‘Brazil presents great opportunities to the foreign investor’

The Federation of Industries of the State of São Paulo, FIESP, is the largest professional body in Brazilian industry. A catalyst for cultural and commercial exchanges with countries all around the world, the organization does not limit its efforts to São Paulo state alone, but aims to turn the nation into a great global economic power. It acts as the sounding board for 132 business associations and representing companies of all sectors, sizes and regions across the country.

FIESP has nine thematic boards, coordinated by the Roberto Simonsen Institute (IRS), which draw-up guidelines covering various national departments: economic research and studies, international relations and foreign trade, infrastructure, environment, competitiveness and technology, and the department of small and medium enterprises (SMEs).

Represented by 51 regional offices across the state, FIESP has also created committees for São Paulo’s main industrial sectors: food and agribusiness, construction, mining, leather and footwear, textiles and garments, and the defense industry. There is also a committee of Young Entrepreneurs, Cultural Action and Social Responsibility.

At the helm of the federation is its president Paulo Skaf, who here outlines some of the competitive advantages for international investors casting an eye over the state’s prospects.

How attractive is Brazil for international investment?

Nowadays, Brazil presents great opportunities to the foreign investor in the area of infrastructure for example, as there are many needs. We have a growth acceleration program called PAC that allows for investment in roads, railways, ports and airports. These are great opportunities for Brazilian and foreign companies.

In addition, there will be big events such as the World Cup and the Olympics, which require more than what Brazil would ordinarily need. In the area of infrastructure, the opportunities are very big.  
 

 Brazil is highly competitive in agribusiness, the food industry, and in the manufacturing sector. It occupies half the territory of South America, with 8,500,000 km2. We have oil and gas industries and opportunities now with the pre-salt oil exploration project, involving oil reserves of excellent quality; and we have technology.

There are many things to improve in Brazil: infrastructure, adjustments in economic policy so as to really avoid distortions, structural reforms, tax reforms, labor reform, reforms to modernize the system and work in Brazil.    

In this sense, there are challenges but Brazil is unquestionably a great opportunity, a country with much space, a good and talented population and with many areas of natural competitiveness.  

What gives São Paulo the edge over other states?

FIESP represents more than 100,000 companies in the state of São Paulo. But São Paulo has one characteristic: the headquarters of companies from other states – the reins of the companies – are here, as well as the industries that are based here.
Take the example of the first vice-president of FIESP: his major investment is the national metallurgical company CSN in Rio de Janeiro, but he and the headquarters are in São Paulo. FIESP and São Paulo have this characteristic: we think in terms of the country, especially because the country always comes first. We think firstly in terms of Brazil and then São Paulo. In our case, this is even slightly more so because almost all our directors, advisors, and the companies that come here have investments all over Brazil.

São Paulo needs to think in terms of the country and so does FIESP because it concentrates 42% of industrial GDP here in the state, and another 40% whose units and factories are in other states have their reins held here. So, we think in terms of the country.

São Paulo is the state with the best infrastructure in the country, in all aspects: the best roads, railways, airports and the best port. The port of Santos oversees a third of Brazil’s international trade.

In terms of innovation, technology, environmental concerns, education and health, São Paulo is where you find the best conditions. São Paulo distinguishes itself through: being a state with 41 million inhabitants; having a budget of R$170 billion (US$108 billion), therefore larger than that of Argentina; having the great city of São Paulo with its 11 million inhabitants and very good roads. A lot remains to be done but infrastructure already exists; there is a very positive foundation in São Paulo.

Was President Obama’s recent visit to Brazil a genuine deepening of relations between two countries?

Relations between Brazil and the USA are historical. Americans who know Brazil love Brazil, and Brazilians also love the United States. Culturally, from an early age young Brazilians learn to appreciate American music and films. Thus, relations are historically very close.

In recent years, a certain distance has emerged. However, President Obama’s visit to Brazil was positive, even though it was a quick trip and even though he didn’t come to São Paulo. I was with him in person and he promised me that he would come to São Paulo on his next visit to Brazil.

I see his coming to Brazil at the beginning of President Dilma’s term as a positive act.

It is a sign that he and the American Government want closer relations with Brazil. President Dilma reciprocated by saying “we also want to be closer to the United States.”

Such acts are symbolic and important. Problems are never resolved in a one-day presidential trip; if it were that easy there would be no problems in the world as we would go for one day to every country and resolve all difficulties. This act represents the opening of doors and good intentions.

We have the full capacity to begin a new phase in our relations with the U.S.
In real terms, for example, at Exim Bank there was already a line of credit of US$2 billion and an extra billion was opened in order to finance the purchase of American goods and services.

So, some concrete measures took place but what is more important is the fall of trade barriers for Brazilian products such as ethanol, sugar, orange juice, the non-tariff barriers we always talk about, the Generalized System of Preferences (GSP) and the list of products were not renewed. These issues were not resolved but I felt that the possibility of solutions remained open.  

As regards infrastructure, President Obama clearly invoked the interest of American companies. He even spoke of helping Brazil in the pre-salt oil exploration project. It is not really a question of help but rather a common interest. It is a good opportunity. President Obama even said at one point that every billion dollars the United States sells to Brazil creates 5,000 jobs in the U.S. 
 

What would your message be to those who do not know much about Brazil?

Brazilian people are very hospitable and welcome with open arms people from all countries, all continents, especially Americans, who have a historical relationship with Brazil.

I am sure that any American who comes to Brazil will come across very warm-hearted people, that they will be well treated and that they will be able to make the most not just of the business opportunities – which are considerable in São Paulo as well as in other states – but they will also have the chance to discover marvelous beaches. We have 8,000 kilometers of coastline, beaches where it is already 30ºC (86ºF) at 6am, wonderful times, a tropical climate, and also friendly, peaceful and affectionate people. Brazilians are great hosts, they treat people very well; they are very attentive.

Americans who come to Brazil will have the opportunity to discover green areas like, for example, the Amazon region, fantastic rivers and marvelous mountain ranges. Whether it be for tourism, business, to visit big centers, small cities, fields or beaches, nobody who comes to Brazil ever leaves feeling regretful. I am sure that any American who comes will advertise Brazil a lot. 

I would take this opportunity to invite people to come to Brazil, come to São Paulo and to FIESP. As for FIESP’s willingness to help, remember that we are at your service. All those who want to come to São Paulo, to Brazil, to invest or discover things here, look up FIESP and we will be happy to assist you. We have the knowledge to guide and help those who want to believe and invest in Brazil.