Waving the Brazilian flag.Summary: Brazil's former President Fernando Henrique Cardoso Fernando Henrique Cardoso, pron. IPA: [fex'nãdu ẽ'xiki kax'dozu], (born June 18, 1931) - also known by his initials FHC and one of Latin America's largest banks, ItaE[bar] Unibanco, are scouring the region for investors. Joanna Andrews went to find out more..
Former President Fernando Henrique Cardoso was leading a trade delegation to the UAE and Qatar, accompanied by delegates from ItaE[bar] Unibanco, the world's eighth largest bank (with $85 billion in market capitalisation Noun 1. market capitalisation - an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share
market capitalization ).
The purpose of the visit is to strengthen ties between the GCC GCC: see Gulf Cooperation Council.
(compiler, programming) GCC - The GNU Compiler Collection, which currently contains front ends for C, C++, Objective-C, Fortran, Java, and Ada, as well as libraries for these languages (libstdc++, libgcj, etc). and Brazil. "Brazil is, to some extent, booming," said Cardoso, on a visit to the UAE capital Abu Dhabi Abu Dhabi (ä`b thä`bē, zä–, dä–), Arab. Abu Zabi, sheikhdom (1995 pop. 928,360), c. . "We're trying to extend our contact to different parts of the world."
Rainer Schwarz, Senior Executive Officer of ItaE[bar] Middle East, said, "We are pleased to have former President Cardoso visiting the GCC to discuss Brazil as one of the world's fastest-growing emerging markets and to highlight its strong appeal as an investment destination for Middle Eastern investors."
Brazil's Government forecasts the country's gross domestic product (GDP GDP (guanosine diphosphate): see guanine. ) to grow 4.5 per cent this year, above the 2.7 per cent it reported last year, but lower than the 7.5 per cent growth it reported in 2010.
Brazil is the world's sixth biggest economy, after overtaking Britain last year. The country is gearing up to host the 2014 FIFA FIFA International Association Football Federation [French Fédération Internationale de Football Association]
FIFA n abbr (= Fédération Internationale de Football Association) → FIFA f World Cup and the 2016 Olympic Games Olympic games, premier athletic meeting of ancient Greece, and, in modern times, series of international sports contests. The Olympics of Ancient Greece
Although records cannot verify games earlier than 776 B.C. , which means infrastructure investment is crucial.
"Brazil needs a lot of capital for infrastructure, real estate, the energy sector and education," Schwarz said.
Last year, foreign direct investment (FDI FDI
See: Foreign direct investment ) in Brazil totalled $66.7 billion, out of that AED AED - Automated Engineering Design 18.36 billion ($5 billion) came from Gulf countries. The links between the UAE and Brazil are steadily growing, as more Gulf investors look to the fast-growing Latin American economy for investment returns.
Mubadala investment firm owned by the Abu Dhabi Government, recently acquired a $2 billion stake in Brazil's EBX EBX Electronic Book Exchange (XML standard)
EBX Embedded Board Expandable (PC/104)
EBX Electronic Branch Exchange
EBX Enterprise Business eXtension (Orchestra Networks) Group, owned by the country's richest man - Eike Batista. The deal was Mubadala's first venture into Brazil.
THE PEOPLE'S PRESIDENT
Cardoso was President for two terms in the 1990s. He ushered in a period of social progress and economic turnaround after decades of military dictatorship A military dictatorship is a form of government wherein the political power resides with the military; it is similar but not identical to a , a state ruled directly by the military. . He reformed Government institutions, ended state monopolies and privatised companies. He closed insolvent banks and created an independent regulatory system. He made conditional cash transfers to the poor and began universal education and health care.
During Brazil's military dictatorship (1964 to 1985), Cardoso spent several years in exile and taught in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and France. He recently won the $1 million John W Kluge Prize The John W. Kluge Prize in the Human Sciences is awarded for lifetime achievement in the humanistic and social sciences to celebrate the importance of the Intellectual Arts for the public interest. Overview
The prize is awarded by the John W. for Lifetime Achievement in the Human Sciences.
Banker Middle East caught up with the former President..
You have been credited with curbing inflation in Brazil and stabilising the economy at a critical time.
What were the main challenges?
The main challenge I was confronted with was to curb hyper-inflation and prevent the Brazilian economy from plunging into depression. In order to achieve this goal it was imperative to combine financial stabilisation measures with the implementation of a safety net to alleviate the economic situation of the poorest segments of Brazilian society. This goal has been reached in and through the steady increase of the minimum wage in real terms since 1994.
What would you say was your biggest achievement as President?
Starting in 1999 we launched a program of direct cash transfer to favour the poorest and most vulnerable segments of society. Thus I would say that my main achievement as President was not just the economic stabilisation but also the consolidation of Brazilian democratic institutions and the strengthening of large-scale social programs.
You implemented investor-friendly policies and poverty reduction programs and have helped Brazil become a star performer.
How hard was it to bring about change?
The main obstacle for substantive change is, on the one hand, the resistance opposed by vested interests and, on the other hand, the lack of trust of society as a whole regarding the viability and scope of the proposed measures of change.
Brazil still has a relatively vibrant economy, what's the outlook and what are the main trends right now?
Brazil's econo my is highly diversified, based not just on oil and other minerals, but in food production and manufacturing. The domestic market is far more important than exports, since the latter account for only to 10 per cent of GDP. Our exports are globally oriented: to China and other Asian countries, to the United States, to Latin America, Europe and to the Middle East. Given this picture, I have great confidence in the future of Brazil provided that Government and civil society - including the business sector - have the energy and the skills to implement policies leading the country towards social and economic progress. Our ultimate goal is the building of a prosperous and decent society. In this respect, our main challenges are related, on the one hand, to the fields of education and justice. We need to offer better quality education to all and to amplify the access to the judiciary system. In a nutshell, to strengthen and enforce the rule of law.
From the economic point of view, the main challenges are in the area of energy and infrastructure. We badly need investments in roads, airports, havens etc. Our immense water reserves, our large oil reserves, mainly in deep sea waters, our sugar cane ethanol, the exploitation of all these assets require a clear road map leading Brazilian productive system towards a low carbon economy.
What are the main challenges hosting events like the World Cup and Olympics?
Brazil is a country whose population tends to consume more than to save. In this respect we resemble much more to the US than to China.
This reduced level of saving explains why our investment rate corresponds only to 19 per cent of GDP. Consequently we badly need foreign investment, mainly, in infrastructure.
The country has a strong currency right now and a Government that has been actively trying to weaken it with measures like higher taxes and purchases of dollars in the market. Could this end up hurting the economy?
Yes, I do agree that there are thresholds not to be overpassed by Government interventionist measures. Even though these limits have not yet been reached in the case of recent Brazilian Governments measures.
Brazil is a country whose population tends to consume more than to save
What are the main challenges facing Brazil right now?
In order to continue to grow, both economically and as a nation, Brazil needs to implement policies of income distribution, to give a fresh impetus to reforms in our tax system, to remold our social security institutions, to keep on fighting crime, violence and drug trafficking as well as paying more attention to people`s demands regarding the quality of health and educational services.
What do you think is the solution to repair the tarnished reputation in the global banking sector the Euro zone and Wall Street?
To be candid, nothing much has yet been done to enforce the regulatory measures prescribed by the Basel Bank and the G20 recommendations. I understand that to reduce the risk of global financial crisis it was necessary for the Federal Reserve to ease monetary restrictions. But the lack of adequate punishment of the men responsible for the prevalence of a casino-style in finance management and the disdain regarding the so-called moral hazard Moral Hazard
The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the could pave the way for a repetition in the future of similar crises.
In the case of the Euro zone, where economic recovery has proved much more difficult to achieve than in the United States, policies of 'fiscal austerity' are imposing a huge cost to European populations, without dealing either with the fiscal disaster or opening up new horizons for economic prosperity. Compared to what Brazil undertook to reorganise public spending and control inflation, Europe under the guidance of the European Central Bank and the support of the German administration is following a totally different approach. Compensatory measures to mitigate people's hardships have not been given priority. It looks as if what is at stake is an enormous process of socialisation of losses.
As major developed economies are faced with difficulties, Brazilian banking sector is looking strong in comparison; it is strong, diversified, and adequately capitalised?
Yes, but the positive current situation is due to the action taken by the Brazilian Central Bank to overcome the recurrent financial turmoil that affected Brazilian financial markets, beginning with the Mexico crisis of 1994, followed by the Asian crises of 1997, the Russian crisis of 1998 etc. In 1995 the Brazilian banking system was at risk. At that critical juncture the Central Bank intervened in some banks, impelled banks' control groups to transfer their bonds to the Central Bank and, in some case, impose penalties on bankers, including the freezing of personal assets to ensure debt payments back. From that period onward, the Brazilian financial system has been following the Basel rules. As a consequence the leverage level of the banks is low and derivatives have been seldom used.
On the other hand, the high level of commodity prices and subsequent Brazilian trade surpluses gave room for the Central Bank to enforce a policy of reserve accumulation. Today our reserves correspond to more than $350 billion and our foreign debt is practically non-existent.
The regulatory framework, both at the national and international levels, is being enforced. Nowadays the leading banks are trying to anticipate the requirement of Basel III. One Brazilian bank ranks among the top ten worldwide. Among the top Brazilian banks at least seven are controlled by local shareholders, three of them public and four from the Brazilian private sector, including the top.
What is your first impression of the Gulf region and what synergies do you see between the Middle East and Latin America?
I came to the Gulf region not just to invite your businessmen to come to Brazil, but also and foremost to learn. What some Middle Eastern countries have been doing, especially the United Arab Emirates United Arab Emirates, federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. and Qatar, is stunning. Not just because your construction undertaking have enhanced your infrastructure, but also and foremost because you are inventing a sustainable future for your nations. The bold goals you have set for your educational and cultural areas are awesome. The emphasis on the creation of low energy economies in countries so rich in oil and gas is just amazing. nBME
BRAZILIAN ECONOMY IMF IMF
See: International Monetary Fund
See International Monetary Fund (IMF). Forecast (Projected % Change)
Real GDP 3
Consumer Prices 4.2
Real GDP 5.2
Consumer Prices 5
From the economic point of view, the main challenges are in the area of energy and infrastructure
2012 CPI (1) (Characters Per Inch) The measurement of the density of characters per inch on tape or paper. A printer's CPI button switches character pitch.
(2) (Counts Per I Financial. All rights reserved.
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