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A Map to Lower Brazil’s Interest Rates from 19.5% to 4%

One of the goals established in the Strategic Map of Industry, released Tuesday, April 26, by the National Confederation of Industry (CNI), is a reduction in the country’s real interest rates.

According to the Central Bank, the index was 14.1% at the end of 2003. The CNI expects it to fall to 6% by 2010 and 4% in 2015.


The president of the Federation of Industries of the State of São Paulo (Fiesp), Paulo Skaf, commented: “We cannot live with these absurd interest rates, which bleed individuals, legal entities, and the government itself. The 0.25% increase in the benchmark interest rate announced at the last meeting of the Copom (the Central Bank’s Monetary Policy Committee) represents an additional expense of US$ 792 million for the government, when projected over a 12-month period.”


The Map defines 18 goals for Brazil to achieve sustainable development in the next 10 years and suggests the implementation of 63 strategic programs to reach these goals.


The CNI also expects a reduction of the tax burden, which was equivalent to 34.9% of the Gross Domestic Product (GDP) in 2003, according to the Federal Revenue agency. The estimate is for the index to drop to 30% in 2010 and 27% in 2015.


For the industrial sector the Brazilian tax system is complicated and lacks transparency.


“The agenda proposes complementary measures to alleviate investment. This is, to eliminate taxes on everything that constitutes investment. You can’t punish someone who has yet to produce. If I buy a machine to produce, why do I have to pay taxes before it’s producing? The world doesn’t do this, and Brazil shouldn’t do it,” affirmed the president of the CNI, Armando Monteiro.


The Strategic Map of Industry establishes other goals as well, such as raising the percentage of residences served by sewer systems in Brazil to 70% in 10 years.


In 2003, the index was 48%, according to the Brazilian Institute of Geography and Statistics’s (IBGE) National Residential Sample Survey (Pnad).


The map also proposes that it would be ideal to expand the percentage of homes with internet access from 11% (the index registered by the Pnad) to 30% by 2015.


The CNI regards education to be a mainspring for achieving greater productivity.


The map indicates, for example, an expectation that industrial productivity will grow 6% annually through 2015. The variation in industrial productivity between 2001 and 2003 was negative (-0.7%), according to the CNI.


“The education and health of the Brazilian population are pillars of the Strategic Map,” the report asserts. The entrepreneurs assign knowledge, disseminated through education, an essential role in the development of innovations.


The competitiveness of Brazilian industry, they add, will only be achieved through the qualification of specific personnel for the productive sector. The entrepreneurs also propose more incentives for entrepreneurship and creativity.


Agência Brasil

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