Alexandre Rocha
São Paulo – Ahead of a ministry whose main objectives are the formulation and conduction of integrated domestic development and regional development programs, national integration minister Ciro Gomes believes that president Luiz Inácio Lula da Silva is on the right track to transforming the country into "a great center of attraction to foreign investment ", also from Arab countries.
In an e-mail interview to ANBA, minister Ciro said that the Public-Private Partnership (PPP) project was designed by the federal government to guarantee minimum profitability to investors, "mainly to those in areas where financial and economic return is slow, low, or not very profitable". The proposal still needs to be approved by Congress.
The PPP, when approved, will regulate associations between public and private sectors for the financing of projects, mainly in infrastructure. It forecasts, among other topics, hypothetical situations in which these partnerships will be possible, and guarantees minimum profitability to the investors, like a subsidy.
An economist, former governor and former finance minister, Ciro Gomes believes that the PPP, together with adequate regulating agencies and macroeconomical equilibrium, "that has been promoted by the government", will be the basis to guarantee the attraction of private foreign investment. The federal government wants to analyze the regulating agencies for various sectors, such as electric energy, telecommunications, water supply and sanitation, among others. The part played by regulating agencies has not yet been defined.
Ciro added that the various ministries will "raise the curtain" and show their main projects in events for foreign investors, including Arab investors, in which opportunities offered by Brazil will be shown.
In the specific case of his ministry, Ciro Gomes said that foreign capital participation will be "useful and welcome" in projects developed by the Superintendency for the Development of the Northeast (Sudene) and of the Amazon (Sudam), recently reestablished, after having been closed by the administration of former president Fernando Henrique Cardoso, due to a series of corruption charges. "Investment opportunities will not be lacking", stated the minister. Below, the interview:
ANBA – With the recreation of Sudam and Sudene (the Superintendency for the Development of the Amazon, and of the Northeast, respectively), and keeping in mind limited public funds, is it possible to collect foreign investment for regional projects?
Ciro Gomes – The new Sudam and Sudene are being born with important missions: the creation of representative social forces in their respective regions to promote sustainable and including development. In this task, a very challenging one, foreign capital (productive, and not speculative capital) will always be useful and welcome, as long as it is in accord with the regional development plans. I would like to make it clear that investment opportunities will not be lacking.
In what way can this be done?
Through fiscal and credit instruments, some still to be created, and others modernized, and through the implementation of new institutions for regional development.
Is it possible to guarantee any sort of profitability so as to attract international or private capital, or would this financing have to be through entities such as the Inter-American Development Bank (IDB) and the World Bank (IBRD)?
The government is preparing the new PPP model, attempting to make investment in infrastructure possible. Apart from that, regulating agencies for critical areas (the electric sector, water supply, irrigation, etc.) are being modified to attract private investment. That means that we are evolving in a more independent direction from traditional foreign financing, guaranteeing greater flexibility and resource availability.
President Luiz Inácio Lula da Silva has been saying that he would like to attract foreign investment for infrastructure and for the construction of sanitation. Do you, as an economist and former governor, consider such ventures attractive to foreign investors?
The new PPP model forecasts mechanisms to guarantee investors minimum profitability, especially in those sectors where economic and financial return is slow, low or small. In this way it will be possible to overcome economic and financial logic, mainly in the infrastructure and sanitation sectors.
In your opinion, what are the main priorities in Brazil today?
Analyzing regional development, I would surely say that the connection of the São Francisco and Tocantins river basins, the conclusion of the Transnordestina railway (a railway connecting Northeastern states) and the paving of the BR-163 highway that connects Cuiabá (capital of the center-western state of Mato Grosso) to Santarém (on the Tapajós river, tributary to the Amazon river, in the state of Pará) are the most important projects.
After the terrorist attacks of September 11, 2001 in New York and Washington, Arab investors took a lot of money out of the United States. Estimated figures are around US$ 300 billion. Various countries are after these funds, such as Russia, which is trying to collect US$ 60 billion from Saudi Arabia for application in its energy sector. In the case of Sudam, and Sudene, and of other ministry operations, such as infrastructure projects in general, how could Brazil try to attract part of this Arab capital?
Making regulating agencies adequate, approval of the PPP, together with the macroeconomical equilibrium (fiscal, monetary and exchange), that has been practiced by the government will create the basis for Brazil to, in a near future, be one of the greatest investment attraction centers – not for the predatory investment of recent years, but for development partners.
Do you know if there is any movement in the government that is focused at trying to collect some of these Arab funds?
The government is prepared for a series of events in which ministries will show their projects and main priorities that are perfectly open to foreign financing resources. The idea is to promote events, not only here but abroad, showing foreign investors the opportunities that are open to their capital.
