XVI Committee Meeting of Economic Cooperation Brazil-Japan ECONOMIC SITUATION & PERSPECTIVES

1. XVI Committee Meeting of Economic Cooperation Brazil-Japan ECONOMIC SITUATION & PERSPECTIVES José Augusto Coelho Fernandes Confederação Nacional da Indústria

2. AGENDA • Economicenvironment • Industrytrends • Investmentprojections • Challenges • Strategicmapofindustry

3. AGENDA • Economicenvironment • Industrytrends • Investmentprojections • Challenges • Strategicmapofindustry

4. Economic environment Economic recovery is under way Source: IBGE

5. Economic environment Growth composition improvement Bettercontributionfrominvestments in GDP growth Source: IBGE

6. Economic environment Inflation pressure is decreasing Source: IBGE

7. Economic environment New pattern for the exchange rate Lehman Brothers 49,9% valuation 49,8% devaluation Source: Brazilian Central Bank

8. AGENDA • Economic environment • Industrytrends • Investmentprojections • Challenges • Strategicmapofindustry

9. Industrytrends Production with volatility Source: IBGE

10. Industrytrends Industry operates with idleness Above usual idleness Below usual Source: CNI Valuesabove 50 pointsindicatecapacityutilizationabove usual for thatmonth. Valuesbelow 50 pointsindicatecapacityutilizationbelow usual for thatmonth

11. Industrytrends Industry confidence on the rise again Optimism Pessimism Source: CNI

12. AGENDA • Economic environment • Industrytrends • Investment projections • Challenges • Strategicmapofindustry

13. Investmentprojections Investments estimates for 2011-2014 Source: BNDES

14. AGENDA • Economic environment • Industrytrends • Investment projections • Challenges • Strategicmapofindustry

15. Challenges Challenges to increase competitiveness Tax Infrastructure Education Innovation Labor

16. AGENDA • Economic environment • Industrytrends • Investment projections • Challenges • Strategicmapofindustry • CNI estimates

17. Strategic map of industry COMPETITIVENESS WITH SUSTAINABILITY • Institutional environment and incentives for innovation • Technological consult. services • Business management • Macro-economic environment Innovation and Productivity Market Development • Access to markets • Internationalization • Global value chains • Sectoral policies • Regional development • Stability and predictability • Investment rate • Financing • Labor relations • Bank credit • Stock market • Micro, small and • medium enterprises • Modernization of labor relations • Labor costs • Legal security and Red Tape Government Efficiency • Predictability of rules • Court efficiency • Red Tape reduction • Environmental licensing • Management of public spending • Infrastructure • Taxation • Taxload • Elimination of burdens on investments and exports • Simplification and transparency • Transportation logistics • Energy • Telecommunications • Sanitation • Education • Technical and vocational education and training (TVET) • Basic education • Training of engineers and technologists Source: CNI

18. AGENDA • Economic environment • Industrytrends • Investment projections • Challenges • Strategicmapofindustry • CNI estimates

19. CNI estimates

20. XVI Committee Meeting of Economic Cooperation Brazil-Japan ECONOMIC SITUATION & PERSPECTIVES José Augusto Coelho Fernandes Confederação Nacional da Indústria