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Brazil’s Growing Role in the Global Economy

Brazil’s Growing Role in the Global Economy. Thack Brown Amcham Board Member São Paulo, october 26th 2007. History.

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Brazil’s Growing Role in the Global Economy

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  1. Brazil’s Growing Role in the Global Economy Thack Brown Amcham Board Member São Paulo, october 26th 2007

  2. History • The Amcham Brazil was founded in 1919 by 18 American and Brazilian businessman with the commun interest of developing the trade betwen the US and Brazil. That small group of founders included: • General Electric • Singer Sewing Machine Company • Mackenzie College • Citibank • Brazil Land and Cattle Packing Company.

  3. Institutional Facts Largest Amcham outside the US Non-subsidized Politically Independent 6.800 members Largest multisector entity in Latin America Chairman of the Board – Alexandre Silva

  4. Mission Trainning

  5. Regional Units

  6. Our Members Capital Origin Sectors Commerce Construbusiness 5% Finance 5% 10% 3% 7% Technology 6% 85% Services Industrial 63% 16% Brazil USA Others Large companies (over 500 employees) 5% Medium-sized companies (from 51 to 500 employees) 19% Small companies (from 1 to 50 employees) 76%

  7. The world is facing a changing paradigm Source: Goldman Sachs and LBS (Scott)

  8. Declining Interest Rates • - process initiated on september 2005 – 18 consecutives cuts • small reduction due to inflationary pressures on maintenance • inflation under controll – IGPM2 = 1,29 / IPCA = 0,18 / INPC = 0,25 Source: BACENBR and HSBC – sep/2007

  9. Increasing Foreign Investment & Improving FX and Foreign Reserves • Foreign Reserves • Sep ’07 – USD 163B • Dec ’06 – USD 86B • Dec ’05 – USD 54B • IPO’s • 2007 YTD USD 21.1B vs. • 2006 YTD USD 5.7 B • FX Rate – Real vs. Dollar • Sep ’07 +/- 1.85 R$/USD • Sep ’06 +/- 2.20 R$/USD • Sep ’05 +/- 2.80 R$/USD Source: Dealogic, Thomson Financial, Ernest & Young – Global IPO Trends Report 2007

  10. Approaching Investment Grade Brazil rate evolution from the international rating agencies Source: IPEA, Fitch, Moody´s and S&P

  11. Infrastructure Private Investment Attractiveness Index in L.A. (IPIAI) Most Attractive: Chile, Brazil and Colombia Least Attractive: Venezuela, Bolivia and Dominican Rep. WEF: first index analysing the investment environment for infrastructure Source: WEF “Latin America: Benchmarking National Attractiveness for Private Investment in Infrastructure” – 2007

  12. Country Risk Assessment Brazil overview Source: OND/NDD – Oct/2007

  13. Competitiveness Micro factors: well positioned within BRICM... Ranking (2006) “Business Competitiveness Index” (Relative Ranking) Best Relative Ranking 27th 55th 57th 64th 79th Worst Relative Ranking Source: World Economic Forum – GCI 2006

  14. On a Macro Level, Brazil has been losing competitiveness Ranking (2006) “Global Competitiveness Index” (Relative Rankings) 43rd Best Relative Ranking 54th 58th 62nd 66th Worst Relative Ranking Source: World Economic Forum – GCI 2006

  15. Priorities for a Better Business Environment

  16. Intelectual Property Rights – stronger INPI Deposits Concessions, denials and others Concessions and filings 2006 – Amcham´s proposition was accepted by the Congress regarding the contracting of 400 new examiners to the INPI (backlog reduction) Source: iNPI

  17. In Summary • Improved macroeconomic conditions  long term investment destination • Brazil´s influence on the world´s economy continues to grow • Fundamental underlying changes to Brazil’s business environment are positioning the country to be a serious long term player in the global economy • Macro level: barriers are well-known, need of joint work comunication channel between private and public sector to continue growth

  18. Thank you! AMCHAM WWW.AMCHAM.COM.BR

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