Brazil and Norway: A Strengthening Partnership Ambassador Sergio E. Moreira Lima Bergen Chamber of Commerce and Industry. Manifestasjon 2010 Conference. Bergen, February 17, 2010 1
Brazil - Norway I - Brazil: sustainable economic growth, overcoming the international crisis II - Brazil-Norway: strengthening relations III A partnership in strategic areas 2
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Most populated countries 1China.1,335,700,000 2 India..1,176,748,000 3 United States 308,632,000 4 Indonesia..231,369,500 5 Brazil 192,445,000
World largest countries (Km2) 1. Russia 17,075,200 2. Canada 9,984,670 3. United States. 9,826,630 4. China 9,596,960 5. Brazil.8,511,960
Distance Oslo Rio = 10 400 Km. Brazil land frontier = 16 855 Km
Coastline: Brazil: : 7491 Kms Norway: : 25148 Kms
Among the largest economies Country ranking GDP (nominal). Source: World Bank (2009) Rank Country US$ M 1 United States 14,204,322 2 Japan 4,909,272 3 China 3,860,039 4 Germany 3,652,824 5 France 2,853,062 6 United Kingdom 2,645,593 7 Italy 2,293,008 8 Brazil 1,612,539 9
Among the largest economies Country ranking GDP ( PPP). Source: World Bank (2009) Rank Country GDP (PPP) US$ Mill 1 United States 14,204,322 2 China 7,903,235 3 Japan 4,354,550 4 India 3,388,473 5 Germany 2,925,220 6 Russia 2,288,446 7 United Kingdom 2,176,263 8 France 2,112,426 9 Brazil 1,976,632 10
GDP Comparisons (USD millions) Rio de Janeiro.. 190 M Chile.. 170 M S. Paulo 512 M Argentina.. 328 M Source: World Bank 2008
GDP growth projections 2010
One of the first to recover Brazil was one of the most successful countries in overcoming the crisis. 13
Positive GDP Growth for Brazil 14
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200 INTERNATIONAL RESERVES (US$ billion) Jan 20 US$ 241 170 160 Increase: over 180 billion 150 140 130 120 110 100 Liquidation of Foreign Debt to the IMF 90 80 70 60 mar/06 59,8 50 40 30 sep 03 des 03 mar 04 jun 04 sep 04 des 04 mar 05 jun 05 sep 05 des 05 mar 06 jun 06 sep 06 des 06 mar 07 jun jan 07 20 10 Source: Central Bank of Brazil 16
Reduction of External Vulnerability 17
Total External Net Debt % of GDP * Forecast July 2009 Source: Central Bankof Brazil Produced by: Ministry of Finance 18
Banks Average Return on Equity* From January to June 2009 (%) 19
Active Fiscal Policy Expansion of public investments under the PAC (Growth Acceleration Program), 2007-2010 over US$ 300 billion: -US$ 174 billion in energy -US$ 97 billion in social infrastructure (housing, water sanitation) -US$ 36 billion in logistics (ports, roads, airports, etc) 20
Active Fiscal Policy US$ 57 billion to the Brazilian Development Bank (BNDES) Housing Program: US$ 15.6 billion in housing subsidies and US$ 33.3 billion in investments; 21
Cost of anti-cyclical policies in Brazil was lower than in other countries G20 s s fiscal results (% of GDP) IMF forecasts 22
Job Creation Net of Dismissals (Absolute Change in Thousands) Source: Ministry of Labor (CAGED) Prepared by: Ministry of Finance 23
Unemployment Rate (% of EAP) Source: IBGE/PME Prepared by: Ministry of Finance 24
Reduction of Inequality Brazil-v-US-inequality.png
Lessons from the Crisis Most affected countries: - Countries with deregulated financial markets - Minimum Government, with few state-owned enterprises; - Countries with low economic dynamism, with weak domestic markets, or with markets more dependent on external demand - Countries with unstable fiscal, monetary and external accounts. 26
Lessons from the Crisis Least affected countries: - Countries with more financial regulation and a Government presence in the economy and in social programs; - Countries with state-owned banks and state-owned enterprises in strategic sectors; - Countries with more dynamic economies and with flourishing domestic markets; - Countries with stable growth, controlled fiscal and external accounts and large foreign exchange reserves. 27
Projections for Brazil in 2010 - GDP growth over 5% ( 4% average next five years) -Unemployment 7% - Inflation 4,3% - Foreign reserves over US$ 250 billion - FDI : US$ 35 billion - Trade balance: increase of exports and imports - Exchange rate: 1 US$ = 1, 8 Reais 28
Part II Brazil and Norway: Strengthening Relations 29
Historic Friendship Brazil was among the first countries to recognize the Kingdom of Norway in 1905 Since 19th century, Brazil has grown to become the largest importer of Norwegian dried salted cod fish (bacalao) 30
Mutual prosperity Through trade and services, Brazil and Norway have been contributing to the development and prosperity of each otherʹs society Over one hundred Norwegian companies do business with Brazil, most of them are established in the country (mainly in Rio de Janeiro). 31
2007-2009: 2009: landmark years. High level contacts Visit of PM Stoltenberg to Brazil in 2008 State Visit of President Lula in 2007 State Visit of King Harald to Brazil in 2003 32
Brazilian Ministerial visits: : 2007-2009 2009 - Minister of External Relations, Celso Amorim (February and September 2007) Minister of Development, Industry and Trade, Miguel Jorge (September 2007) Minister of the Environment, Marina Silva (October 2007) Minister of Strategic Affairs, Mangabeira Unger (July 2008) Minister of Justice Tarso Genro (February 2009) - Minister of Fisheries and Aquaculture Altemir Gregolin (March and August 2009) 33
Norwegian Ministerial visits: : 2007-2009 2009 - State Secretary of Fisheries, Vidar Ulriksen (February 2007) - Minister Development, Cooperation and Environment Erik Solheim (November 2007 and September 2008) - Minister of Higher Education and Research Tora Aasland (April 2008 ) - State Secretary, Petroleum and Energy, Liv Stubholt (September 2008) - State Secretary Karl Erik Schott-Pedersen - State Secretary, Ministry of Children and Equality, Kjell Erik Øie (November 2008 ) - - State Secretary, Ministry of Foreign Affairs, Gry Larsen (October 2009) 34
Norwegian official visits 2010 Secretary of Defense Espen Barth Eide (Feb) President Storting Dag Terje Andersen (Apr) Minister of Energy Terje Riis Johansen (Set)
High level business contacts 2007-2009 2009 Besides 14 governmental delegations, a number of High-level business contacts Breakfast of President Lula with Norwegian CEOs and Seminar in Oslo Meeting of Energy Giants CSR Conference in Oslo, participation of Petrobras and CVRD, and Sao Paulo with NHO/FIESP 36
High level business contacts 2007-2009 2009 PM Stoltenberg Seminar in Rio (INTSOK) and Norway s participation in the Rio Oil and Gas Seminar on Biofuels (Nov. 2008), Cosan/Umoe Seminar on Aquaculture and Fisheries (Aqua Nor 2009), Brazilian delegation of 20 businesses Transpetro President in Norway (Ålesund, Stavanger and Oslo) 37
BRAZIL AND NORWAY AGREEMENTS 2007-2009 2009 - Governments - Companies - Business federations - Research institutions 33
GOVERNMENTAL AGREEMENTS MOU on Climate Change and Deforestation (2008) a) Fight against global warming b) Protection of biodiversity and forest preservation c) Enhancement of sustainable development 39
GOVERNMENTAL AGREEMENTS MOU Cooperation in Aquaculture and Fisheries (2009) - investments and economic results - collaboration between research institutions - transfer of technology - sustainable development 40
GOVERNMENTAL AGREEMENTS - Brazil-Norway cooperation in Public Administration in Africa (Angola and Guinea-Bissau) (MRE-MFA) (2008) - Ministry of Knowledge (KD) - Ministry of Education MEC (2008) - Universities - Ministry of Knowledge (KD) - MCT (Ministry of Science and Technology) (2008) Research Institutes - Mutual Assistance in Customs Matters ( Receita Federal and Toll) (2009 conclusion negotiations) 41
AGREEMENTS BETWEEN COMPANIES AND BUSINESS FEDERATIONS Petrobras-StatoilHydro (2007) NHO-CNI (Confederation of Brazilian Industries) (2007) 37
RESEARCH INSTITUTIONS AGREEMENTS - NTNU (Norwegian University of Science and Technology) and PUC-Rio (2008) - CENPES (Petrobras Research Centre) and SINTEF (2008) - NOFIMA (Norwegian Institute of Food, Fisheries and Aquaculture Research and EMBRAPA (Brazilian Agricultural Research Corporation) (2009); - SINTEF and the MPA - Ministry of Fisheries and Aquaculture of Brazil (2009) 38
Trade Brazil-Norway 2008 a) overall trade: US$ 1,5 billion b) exports to Norway: US$ 865 million (33% more than in 2007) c) Norwegian exports to Brazil: US$ 632 million (19% more than 2007): 44
Breaking new records (trade tripled in 5 years) Trade Flow Brazil-Norway USD Million 1500,0 1300,0 1100,0 900,0 700,0 500,0 300,0 100,0-100,0 1496,6 1178,7 932,4 739,5 661,3 546,0 2003 2004 2005 2006 2007 2008 45
Norway became the main destination for Brazilian exports to the Nordic Countries in 2007 and 2008 1 000 900 800 700 600 500 400 300 200 100 0 865 650 634 624 525 441 320 279 Norway Sweden Finland Denmark 2007 2008 46
Brazilian exports to Nordic countries 2009 (USD millions) Brazilian Exports in 2009 - USD Mill 611 312 299 257 132 Norway Sweden Finland Denmark Iceland
Brazil and Norway (Part III) Towards a strategic partnership 48
Emerging energy giants Norway is a large exporter of oil and gas, with declining reserves in the North Sea Brazil is a new frontier for oil exploration and the shipping industry Increasing trade of commodities, oil, gas and biofuels Brazil a key market for Norwegian oil, gas, shipping businesses and off shore services 49
Key areas for partnership 1. Energy sector: New offshore discoveries (StatoilHydro - Peregrino) Seismic research, exploration, FPSOs, transportation, pipelines etc 50
Key areas for strategic partnership 2. Shipping: Brazil is investing in rebuilding its maritime industry Fleet Modernization and Expansion Program, part of the PAC (49 tankers) Transpetro has 26 tankers under construction, 23 new tankers are being put on bid) 51
Key areas for strategic partnership 3. Fertilizers: Norway is one of the world s main fertilizer producers Brazil is an expanding market for chemicals and fertilizers Global demand for increasing food production Yara a large fertilizer producer in Brazil 52
Key areas for partnership 4. Environmental sustainable projects: BR Biofuels Combat deforestation N Solar energy CO2 Capture Environment friendly transportation 5. Aquaculture and Fisheries 53
Convergence of interests to face global challenges - Environment and climate change - Energy Security (including transportation) - Food Security - Millennium Development Goals Peace and Reconciliation 54
Ports and Shipping Brazil has 34 public sea ports and 45 public and private river ports. Petrobras has 47 maritime terminals operated by Transpetro.
3) For the 2010-2014, transport and communications sector is expected to outpace the economy. Analists believe it will achieve average annual growth of 4.2%, versus 3.9% for overall GDP. Ports and shipping 1) Brazil's ports are in need of US$23 bn worth of investment to upgrade capacity and meet significant long term growth forecast for the sector 2) Trade will continue to expand rapidly in coming years
Ports and Shipping 4) The total value of transport and communications GDP will rise to US$145bn in nominal terms by 2013, representing 5.4% of Brazil's GDP. 5) The transport and communications sector employed 5 M people, or 5.0% of the labour force, in 2009. These figures are expected to rise to 6.18 M and 5.5% by 2014.
Ports and shipping 6) Investing in Brazil's port sector is an ongoing priority in the country. 7) According to conservative sources, total traffic carried by Brazilian shipping will rise by an average of 8.1% per annum from 2010 to 2014, compared to 7.7% registered in the preceding five years.
Welcome Norwegian companies are invited to come to Brazil and examine opportunities created by ever dinamic energy, shipping and maritime sectors.
Brazil Norway Chamber of Commerce www.brazilchamber.no
Tusen Takk! Embassy of Brazil www.embrasil.no Tlf. + 47 22 54 07 35 or 36 Fax: + 47 22 44 39 64 brasil@brasil.no secom@brasil.no (Commercial Section) 63