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RIO WITH ITS EYES ON THE PRIZE 2016 Summer Olympic Games FIRJAN NY BREAKFAST

Recte Rempublicam Gerere Gerindo a coisa pública corretamente Proper Management of the Public Good. RIO WITH ITS EYES ON THE PRIZE 2016 Summer Olympic Games FIRJAN NY BREAKFAST Joaquim Vieira Ferreira Levy Secretaria de Fazenda October 2009. Brazil’s fundamental sources of strength.

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RIO WITH ITS EYES ON THE PRIZE 2016 Summer Olympic Games FIRJAN NY BREAKFAST

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  1. Recte Rempublicam Gerere Gerindo a coisa pública corretamente Proper Management of the Public Good RIO WITH ITS EYES ON THE PRIZE 2016 Summer Olympic Games FIRJAN NY BREAKFAST Joaquim Vieira Ferreira Levy Secretaria de Fazenda October 2009

  2. Brazil’s fundamental sources of strength • 20+ years of regular elections • 20 years of trade liberalization • 15 years of price stability • 10 years of fiscal targets, established after deep fiscal restructuring at all levels of government • Strong banks, with high capitalization and credible supervision • Innovative social policies, with more jobs and education

  3. Credibility in Policies CPI – Target zones and actual realization

  4. Diversity in Trade Main Exports Trade surplus Tranps Equip Steel Chemicals Machinery Main Partners Other

  5. Sound Net External Position External Debt and Ratings External Debt as % of GDP Risk Premium and X rate Climbing the rating ladder

  6. A strong domestic market Auto production and sales Investment Wages and inflation Domestic Credit

  7. Also helped by an active fiscal policy Fiscal Balance % GDP Fiscal strength has allowed the government to move ahead with investment plans • PAC – National Program to Accelerate Growth is helping public investment since 2007 PAC will inject R$ 600+ billion in federal, public enterprises and subnational projects B R AS I L

  8. Fiscal can still provide a cushion 12-month Primary and Nominal Consolidated Fiscal Balance as % of GPD Ext. public debt & Reserves primary Net public debt/GDP nominal Structural surplus by States and Municipalities

  9. There is a large monetary cushion Real Interest Rates above 5% Inflation-indexed NTN B bond yield

  10. … and an external cushion, Energy Independence Oil demand/production A hot open capital market Foreign Participation in Stock and Fixed Income markets Small External Obligations Interest Payments/Exports

  11. … as well as a political cushion: Stability breeds a new environment • Economic stability in Brazil has allowed people, firms, and government to focus on micro issues, putting a premium on service delivery and management issues • subnational governments are responding to the new environment in the same way companies did in the 1990s when competition and stability forced them to change the way they operated and improve the services they delivered. • currently, there is a healthy competition among subnational governments – good managers have been rewarded by winning elections and attracting new private investment to their states • the federal government relies on states to conduct the PAC

  12. Vista Chinesa RI0 • Recent changes at subnational level are best illustrated by the turn around of Rio de Janeiro

  13. Rio is a world class economy With a US$ 200 billion GDP, the state has a diversified and open economy 13

  14. Oil: one more factor to Rio´s energy • Rio produces 80% of Brazilian oil (1,7 mm bbl/day) and is where the PRE-SAL Tupy field is located • A 50+ US$ billion investment portfolio unaffected by crisis • Oil revenues channeled to pension & environment protection funds • Government focus is on service delivery, including improved personal and business security Fiscal Accounts of State of Rio de Janeiro

  15. Rio: strong in knowledge and financial services • Securities Exchange Regulator • Insurance Regulator • Central Bank open market desk and self regulation financial institutions • Brazil Development Bank • Major Pension Funds (Petros, Previ, Eletros) • Insurance/Reinssurance entrants (Lloyds´s) and IRB • Asset management funds • FioCruz (Pharm, Health) • Cenpes (oil-gas) • IMPA (math) • CBPF (Physics) • National Science Academy • ½ million college students • Leading schools of economics • Headquaters of largest telecomm companies (Oi-telemar, Embratel)

  16. Rio de Janeiro: prime logistic platform 70% of Brazil s GDP is within 500 mls Nuclear Sub Shipyard Nuclear Angra Plant BR 040 BR 116 Bahia Airport Old Refinery COMPERJ Dutra Arco Rodoviário-road Beltway Porto do Açu PORT (Itaguai) and Thyssen mill PORT of Rio

  17. Goals of current administration • Overhauling public finances pays for: • Rail service that gives people comfort and mobility to work, while reducing gas emission • New plants that are changing the sanitation landscape and cleaning the Guanabara Bay • New health care facilities and working positions • Straightforward security policies • All PAC counterparts and more Sanitation Plant of Alegria – concluded in late 2008, after 12 years of construction

  18. 2007 Olympic games will foster confidence and focus public policy, setting deadlines 2009

  19. … and now on…

  20. Thank you ! Obrigado Thank You Rio de Janeiro, o melhor lugar para trabalhar Rio de Janeiro, the best place to work Gabfazenda@fazenda.rj.gov.br 25

  21. Thank you Teresópolis Niterói Campos Costa Verde Sefaz/RJ – excelência de serviços

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