• Categories
  • Archives

Brazil Confounds the Rich


Brazil Confounds the Rich

From now on, the US and other big players of the international
trade game will have to negotiate
with the poorer nations,
according to Brazil’s Planning Minister, Guido Mantega. He is
talking about the
G-22, a group of developing countries led by Brazil,
which include other powerhouses like India
and China.

by:
AB

 

Brazilian Minister of Planning, Guido Mantega, described as "a normal move by big international market players,"
the eventual reactions of rich countries to Brazil’s leadership in the G-22 (the group formed by developing countries just
prior to the V Ministerial Meeting of the World Trade Organization (WTO), in Cancún, Mexico, to defend an end to
protectionism and subsidies provided to agriculture by the rich countries). "Each country looks out for its own interests, and you have
to join in blocs, because, if you work alone, you may become weak," the Minister affirmed.

In his view it was a great idea to create a bloc composed of medium and large countries with great potential, such as
India, China, and Brazil, to fight on behalf of common interests in world trade. "These are continental-size countries that have
a great capacity to absorb investments and engage in foreign trade, and this must have been disturbing," the Minister said.
For him, evidently, the "big" players are attempting to react, but they will have to continue to negotiate.

Mantega also believes that the Brazilian position, both during and after the encounter in Mexico, will not provoke
reprisals or a diminution in business transactions in multilateral or bilateral negotiations. "I don’t see any problem. It is a
normal reaction and will remain confined to the verbal arena."

The Minister, who gave an address to British businesspeople at the Embassy of the United Kingdom, insisted on
making it clear that there are two kinds of investors nowadays. One, which he criticized, is very concerned about competition
from a "Brazil which is gaining markets," while the other considers the country attractive in terms of business prospects,
offering good chances to make money.

"(The latter) is an investor who is beginning to realize that here his/her business activities can prosper to a greater
extent than in the United States and the European Union, where rates of return are lower," Mantega said.

For the Minister, this is an excellent situation, because investors, when they perceive that Brazil is currently more
productive in various sectors and should become the world’s largest producer of food goods in the next three to four years,
will come here in search of profits.

Slow Growth

A weekly survey of 100 financial institutions conducted by the Central Bank (BC) projects growth of 0.83 percent in
the Gross Domestic Product (GDP) in 2003. The estimates in last week’s survey were for 0.94 percent. This is the
seventh consecutive week in which these estimates were lowered. For 2004, the survey continues to bet on 3 percent growth in
the GDP, as it has for 39 weeks.

Projections for the Broad Consumer Price Index (IPCA), on which the government’s inflation targets are based,
also registered a decline, from 9.61 percent last week to 9.59 percent in this week’s survey, with respect to 2003. For 2004,
market forecasts were reduced from 6.20 percent to 6.10 percent. The official inflation target for this year is 8.5 percent, and,
for 2004, 5.5 percent.

In the opinion of the five financial institutions with the greatest predictive success among those polled for the
survey, the IPCA forecast for 2003 fell from 9.63 percent to 9.59 percent from last week to this. For next year, these institutions
continue to predict an index of 6 percent.

The estimate for the annual prime interest rate (Selic) at year’s end was lowered from 18 percent last week to 17.83
percent this week. The current rate stands at 20 percent. For 2004, the survey forecasts a 15 percent Selic, for the third
consecutive week.

For the third week in a row, as well, there was an increase in the predicted ratio between net government debt and
the GDP for this year. Since last week, the predicted ratio rose from 55.50 percent to 55.90 percent. According to the BC’s
last monthly report, issued in July, the debt/GDP ratio stood at 57 percent. For 2004 the market expects this ratio to amount
to 54 percent. As for foreign direct investments this year, the survey continues to forecast a volume of US$ 8.5 billion, for
the second week in a row.

With respect to this year’s trade balance surplus, the market is betting on a figure of US$ 20.40 billion, compared
with last week’s US$ 20 billion.

 

The material for this article was supplied by Agência Brasil (AB), the official press agency of the Brazilian
government. Comments are welcome at lucas@radiobras.gov.br

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazilian Referendum on Firearms Ban Is Mandatory

Brazil’s Minister Carlos Madeira, acting president of the Federal Elections Court (TS), confirmed October ...

Brazilian Premium Coffee Gets a Home in California

Limoneira Company, a 112 year-old Santa Paula land, farming and food company, is bringing ...

Brazilian Associations Get Help on Obtaining Green Seal

Of the 62 forest management units in Brazil that possess what is referred to ...

Don’t Expect Any Turn to the Left or Right, Warns Brazil’s Finance Minister

Guido Mantega, Brazil’s Finance minister, discarded any “left turn” or leaning towards the left ...

Chemical Industry in Brazil Expects to Grow 19% This Year

Estimates by the Brazilian chemical industry say that industry should post revenues of US$ ...

No Law Will Make the Brazilian Judiciary Abide by the Laws

Since it was enacted in October 1988, the Brazilian Constitution has developed judicial independence ...

More than 200 Brazilians Say Present at Dubai’s Big 5 Building Fair

The Big 5 Show, version 2008, the main building sector fair in the Arab ...

Brazil Says Man Accused of Being Pay-Off Scheme Moneyman Was Never Lula’s Consultant

The office of Brazil’s Presidency has released a note denying that adman/businessman Marco Valério ...

Global Warming to Be Monitored by Brazil Amazon’s Giant Tower

Construction has begun on a giant observation tower in the heart of the Amazon ...

Debenture Market in Brazil Gets Hot: 167% Growth This Year

Brazil's debenture market grew 167% in the first half this year, compared with the ...