Brazil’s Lula Pays 3rd Visit to Africa

 Brazil's Lula Pays 3rd 
  Visit to Africa

Brazilian President
Luiz Inácio Lula da Silva is back in Africa.
The purpose of Lula’s third trip to the continent in less than two
years is to establish closer diplomatic relations with the African
continent. Brazil should soon have diplomatic representation
in Ethiopia, which headquarters the African Union.
by: Juliana
Cézar

President Luiz Inácio Lula da Silva arrived in Africa on July 26 for
the purpose of establishing even closer diplomatic relations with the continent.
In addition to transferring the temporary presidency of the Community of Portuguese-Speaking
Countries (CPLP) to San Tome and Principe, the Brazilian President wants to
foster trade relations with this country, as well as Gabon and Cape Verde,
two other stops on his third trip to the continent.

The Brazilian Minister
of Foreign Relations, Celso Amorim, who is accompanying the President, observed
that the three countries can become important "windows of opportunity"
for increasing Brazil’s trade relations with Africa. And he underscored President
Lula’s decision to open new embassies on the continent.

Amorim added that Brazil
will soon have diplomatic representation in Ethiopia, where the headquarters
of the African Union is located. "One cannot desire a policy of closer
relations with Africa without diplomatic representation in the country that
hosts the African Union," the Minister pointed out.

Gabon, for example, is
a "very well placed" country for Brazil to establish or improve
relations with other African nations, in Amorim’s view. The Minister also
recalled the geographic location of Cape Verde, an African country which,
in his opinion, can become "a center for the diffusion of Brazilian actions."

Besides the creation of
new diplomatic posts, the Brazilian government will also open a branch of
the Bank of Brazil, in Luanda, capital of Angola.

During his African trip,
President Lula will inaugurate two telecenters donated by Brazil, the first
in San Tome and Principe, and the second, in Cape Verde. Altogether, two servers
and nine 18 thin clients (computers without hard drives) were sent to Africa.

In San Tome. the Brazilian
President will also announce the authorization of US$ 650 thousand for bilateral
cooperation programs developed between the two countries. Various programs
are also underway in the health and agriculture areas, although the main ones
are in the field of education, where they serve a total of two thousand people.

During his visit to the
country, President Lula will donate approximately 60 kilos of medications
that make up the Aids treatment cocktail. San Tome is one of the few developing
countries in Africa with a low incidence of this disease. The medicine donated
by the Brazilian government will be sufficient to treat all the Aids victims
in the country, around 100 individuals.

US$ 90 Billion

The Minister of Development,
Industry, and Foreign Trade, Luiz Fernando Furlan, told a group of entrepreneurs
attending the XIV Brazilian Congress of the Confederation of Commercial and
Entrepreneurial Associations of Brazil, in Curitiba, in the southern part
of the country, that Brazil’s exports should increase 50 percent over the
next two years. According to Furlan, this year alone the total should rise
from last year’s US$ 60 billion to around US$ 90 billion.

In the Minister’s view,
the world market still offers considerable space. He told his business audience
that many people are unaware of Brazil’s industrial potential. He pointed
out, for example, that the country is the world’s largest producer of electronic
games for cell phones. "The figures leave us optimistic that this year’s
economic growth will surpass the 4 percent forecast."

The Minister justified
his optimism by recalling that, in the sphere of loans, a critical factor
for small firms, data from the National Economic and Social Development Bank
(BNDES) for the first half of this year indicate a 46 percent growth in the
supply of credit for small and medium-sized companies, in comparison with
last year, for a total of US$ 1.8 billion (R$ 5.6 billion). According to him,
various forms of credit are being launched for firms to modernize themselves.

Furlan referred to the
creation of the Machinery Modernization Program (Modermaq), which will finance
90 percent of a company’s equipment expenses, with a five-year repayment period
and a fixed annual interest rate of 13.95 percent, a little more than 1 percent
monthly. According to the Minister, the government has US$ 813 thousand (R$
2.5 million) available for this program at the outset.

Risk Premium to Fall

Minister of Development,
Industry and Foreign Trade, Luiz Fernando Furlan, says he is certain that
Brazil’s risk premium will fall from the present 600 to around 400.

The minister points out
that a series of factors indicate a drop. The sum of exports and imports is
near US$ 30 billion and the country has a cumulative 12-month cash flow surplus
of around US$ 30 billion, as well.

Both numbers show firm
administrative control and robust commercial strength. Furlan says that the
International Monetary Fund mission will take note of those factors.

He explained that a drop
in the risk premium is important as it will create room for further reductions
in the country’s basic interest rate. He added that the effects of the economic
upturn during the first six months of the year will be felt, giving employment
and income a boost.


Juliana Cézar works for Agência Brasil (AB), the official press
agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.

Translated
from the Portuguese by David Silberstein.

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