Rio de Janeiro – Support to export, with the main item being financing, is an alternative for Brazilian and Latin American export companies to overcome the international financial crisis. This is the opinion of the president of the Business Council of Latin America (Ceal) in Brazil, Marcus Vinicius Pratini de Moraes, former minister of Agriculture.
The Ceal should promote, in Rio de Janeiro, the first meeting of the Brazilian central board, which should include 50 representatives from 12 countries. The two-day meeting begins on Wednesday (16). To Pratini, in Latin America, the export sector is the one most affected by the crisis.
The objective of the meeting, according to Pratini, is to "align the points of view of different countries that are members of the Ceal with regard to corrective measures to reduce the impact of the financial crisis on our economies. And also to seek a common discourse in the defence of the interests of the region."
One of the themes to be discussed at the meeting is how to improve the export financing mechanisms and to reduce the cost. Pratini recalled the support granted to the sector by the Brazilian Development Bank (BNDES) and the Bank of Brazil, but also pointed out that it is possible to expand participation of private banks in the process. These banks may act, according to the former minister, in cooperation with public institutions that have the same finality.
"The most efficient means for leaving a moment of stagnation or of reduction of business is through foreign trade. The expansion and development of foreign trade is the fastest mechanism to escape any economic crisis as it is the one that fastest generates jobs and turnover of the domestic economy and also that of other countries," he said.
According to Pratini, the general expectations are for global trade to drop between 8% and 10% this year, rates considered high. For Brazil, the estimate is for exports to remain at the same level of the volume exported last year, or even for them to drop by around 5% due to prices practiced on the international market. In the case of imports, the expectation is for a reduction of between 10% and 15%.
Last year, exports from Brazil totalled US$ 197.7 billion, growth of 23.2% over the previous year. On analysing the results for the last months of 2008 and the results of the first quarter of 2009, Pratini pointed out a very great reduction in imports and a smaller reduction in exports.
The trade balance of Brazil is still "favourable", according to the former minister, as two thirds of exports from Brazil are raw materials (commodities). "The world needs them, mainly in the area of agribusiness," he said. The trade surplus of Brazil last year was US$ 3.012 billion.
*Translated by Mark Ament
