250
million in 2015 to at least R$400 million in
2016. To do this we have just had an increase
in the federal environmental inspection fee
that will allow us to more than double the
revenues collected next year. We are also
working on finding external financing for
specific projects. IT modernization, the fight
against deforestation, and modernization of
the environmental licensing system are being
financed with development partners such as
the World Bank. It was necessary to set up a
framework for this because raising funds and
applying them is something that takes a lot of
dedication and specialized staff. … Regarding
management of human resources, my inten-
tion is next year to introduce the management
contract model, so we can remunerate for
results and differentiate remuneration for
those working in difficult areas, such as in the
Amazon region. Teams working in inspections
There would be much more
clarity if the decision on a
number of projects would
come out of a set of analyzed
alternatives, which society
deems meets the demand for
development.
42. 42 November 2015 Ÿ The Brazilian Economy
INTERVIEW
ANA is mandated to look after other uses of
water. They need to act in a more coordinated
way, not just in times of crisis.
Is IBAMA’s current planning aligned with
Brazil’s projected energy matrix and the goal
of reducing greenhouse gas emissions by
37% by 2025 that Brazil must present at the
21th Climate Conference in Paris?
What is missing is what I said initially: Brazil-
ians need to define what development model
they want, recognizing their limitations in
terms of natural resources and income. …
Take the water crisis. Although that is a natural
phenomenon that may be associated to
climate change, we aggravate the situation
because of a lack of sanitation and rivers
polluted by untreated sewage and damaged
by deforestation. We also waste water. Losses
in our water distribution and treatment
systems are very high. Some companies
have water losses above 50%, while less than
20% is desirable. In the semiarid region in
the Northeast, which suffers chronic water
shortages, losses in the water distribution
system exceed 50%. This is unacceptable.
Every day Brazil’s debt to the environment
becomes more difficult to mitigate because
we not only have to pay for it, we also have to
deal with more recent challenges of climate
change, such as increased desertification, and
to reduce deforestation. All this makes our
work extremely complex.
face difficulties. In October we had an envi-
ronmental agent shot by groups of loggers in
Maranhão state. Hardship working conditions
need to be recognized.
The critical situation of the Sobradinho reser-
voir reflects the water crisis that is affecting
hydroelectric power generation and water
supply. Should IBAMA take a greater role in
such measures as rationing water and use of
thermal power?
No. I think the water issue needs coordi-
nated work between the ONS, the National
System Operator, and ANA, the National
Water Agency. Although the ONS claims it is
seeking to preserve multiple uses of water, it
is an agency of the electricity sector. It tends
to prioritize generation of electric energy. The
We are developing a new IT
system that will computerize
the whole environmental
licensing process. It will gather
data that will facilitate staff
research and allow several
technicians to work on the
same process at the
same time.