São Paulo – The crisis in Europe should benefit Brazil’s exports of manufactured products and those of emerging nations in general, as they may find market niches abandoned by European producers in difficulties. To gain this share, however, it is necessary for Brazil to invest in the area, said specialists in seminar "The crisis of developed nations and perspectives for the Brazilian economy in 2012", promoted by the Centre for Company and School Integration (CIEE), on Thursday (19), in São Paulo.
The speakers criticised the Brazilian dependence on commodity exports and said the country needs to grow in the international manufactured product sector. “Over the last five years, the deficit in greater value-added industrial products has grown five-fold and, as a tendency, that is evidently unsustainable, as we will not be able to pay this bill with basic products, which generate little added value, in future. Brazil, due to its potential, may be very strong in primary products, but not abandoning industrialisation,” said Antônio Correa de Lacerda, a professor at the Pontifical Catholic University of São Paulo (PUC-SP) and chief economist at Siemens.
The growth of imports of manufactured products was pointed out as a bottleneck of the Brazilian economy. “It is great for Brazil to increase its exports, but this phenomenon is being predatory,” said Octavio Barros, a director at the Research and Economic Studies department at Bradesco bank. He believes that the concentration in the sale of primary products is affecting investment in industrial production in the country.
"In 2011, Brazil had a US$ 80 billion deficit in its electronic, chemical and pharmaceutical and machinery product trade balance," recalled Lacerda. "Brazil needs to expand its conditions for competitiveness. We need to reduce interest on the international level, and I think we are heading in that direction,” said the professor at PUC.
"We need more competitive trade and need to improve the Brazilian production cost regarding factors that are outside the factory, like tax burden and logistics and infrastructure cost. That is what may generate, alongside trade promotion of Brazilian products abroad, and stronger operation of Brazilian companies in international forums, a greater share for our companies in the foreign market,” said Lacerda.
The specialist also pointed out the opportunities that may be opened with the cooling down of the economies of developed nations. “Brazil has a chance to make use of its natural market attractiveness to receive new companies, but it must take care to avoid opportunist investment that does not add value,” he said.
Investment
The crisis in Europe has also put emerging markets, like Brazil, in greater evidence as destinations for investment. "Emerging countries are prominent. Today they receive 60% of global investment,” pointed out Barros. In the economist’s point of view, the European crisis is already becoming lighter. "The global scenery is less tense than four months ago. The European crisis in is inexorable, but nine out of 10 analysts recognise that it is brander than expected.”
Regarding Brazil, Barros believes that the country’s Gross Domestic Product (GDP) is under-estimated. In the economist’s forecast, the country may grow between 4.2% and 5.2% a year from 2012 to 2020. This week, the International Monetary Fund (IMF) disclosed a report in which it forecasts 3% growth of Brazil’s GDP in 2012.
Roberto Van Dijk, the director general of Votorantim Wealth Management, also pointed out the growth emerging economies this year. "In 2012, the sum of the GDPs of the emerging nations should exceed the sum of the GDPs of developed nations,” he pointed out.
*Translated by Mark Ament
