Brazil and Norway: A Strengthening Partnership

1. Brazil and Norway:A Strengthening Partnership Ambassador Sergio E. Moreira Lima Stavanger, June 5th, 2008

2. Plan I - Brazil: sustainable economic growth with reduction of inequalities II - Brazil-Norway: strengthening relations III - Towards a strategic partnership

3. Part I Brazil: sustainable economic growth with reduction of inequalities

4. Among the largest economies

6. A New Cycle of Sustainable Economic Growth • Expansion of the domestic market • Increased industrial and agricultural output • Growth in foreign trade with diversified markets and increased participation of value-added goods • Large inflows of foreign direct investment • Better wealth distribution • Decrease in poverty • Creation of jobs

9. (US$ billion) INTERNATIONAL RESERVES MAY.08 > 200 200 170 Increase: over 140 billion 160 150 140 130 120 110 Liquidation of Foreign Debt to the IMF 100 90 80 70 mar/06 59,8 60 50 40 30 sep des mar jun sep des mar jun sep des mar jun sep des mar jun MAY 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 08 Source: Central Bank of Brazil

11. Reduction in Income InequalityGini coefficient Household income Source: PNAD/IBGE.

12. Decrease in Poverty Source: FGV/PNAD/IBGE.

13. A New Middle Class “A new middle class is emerging almost overnight in Brazil.  During 2000 and 2005, the number of families with annual income between US$ 5.900 and US$ 22.000 has grown 50%, from 14,5 million to 22,3 million, while the number of those who received less than US$ 3.000/year has been abruptly reduced to 1,3 million.” The Economist, August 18 – 24, 2007

16. January 2007: Government launched new 4-year programme for growth • The PAC (“Programa de Aceleração do Crescimento”), based on • investments of US$ 236 billion • Objectives: • Infrastructure: ports, roads, electricity, water, sanitation and housing. • Stimulate credit and financing • Improve investment conditions • More efficient Tax System • Reduction of regional and social inequalities PAC – Program for Accelerated Growth

17. Rate at 31.12.2007: 1 US$ = 1,78 R$ Source: Central Bank of Brazil

18. Part II Brazil-Norway strengthening relations

19. A 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) • Through this trade, Brazil has contributed to the development and prosperity of Norway

20. 2007: a historic year in bilateral relations • State Visit of President Lula, September • First of a Brazilian Head of State to Norway • Follow-up of King Harald’s Visit to Brazil in 2003

21. Ministerial exchanges 2007-2008 Brazilian side: - 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)

22. Ministerial exchanges 2007-2008 Norwegian side: • State Secretary of Fisheries, Vidar Ulriksen (February 2007) - Minister Development, Cooperation and Environment Erik Solheim (November 2007) • Minister of Higher Education and Research Tora Aasland (April 2008 )

23. High level business contacts 2007-2008 • Besides 14 governmental delegations, a number of High-level business contacts • Seminar Meeting of Energy Giants´ • CSR Conference in Oslo, participation of Petrobras and CVRD • Brazil Seminar in Bergen, Breakfast of President Lula with Norwegian (CEOs)

24. Planned Visits: • Visit of Prime Minister Jens Stoltenberg to Brazil (September 2008) • Visit of Minister Åslaug Haga to Rio Oil & Gas (September 2008) • NHO CEO Finn Bergesen jr. and LO General Director Roar Flåthen (August 2008) • Minister of Foreign Affairs Jonas Gahr Støre (2009) • President of the Storting Thorbjørn Jagland (2009)

25. Trade flow reached a new record in 2007 but can triple in the next couple of years.

26. Trade Flow Brazil-Norway • Exports from Brazil to Norway increased 29,8% in the first quarter of 2008 in relation to same period last year (US$ 221,2 million) • Change in the composition of trade, towards more added-value products (compressors and pipelines) • Main products exported by Brazil: alumina, compressors, soybeans and pipelines for the offshore industry. • Dried salted fish (bacalao) continued to be the main item exported by Norway. Exports also include machinery and radio navigation equipment.

27. Norway became the main destination for Brazilian exports to Scandinavia in 2006 and 2007

28. Norways tops Scandinavian investment in Brazil

29. Part III Towards a stategic partnership

30. Agreements Signed 2007/2008 • Between companies (Petrobras-Statoil) • Between business federations (NHO-CNI) • Between Research institutions: • NTNU and PUC-Rio • Research Centre of Petrobras (CENPES) and SINTEF • Between governments: • Brazil-Norway cooperation in Africa (Angola and Guinea-Bissau) • KD (Ministry of Knowledge) - MEC (Ministry of Education and Culture) - MCT (Ministry of Science and Technology)

31. Agreements in Negotiation • Environmental Cooperation • Legal Matters

32. Possible EFTA/Mercosul Agreement • Joint Declarations on Co-operation signed in December 2000 • Free trade agreement would represent an important boost to commercial exchanges

33. Emerging energy giants • In the last 20 years, Norway has become one of the largest exporters of oil and gas • Brazil evolved from a highly energy dependent country into oil self-sufficiency and a major biofuels producer • Recent offshore discoveries make Brazil a key market for Norwegian oil and gas businesses

34. Key areas for strategic partnership 1. Energy sector: • New offshore discoveries (Tupi, Sugar Loaf) • Seismic research, exploration, FPSOs, transportation, pipelines etc

35. Key areas for strategic partnership 2. Shipping: • Brazil is investing in rebuilding its maritime sector • Norway is a major shipping nation • Brazil is a growing market for maritime equipment services • Increasing Petrobras oil & gas production capacity • Transpetro: bidding for 26 tankers (from a total of 42 - Programa de Modernização e Expansão da Frota)

36. Key areas for strategic partnership 3. Fertilizers: • Norway is one of the world’s main fertilizer producers • As an agricultural giant, Brazil is an expanding market for chemicals and fertilizers • Global need for increase in food production 4. Environmental sustainable projects: BR Biofuels N Solar energy Combat deforestation CO2 Capture

37. A potential strategic partnership Convergence of interest in those important areas is transforming Brazil-Norway relations into a more “strategic partnership”

38. ”I come to Norway convinced that the present moment opens up new and important opportunities. One of them results from a lasting cycle of sustainable growth in Brazil”President Luiz Inácio Lula da Silva(State Visit to Norway, September 13, 2007)

39. Thank you ! • Embassy of Brazil • www.brasil.no • Tlf. + 47 22 54 07 35 or 36 Fax: + 47 22 44 39 64 •   brasil@brasil.no • secom@brasil.no (Commercial Section)