1. Brazil: New Initiatives for Industrial and Technological Development
Opportunities for Foreign Investors
Luiz Fernando Furlan
Minister of Development, Industry and
Foreign Trade
June 2004

2. There is a Brazil that many people know
Amazon forest
Soccer
Carnival
Coffee
It keeps being successful, but there is still more to know

3. The Brazil that you must know
Innovation, technology, competitiveness and productivity

4. The Brazil that you must know
GDP: US$ 500 billion (2003);
Per capita income: US$ 2,800 (2003);
6,300 Ph.D. graduated every year;
97% of the children aged 7 to 14 are in school.

5. The Brazil that you must know
The number of current accounts in Brazilian banks increased by 28%, from 56 to 71.5 million ( );
In 2003, from 18.7 millions of income tax declarations, 18.2 were submitted through the internet (97.3%);
Almost 100% of the import/export procedures are performed electronically through Siscomex – an integrated trade system;
In 2003, the volume of bank transactions made through the internet by individuals increased by 27.9%, reaching R$ 1.5 billion.

6. The Brazil that you must know
Phone lines (fixed + mobile) per 1,000 inhabitants
Source: International Telecommunication Union / 2002

7. The Brazil that you must know Personal Computers per 1,000 inhabitants
Source: International Telecommunications Union / 2002

8. The Brazil that you must know Users of Internet per 1,000 inhabitants
Source: International Telecommunications Union / 2001

9. The Brazil that you must know Industrial Production
Base: = 100
Source: MDIC, IBGE

10. The Brazil that you must know
Vehicles Output
(x 1000)
Source: Anfavea

11. The Brazil that you must know
Shoes Output
(millions of pairs)
Source: IBGE

12. The Brazil that you must know
Cell Phones Output
(x 1000)
Source: MDIC

13. The Brazil that you must know
Steel Output
(x 1000 ton)
Source: MDIC

14. The Brazil that you must know
Trade Balance
US$ billion
Target for 2006: US$ 100 billion
Source: Secex/MDIC last 12 months ending in May

15. Competitive and High Added Value Export Sectors:
Exports total in 2003: US$ 73 billion –
Break down:
Transport materials: US$ 10.6 billion – [14.5%];
Aircraft: US$ 1.9 billion – [2.6%];
Vehicles and parts: US$ 4.1 billion – [5.6%];
Steel and metallurgical products: US$ 7 billion – [9.6%];
Petrochemical sector: US$ 4.9 billion – [6.7%];
Mobile phones: US$ 1.2 billion (to USA only) – [1.6%].

16. The Brazil that you must know
External Exposure
Interest payments/Exports
Net external debt/Exports
19,9
36,4
3,6
1,8
1,0
1,5
2,0
2,5
3,0
3,5
4,0
1998
2000
2002
2004* 36 32 28 % 24 20
Fernando: Lei incentivo Regional. Lei prorrogada para a Inovação regional 16
1998
2000
2002
2004*
Source: Central Bank of Brazil (*forecast)

17. Development and Sustainable Growth
Focus of the New Development Initiative
Industrial
Modernization
Innovation and
technological
development
Targets
Economic growth,
Improvements in competitiveness
and efficiency
Os pontos de modernização, desenvolvimento tec. e incentivo ao investimento eles são elementos que contribuem para capacidade de inovação. E a partir do processo de inovação geramos a melhor inserção externa (competitiva), fortalecemos a PME´S e as escolha das opções gera necessariamente a melhoria a capacidade de inovação da matriz produtiva.

18. Guidelines
Enhancement of the country’s technological base in areas that show potential for national and international growth;
Creation of a favorable environment for private and public investments;
Coordinated actions with states, metropolitan regions and local governments;
Employment and income generation;
Improvement of the image of Brazil abroad.

19. Initiatives for Industrial, Technological and Foreign Trade Development
Competitiveness and innovation:
R$ 15 billion (almost US$ 5 billion) of governmental investments;
Creation of the National Council on Industrial Development;
Creation of the Brazilian Agency for Industrial Development;
Horizontal and vertical policies.

20. Initiatives for Industrial, Technological and Foreign Trade Development
Competitiveness and innovation:
Future bearer sectors
(Biotechnology, Nanotechnology, Biomass)
Strategic options
Semiconductors Software
Capital goods Medical and pharmaceuticals products

21. Initiatives for Industrial, Technological and Foreign Trade Development
BNDES – Programs and credit lines:
PROSOFT (US$ 35 million):
US$ 26 million already made available by June;
MODERMAQ (US$ 860 million);
PROFARMA (US$ 172 million);
Customized Capital Goods (US$ 172 million);

22. Investment Room
The Brazilian Administration is setting up an investment room designed to help foreign investors to invest in Brazil;
Its objective is to bring together decision makers from important related areas in Federal Government and make them ready and available to get in touch with anyone willing to invest in Brazil;
Fast track policies to overcome burocracy.

23. FDI Composition – 2000-2003 Major Sectors Others Telecommunications
(US$ 82 billion, FDI inflow)
Others
Telecommunications
Finance
Vehicles
Chemicals
Energy
Trade
Source: Central Bank of Brazil

24. Announced Investment Plans
(US$ millions)
Sector
2003
2004
Share (%)
2003 / 2004 (%)
Mining
6 495
11 401
34,5
140,8
Steel
764
5 720
17,3
648,7
Transports
232
3 334
10,1
1 337
Mechanical/Metallurgy
1 036
3 195
9,7
208,4
Electro/electronic 75
2 275
6,9
2 933,3
Telecommunications
863
2 078
6,3
Infrastructure
12 941
1 484
4,5
-88,5
Chemical products
457
804
2,4
75,9
Petrochemicals
247
750
2,3
203,6
Others
3 805
1975
6,0
-52
Total
26 915
33 016
100
22,7
Source: BNDES/MDIC

25. 2004 Outlook FDI: US$ 14,25 billion forecast (Central Bank)
Infrastructure: R$ 298 billion PPA
Investment announcements: 71% growth (2003 / 2002)
Exports: US$ 83 billion Target for 2006: US$ 100 billion
GDP growth: 3.5% (2% due to exports)