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Sao Paulo | Rio de Janeiro | Brasília | Curitiba | Porto Alegre | Recife | Belo Horizont Sao Paulo | Rio de Janeiro | Brasília | Curitiba | Porto Alegre.

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Presentation on theme: "Sao Paulo | Rio de Janeiro | Brasília | Curitiba | Porto Alegre | Recife | Belo Horizont Sao Paulo | Rio de Janeiro | Brasília | Curitiba | Porto Alegre."— Presentation transcript:

1 Sao Paulo | Rio de Janeiro | Brasília | Curitiba | Porto Alegre | Recife | Belo Horizont Sao Paulo | Rio de Janeiro | Brasília | Curitiba | Porto Alegre | Recife | Belo Horizonte London | Lisbon | Shanghai | Miami | Buenos Aires Brazil, the Emerging Giant: Notes on the Economy, Foreign Trade and Investment Flows Durval de Noronha Goyos Jr. Senior Partner - Noronha Advogados Hartford, Connecticut/USA – March 04 th, 2009.

2 1. Geopolitical fundamentals3. Foreign Trade 1.1 Strategic Advantages 3.1 Overview of Brazil´s foreign trade 1.2 Energy 3.2 Foreign Trade with Selected Partners 1.3 Water 3. 3 Trade in Agricultural products 1.4 Population / Social Classes 2. The Economy4. Investment Flows 2.1 GDP 4. 1 Inbound 2.2 External Debt 4. 2 Outbound 2.3 International Reserves 2.4 Inflation 5. Foreign Policy – General Aspects 2.5 Exchange rates 2.6 Interest rates 2.7 Problems 2.8 Current Account 2.9 Some industrial aspects 2.10 Unemployment POINTS OF PRESENTATION

3 Map of Brazil

4 1.1 Strategic Advantages Pop over 100 Million inhabitants GDP over US$ 1 Trillion GDP,Population,Agriculture Arable land over 20 millions hectars ARG KZT TUR UKR AUS IDN PKT NIG BRA USA IND RUS CHI BGL MEXJPN CAN GERUK NLDKOR SPN ITA FRA Source:Fiesp

5 Fundamentals of Brazil's Economy Source: Brazilian Ministry of Mines and Energy 1.2 Sources of Energy 86% 14% 55% 45%

6 Fundamentals of Brazil's Economy Source: MME/BEN (2008) and PNE Evolution of the Brazilian Energetic Matrix (%)

7 1.2 World's Oil Reserves 1Saudi Arabia266 2Iran138 3Iraq115 4Kuwait104 5UAE97 6Brazil94 7Venezuela87 8Russia79 9Libya41 10Kazakhstan39 11Nigeria36 12USA29 Source: Oil & Gas Journal – January, 2008 Fundamentals of Brazil's Economy In Billion of Barrels

8  2005 – 1.85 million barrels a day  2006 – Brazil achieves self sufficiency in oil  2007 – Discovery of Tupi oilfield with estimated 10 billion of barrels of oil. The discovery could double the Brazilian reserves.  2008 – Discovery of Carioca oilfield with estimated 70 billion barrels of oil. Discovery puts Brazil's oil reserves among the world's largest 1  2010 – 3.4 million barrels a day 2 Fundamentals of Brazil's Economy Source: 1 - Financial Times, July Petrobras estimate 1.2 Oil Production

9 Fundamentals of Brazil's Economy  22 billion liters/year (2008)  70 billion liters/year (2020)* Estimate  Increase in cultivated area by 67,000 hectares  Creation of 20,000 direct jobs and 60,000 indirect jobs  Investments in production chain estimated at around USD 1,5 billion for the next years  CO 2 emission reduction by 3.5 million tons/year 1.2 Ethanol Production Source: Sugar Cane Industry Union - UNICA

10 Fundamentals of Brazil's Economy 1.3 World´s Availability of Fresh Water Source: Brazilian National Agency of Water and Embassy of the Popular Republic of China

11 25% 52% 14% 1.4 Brazil's Social Development: Division by Classes in 2008 Source: Brazilian Institute of Geography and Statistics - IBGE Fundamentals of Brazil's Economy

12 Source: Brazilian Institute of Geography and Statistics - IBGE 1.4 Brazil's Social Development: Growth of Class C % of Population 34% 36% 48% 52%

13 2.1 Economic Growth % (GDP) Source: Brazilian Institute of Geography and Statistics – IBGE/IEDI Fundamentals of Brazil's Economy

14 2.1 Brazil's GDP (incorporating purchase power parity rating)  Total GDP US$ 2 trillion  GDP per capita US$ 10,300 (2008)  GDP per capita US$ (2007) Source: CIA World Book Fundamentals of Brazil's Economy

15 2.1 Brazil’s GDP in US$ Source: Brazilian Institute of Geography and Statistics - IBGE Fundamentals of Brazil's Economy GDP (Billion) ,0061,3001,378 Population (Million) GDP per capita (Thousand) 3,103,664,775,41 6,917,030

16 2.2 Development of External Debt YearGross Amount (US$ Billion)Net Amount (US$ Billion) , , , , , ,9165, ,4148, ,4115, ,686, ,212,86 * ,2(-6,6) Fundamentals of Brazil's Economy Source: Central Bank* JAN/2009

17 Fundamentals of Brazil's Economy Fundamentals of Brazil's Economy 2.3 Brazilian International Reserves YearUS$ Billion , , , , ,334 * ,800 Source: Central Bank*December/2008

18 Fundamentals of Brazil's Economy Fundamentals of Brazil's Economy 2.3 Brazilian International Reserves Source: Central Bank*December/2008 US$ Billion

19 2.4 Brazil: Inflation rate % Source: Central Bank Fundamentals of Brazil's Economy

20 2.4 Brazil´s Inflation Rate Targeting Source: Central Bank / IBGE US$ Billion

21 Fundamentals of Brazil's Economy 2.5 Exchange Rates Source: Central Bank Development R$ x US$

22 2.6 World's Interest Rates Source: Economist – January 2009 Fundamentals of Brazil's Economy

23 2.7 Main problems yet to be solved  taxes are not competitive;  interest rates are very high;  Brazilian currency overvalued. Fundamentals of Brazil's Economy

24 Source: Central Bank US$ Billion 2.8 Brazil's Current Account Fundamentals of Brazil's Economy

25 2.9 Some Industrial Aspects: Automotive Production YearCars and light commercial vehicles TrucksBusesTotal 20031, ,93826,9901, , ,33828,7582, , ,89235,2662, , ,00133,8092, , ,90435,0842, , ,68138,2233, Source: National Automotive Industry Association – ANFAVEA Fundamentals of Brazil's Economy

26 2.9 Some Industrial Aspects: Aeroplane Trade US$ million Exports 2,0503,3713,3023,4424,3676,064 Imports ,2341,5934,950 Balance 1,4582,4822,3352,2082,7741,114 Flow of Commerce 2,6414,2604,2704,6765,96011,014 Source: Development, Industry and Trade Ministry - MDIC Fundamentals of Brazil's Economy

27  The Brazilian ship program is under expansion and it includes new yards and investments at the order of US$ 4 billion/year. Nowadays, Brazil has 82 ships under construction and new other 154 constructions under approval.  The 26 Brazilian main yards have a capacity of processing of 600 thousand tons of steel/year.  In 2008 the Brazilian ship industry kept the direct jobs of 40,000 people.  By October 2007, the total of the loans from BNDES* was in the amount of R$ 3,6 billion in relation to the ship industry.  This positive scenario is part of an even most promising market with the new oil reserves in the called “Pre-Salt” coat. Source: National Trade Union of the Marine Reparation and Offshore Industry Fundamentals of Brazil's Economy 2.9 Some Industrial Aspects: Ship Industry

28 Fundamentals of Brazil's Economy Steel :  In 2008, Brazilian production reached record levels, closing at 33,7 million tons.  The estimate for 2009 is a decrease of 3% Cement :  In 2009, according estimates Brazil will maintain the production of 2008, which had an increase of 15% over Source: Brazilian Cement Association and Brazilian Iron Institute 2.9 Some Industrial Aspects: Base Industries

29 Fundamentals of Brazil's Economy 2.10 Unemployment rate in Brazil Months of April, May, June, September and December – 2002 to 2008 Source: Brazilian Institute of Geography and Statistics - IBGE

30 Source: Development, Industry and Trade Ministry - MDIC * Up to December US$ Billion Brazilian Trade Overall YearExports US$ FOB Imports US$ FOB Balance US$ FOB Flow of Trade US$ FOB ,6762,8333,84159, ,5273,6044,93192, ,8091,3546,45229, ,64120,6240,03281,27 * ,94173,1924,74371,13 Foreign Trade 3.1 Overview of Brazilian Foreign Trade

31 US$ Billion Source: Development, Industry and Trade Ministry - MDIC * estimate Foreign Trade 3.2 Brazil´s Balance of Trade

32 Brazilian Flow of Trade Source: Development, Industry and Trade Ministry – MDIC December/2008 Foreign Trade 3.2 Brazilian Trade with Selected Partners

33 Source: Development, Industry and Trade Ministry – MDIC December/2008 Foreign Trade 3.2 Brazilian Trade with Selected Partners

34 YearExports US$ FOB Imports US$ FOB Balance US$ FOB Flow of Trade US$ FOB ,6715,998,6840, ,0318,238,8045, ,0420,2010,8451, ,4226,7313,6967,15 * ,3936,1910,2082,58 US$ Billion Source: Development, Industry and Trade Ministry - MDIC * December 2008 Foreign Trade 3.2 Brazilian Trade with Selected Partners: European Union

35 US$ Billion Source: Development, Industry and Trade Ministry - MDIC * estimate Foreign Trade 3.2 Brazilian Trade with Selected Partners: European Union

36 YearExports FOBImports FOBBalance FOB Flow of Trade FOB 20045,443,711,739, ,835,351,4812, ,407,990,4116, ,7412,61-1,8623,36 * ,4020,04- 3,6336,44 US$ Billion Source: Development, Industry and Trade Ministry - MDIC * January 2009 Foreign Trade 3.2 Brazilian Trade with Selected Partners: China

37 US$ Billion Source: Development, Industry and Trade Ministry - MDIC * estimate Foreign Trade 3.2 Brazilian Trade with Selected Partners: China

38 YearExports FOBImports FOBBalance FOB Flow of Trade FOB ,0911,358,7431, ,5312,669,8735, ,5214,659,8639, ,0618,726,3443,78 * ,4225,621,7953,04 US$ Billion Source: Development, Industry and Trade Ministry - MDIC * December Foreign Trade 3.2 Brazilian Trade with Selected Partners: USA

39 US$ Billion Source: Development, Industry and Trade Ministry - MDIC *estimate December 31, 2008 Foreign Trade 3.2 Brazilian Trade with Selected Partners: USA

40 Source: US Trade*estimate December 2008 Foreign Trade 3.2 Brazilian Trade with State of Connecticut: % Increase Increase of %

41 Source: Development, Industry and Trade Ministry – MDIC - December/2008 Foreign Trade 3.2 Brazilian Trade with Selected Partners: Sources of Imports

42 Products Position between main exporters % of Total Global Exports Orange juice1º81% Poultry1º35% Sugar1º33% Coffee1º30% Tobacco1º27% Bovine Meat1º24% Ethanol1º13% Soy2º32% Soy Oil2º28% Pork3º11% Cotton3º5% Source: International Relations and Trade Institute - Icone Brasil Foreign Trade 3.3 Brazilian Trade in Agricultural products

43 Source: Brazilian Confederation of Agriculture and Livestock – CAN *Estimate US$ Billion Foreign Trade 3.3 Brazilian Trade in Agricultural products

44 DestinationsAgribusiness Exports (US$ million) Var. % 07/06 (b/a) Total Exp. (c) Increased Value % 2006 (a)2007 (b)Basic SemiManufactured 1.EU , ,43 14,5328,04 2. USA , ,55 19,70 60,75 3. China , ,69 29,23 3,09 4. Russia , ,37 30,72 4,92 5. Argentina , ,19 6,31 82,50 6. Japan , ,42 14,65 26,93 Source: Brazilian Confederation of Agriculture and Livestock – CAN *Estimate Foreign Trade 3.3 Brazilian Trade in Agricultural products

45 Source: Brazilian Confederation of Agriculture and Livestock – CAN *Estimate Foreign Trade 3.3 Brazilian Trade in Agricultural products: Main Destinations

46 Source: FAO/IBGE Foreign Trade 3.3 Brazilian Trade in Agricultural products

47 US$ Billion Source: Unctad, World Investment Report 2008 Brazil Investment Flows 4.1 Foreign Direct Investments: Inflows by Country

48 Source: The Economist - January 31, 2009 Investment Flows 4.1 Foreign Direct Investments: Inflows, 2008 estimate, $bn

49 US$ Billion Source: Central Bank * December/2008 Investment Flows 4.1 Foreign Direct Investment: Inflows

50 US$ Billion Source: Central Bank Investment Flows 4.2 Foreign Direct Investment: Outbound

51 Source: Unctad, World Investment Report 2008 US$ Billion Brazil Investment Flows 4.2 Foreign Direct Investment: Outflows by Country

52 Brazil’s prevailing foreign policy doctrine recognizes the vulnerability of the country in a number of areas:  Economic;  Technological;  Political;  Commercial; and  Military. Source: Brazilian Ministry of Foreign Affairs General Aspects of Brazil Foreign Policy 5. Foreign Policy – General Aspects

53 Brazil’s present foreign policy doctrine recommends alliances with other major developing countries such as: China; India; Russia; and South Africa In order to minimize such vulnerabilities. Source: Brazilian Ministry of Foreign Affairs General Aspects of Brazil Foreign Policy 5. Foreign Policy – General Aspects

54 Address: Alexandre Dumas, 1630 CEP: São Paulo SP Brazil Phone: (55-11) Fax: (55-11) (55 11) NORONHA ADVOGADOS Located in one of the main financial centers of the city, the São Paulo office is the head office of Noronha Advogados and the oldest, having been opened in June It concentrates the highest number of professionals and is the centre for the firm’s administrative and financial departments. The São Paulo office houses an efficient and up-to-date library and computer network, fully connected to the other offices, in Brazil and abroad. Contact: Durval de Noronha Goyos Júnior Bento Delgado Kardos

55 NORONHA ADVOGADOS

56 Durval de Noronha Goyos Jr.


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