On the Jobs Front, Brazil Is No U.S., Says Minister

Brazilian minister Miguel Jorge "Credit for industry should not be a problem. Up to the end of the year, 90 billion Brazilian reais (US$ 36 billion) in financing should be made available," said the minister of Development, Industry and Foreign Trade, Miguel Jorge, during the 13th National Meeting of the Chemical Industry, which took place in São Paulo.

Apart from the measures of the federal government to overcome problems and avoid the worsening of reflects of the global financial crisis, investment is necessary to strengthen and provide incentives to the export capacity of national industry.

According to the minister, the deceleration of the Brazilian economy has already started, but should continue light throughout 2009, very different from what happened in the United States, where close to 2 million people have already been dismissed this year.

"Up to now Brazil has only registered a reduction in the number of people being employed. The total dropped from 200,000 to 70,000," pointed out Jorge.

"Of the investment forecasted by vehicle factories, most should be maintained for production. At the end of the year, the auto industry, as traditionally takes place, should grant employees leave. Then, if necessary, it should reduce production on weekends, holidays and in the third shift. There are many measures to be taken before dismissals," he said.

"In the medium and long run, we have no information regarding dismissals in specific sectors, just in companies," he added.

Up to September, recalled the minister, the Brazilian industry had rates of growth of 5.9% a year. "There has been a fast halt in the auto sector, 300,000 vehicles are sitting in the carmakers plants. However, the measures adopted by the government are not restricted to the auto and building sectors, which felt the greatest impact of the crisis," he pointed out.

According to the minister, the Brazilian Development Bank (BNDES) has already approved the issuing of funds. In the month of October, for example, the BNDES card reached its best performance to date, with 110 million reais (US$ 44 million) in transactions.

In the same period, the Central Bank of Brazil also took measures to face the crisis. "In the agricultural area the government also increased the issuing of funds. A total of 500 million reais (US$ 200 million) has been made available for the Midwest to help cover the costs of machinery purchases," he added.

Miguel Jorge also mentioned the agreement recently signed between Brazil and the European Union, to benefit exports of micro and small companies. "This agreement should help reach the target of 10% growth in participation of micro and small companies in the total exported by the country."

"Surviving Brazilian businessmen are heroes. We lived and survived eight economic plans and six new currencies. The solution is to maintain the level of investment, one of the factors necessary to maintain development," he guaranteed.

Petrobras president José Sérgio Gabrielli spoke to businessmen about the part played by the company as a supplier of raw material for the chemical industry and as a shareholder in petrochemical organizations.

The presentation focused on themes like the perspectives of the petrochemical industry in Brazil and worldwide, investment and Petrobras projects, as well as the challenges and opportunities after discoveries in the pre-salt layer.

Gabrielli said that the sustained growth forecasted for the Brazilian economy, aligned to the new oil discoveries, establishes a favourable scenery in the long run for the development of the national petrochemical industry. "We plan to maintain our investment in the oil sector, both accompanied by Braskem and Quattor, of whom we are partners, and in individual projects," he guaranteed.

According to the executive, the greater competitiveness in the petrochemical sector promotes consolidation on the Brazilian market, guaranteeing several advantages for the domestic petrochemical industry, with the expansion of funding and the promotion of investment in expansion.

"One of the main projects is the expansion of the Brazilian strategy for South America with profitability and in an integrated manner with other Petrobras partners," he evaluated.

Gabrielli also spoke about the perspectives for production of oil in the pre-salt layer, which has estimated oil volumes of recoverable oil of between 5 billion and 8 billion barrels of oil equivalent (boe); in Iara block, estimated reserves are between 3 billion and 4 billion boe and in Parque das Baleias, 1.5 billion to 2 billion boe. "We may double our reserves with these three discoveries alone," he said.

According to the president of the oil company, the main challenge for production in the pre-salt layer is not the volume of investment for exploration in the region, "but the method of production, as we have a series of logistics and technological challenges," he said.

With regard to the possibility of lower fuel prices in Brazil due to lower oil prices on the global market, Gabrielli said that diesel and petrol prices do not fluctuate on the domestic market according to prices on the foreign market. "We maintain correlation between fuel in Brazil and abroad considering a long-term view," he said.



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