Davos: Brazil is Back

Op-Ed

Last week saw numerous businesspersons, opinion-makers and high-ranking political players unite at the World Economic Forum in Davos, in Switzerland.

GEORGIA TODAY received the following speech from the President of Brazil in which he speaks about the reform program which has been transforming Brazil.

President Temer: We have turned the page of the economic crisis because we were able to say no to populism and act responsibly. Moved by a long-term vision, our government has been building, through a permanent dialogue with the National Congress and society, the foundations of an efficient State, which provides its citizens with quality services within a balanced budget. These also constitute the foundations for sustainable growth, indispensable to advance the development of Brazil and effectively get millions of Brazilians out of poverty.

In a little less than a year and a half of management, we have corroborated our commitment to fiscal balance. The results are here. Inflation has fallen and is once again under control. The exchange rate has been stabilized. The interest rates have shrunk to their lowest historical levels. It was with achievements and not voluntarism that we succeeded in restoring the confidence in the Brazilian economy, confidence which has already reflected upon increasing industrial activity, vitality of foreign trade and renewed job creation.

An investor observing Brazil today is able to see a government working with precise diagnostics, applying solutions which actually work. They will note that it is an administration engaged in making the business environment ever more dynamic. Everywhere, we have been removing bureaucratic obstacles, which used to obstruct the pathways for entrepreneurs, and it has become easier to start a business, import and export. The modernization of employment law, which has already come into force, is a particularly relevant milestone in our efforts to tune Brazil into the realities of the current economy, without affecting workers` rights. On our horizon, tax simplification is still to come in order to make tax payments swift and rational. In all of those actions, what the trend heralds is a Brazil where there is ever-increasing economic freedom.

Public accounts in good order and a competitive private sector are essential for sustainable growth as much as is quality infrastructure, consistent with the vast economic potential of our country. That is why, in Davos, I presented the various opportunities of the Advancing Partnerships Program (`Avançar, Parcerias`), comprising Federal Government concessions and privatizations. The model which we have instituted offers clearly defined and stable rules, assuring legal security. It is not by chance that it has attracted attention throughout the world. To date, we have completed over 70 projects, including roads, ports, airports, power transmission lines, gas and oil fields. Investments have been estimated at R$142 billion. In 2018, there will be another 75 project proposals, which also include railways, likely to attract over R$130 billion. The reform will strengthen the credibility of the economy, enabling it to join in an enduring growth cycle.

The changes which Brazil has been undergoing, which have indeed better prepared it for the 21st century challenges, are not exhausted at the domestic level. In the foreign area, we have acted in the spirit of openness, considering that it is fallacious to think that there can be development in an environment of a closed economy in the current world. Our endeavor in achieving more and better integration begins in our region, in the Mercosul: jointly with all other partners, Brazil has been setting in motion a program which advances free markets as one of its key pillars. In addition to removing inter-block trade barriers, we have been fostering a rapprochement with the countries of the Pacific Alliance. For the first time in twenty years, we have a realistic perspective to conclude the Mercosul-European Union trade agreement, an agreement which we wish to be wide-ranging and balanced, and which is truly able to cater for the interests of Brazilian society. In addition, we have been opening new negotiation fronts with partners from a variety of quarters.

An undeniable fact for those who keep a sense of objectivity is that Brazil has already travelled a long way under our government, and at speed. We have achieved a great deal, always on the basis of dialogue, the raw material of democracy; with a genuine disposition too, aimed at bringing alignments closer and articulating efficient solutions for the needs of the country.

The challenge which remains now, and to which we are fully committed, is the Social Security reform. At Davos, I ratified my commitment to a fair and sustainable social security system, able to correlate with the demographic evolution of our population. This is a commitment which I renew, firstly, before the Brazilian people, and particularly the less privileged; after all, the system as it is, transfers income from those who have less to those who need it the least. The reform will abolish privileges and will ensure the payments of all current and future pensions. It will reinforce the credibility of the Brazilian economy enabling it to join in a lasting growth cycle.

Bravely and with renewed resolve, we have been facing the issues with which the historical juncture presents the whole nation. I am left without any doubt whatsoever, that once again, the challenges will be overcome and common good prevail.

Brazil is great country which garners assets of all sorts. It is a consumer market with over 200 million people, with abundant natural resources. Our people are creative and hard-working. We have a diversified industry, a highly productive agriculture. Our energy matrix is one of the cleanest in the world. We are a country with continental dimensions, located far from geopolitical tensions. These are the reasons which have always made Brazil an attractive destination for investors. In recent times, the problem was that the country had somewhat lost its bearings.

What our government did again was to bring Brazil back on course. From the outset, we were clear about the course we needed to follow: the course of responsibility, of openness, of freedoms. And we will not divert from such a course; nor will we divert ourselves from it.

This is the message which I conveyed to the Brazilian people and which I took to Davos.

First published in ‘Valor Econômico’ on January 22, 2018

Michel Temer, President of the Federative Republic of Brazil