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Recte Rempublicam Gerere Gerindo a coisa pública
corretamente Proper Management of the Public Good
BRAZIL 2009 Response to the World
Crisis and Growth Prospects Brazil- US Business
Council XXVIII Plenary Meeting Joaquim Vieira
Ferreira Levy Secretaria de Fazenda Estado do Rio
de Janeiro
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Brazils fundamental sources of strength
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Credibility in Policies
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Diversity in Trade
Main Exports
Trade surplus
Transp Equip
Steel
Chemicals
Machinery
Main Partners
Other
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Sound Net External Position
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with favorable structural features
Energy Independence
An attractive open capital market Foreign
Participation in Stock and Fixed Income markets
Oil demand/production
Small External Obligations Interest
Payments/Exports
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Fiscal Cushion
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Room for monetary policy
Market Value of Banks
USA
Real Interest Rates still gt 5
Inflation-indexed NTN B bond yield
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and positive political dynamics
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

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That helped support a strong domestic market
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2008-09 Integrated Policy Response
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Cost of Measures
Budgetary Cost of Fiscal Stimulus 2009-2001 of
GDP
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Lingering Issues
Real Exchange Rates (R against a 15 currency
basket)
Public Wages (as of GDP)
Net Public Debt (as of GDP)

• Remaining unbalances in Global Markets have put
  undue pressure on the Real
• Fiscal commitments and appreciation of the
  currency have put pressure on the public debt

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Jan 2007 Nov 2008 May 2009
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Good institutions and stability allow Brazil to
invest in our main asset people
Secondary education is becoming universal in
Brazil, and higher education enrolment is growing
at two digits, with 6 million students in
2008 Number of scientific/academic papers is at
historic high (ahead of Russia) But we need to do
more!
Highest academic attainment ( of cohort)
School enrollment by age ( of bracket)
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Welcome to Rio de Janeiro
Rio de Janeiro, Political and Financial Center
A P40 oil plataform joining the oil province
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PROJAC hallmark of the entretainement industry
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Rio is a world class economy
With a US 200 billion GDP, the state has a
diversified and open economy
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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
• Insurance/Reinssurance entrants (Lloydss) and
  IRB
• Asset management funds
• And soon, China Dev Bank...

• 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)

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Oil one more factor to Rios 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
• More than half of the likely 50 billion barrels
  of oil reserve of Pre-Sal are offshore Rio

Fiscal Accounts of State of Rio de Janeiro
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Magnitude of new discoveries
Pre-sal may translate in reserves of 50-80
billion barrels of oil. (just below
Russia) Doubling production to 4 mm barrels a
day (1,5 billion a year), that would mean at
least 30 more years of reserves 4 mm bb/day
means US 70 x 1,5b US 100 billion a year of
value
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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
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Rio de Janeiro top business platform
Ore and other mineral rich areas (MG)

• 2nd largest producer of steel in Brazil (with
  Thyssen/Vale)
• Strong Auto/bus/ truck industry
• Leader in Pharma Ind.

• Self sufficient in electricity
• Sole producer of Nuclear Power in Brazil
• Leader in shipyards and off shore industries

Manufacturing and oil industry
PORT of AÇU
OIL FIELDS
PORT of ITAGUAI
50 miles
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Porto do Açu is coming
A partnership with Anglo American Future Home of
Wuhan Steel Industries in Brazil
Planned site for a 4,000 MW coal/gas plant Ready
to host manufacturing and electronic industries
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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
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2007
Olympic games will foster confidence and focus
public policy, setting deadlines
2009
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MANGUINHOS
IMPACT AND COST OF THE 2016 GAMES
Public Investment linked to the event
Private investment because city and state are
changing
Other infra structure investments
(transportation, sanitation, security (R 20
billion)
EVENT
Venues (stadium, villages)
Private investment related to the event
(advertising, villages, etc.)
2011 Jogos da Paz 2013 Copa das
Federações 2014 Copa da FIFA 2016 Jogos
Olímpicos
PORT of RIO
Investments related to oil, energy, steel,
petrochemicals, manufacturing amount to more than
US 50 billion in the next six years
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Cost of the event
It may turn a profit
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Deodoro Tiro/Equitação/Canoagem Um importante
legado urbano
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CHANGING TRANSPORTATION AT HIGH SPEED
DEODORO
Metro trens
BRT 7
BRT 5
MARACANA
BARRA
BRT 1 METRO IV
State INVESTING HEAVILY IN TRAINS (with World
Bank and other partners) RENEWED concession with
the subway doubling capacity in three
years) City Special lane buses -BRT 5 , BRT 7
and single ticket to lower transportation
costs Federal Gov. PAC of mobility new model
for airports
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The partnership between state, city and the
federal government is working well The UPP
experience has been a success
Freedom to move around and security at home
fundamental rights of EVERY citizen
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Hospitality Industry and Real Estate Creation of
about 20,000 rooms Renovation of the Port Area
(5 sq miles) Airport for 30 million pass/year
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This is becoming a reality
CEPAC already approved by City Council
1ª Fase reforma do entorno da Praça Mauá e
abertura da Faria Lima sur mer
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Thank you !
Obrigado Thank You
Rio de Janeiro, o melhor lugar para
trabalhar Rio de Janeiro, the best place to
work Gabfazenda_at_fazenda.rj.gov.br
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