Crisis in Brazil: US$ 20 Billion Drop in Investments Means 70,000 Fewer Jobs

Vale do Rio Doce worker It's estimated that Brazil lost the equivalent of US$ 27.8 billion in investments from domestic and international corporations as a direct consequence of the global recession, according to reports from the Brazilian press.

More specifically this refers to 46 large projects from 32 corporations which had plans to execute investments in the next four years, but which now have been canceled or postponed, said Rio daily O Globo.

This includes investments in such basic sectors as steel, mining, construction, sugar and ethanol processing plants, energy plants and harbor infrastructure.

Hit particularly hard are those directly linked to commodities, the basis of the Brazilian boom and which have suffered the most following the collapse of international demand caused by recession in developed countries and the decline of Chinese demand.

Steel and mining have suffered cut backs to the tune of US$ 12.3 billion. Vale do Rio Doce, world leader in iron ore exports and other minerals and the largest private corporation in Brazil has cut or frozen several projects or forced technical stoppages and staff vacations to make supply meet demand.

Earlier this month the corporation announced the canceling of a new US$ 5.5 billion steel foundry in the state of Espí­rito Santo in association with China's Baosteel. The plant was expected to produce 5 million tons of steel annually and create 3.000 permanent jobs.

The cut back or freezing of projects also has a direct impact on jobs, 70.000 less than forecasted, a growing headache for the administration of President Lula.

Mercopress

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