BRAZIL INVESTMENT CLIMATE.pdf


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1. Brazilsome geopoliticalfundamentals

1.1 Map of Brazil;

1.2 Strategic Advantages;

1.3 Oil Production;

1.4 Ethanol Production and

1.5 Somes of Energy.

2. Brazils economy2.1 Population and income;2.2 GDP;

2.3 External debt;

2.4 International reserves;

2.5 Inflation;

2.6 Exchange rates;

2.7 Interest rates and

2.8 Current account.

POINTS OF PRESENTATION

3. Brazils foreign trade

3.1 Overview of Brazils foreign trade;

3.2 Main suppliers;

3.3 Main buyers;

3.4 Main exports;

3.5 Main imports;

3.6 Main markets;

3.7 Exports by added value and

3.8 Trade in agricultural products.

4. Brazils investment flows

4. 1 Inbound and

4. 2 Outbound

5. Conclusion: Brazilian EconomyUnder Dilma Roussefs administration


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1.1 Map of Brazil


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1.2 Strategic Advantages

Pop over 100 Millioninhabitants

GDP overUS$ 1 Trillion

GDP,Population,Agriculture

Arable land over20 millions

hectars

ARG

KZT TUR

UKR

AUS

IDN

PKT

NIG

BRAUSA

INDRUS

CHI

BGL

MEX JPN

CAN

GER UK

NLD KOR

SPN

ITA

FRA

Source:Fiesp
http://flagpedia.net/bangladeshhttp://flagpedia.net/indiahttp://flagpedia.net/the-united-stateshttp://flagpedia.net/brazilhttp://flagpedia.net/nigeriahttp://flagpedia.net/indonesiahttp://flagpedia.net/pakistanhttp://flagpedia.net/mexicohttp://flagpedia.net/francehttp://flagpedia.net/spainhttp://flagpedia.net/south-koreahttp://flagpedia.net/italyhttp://flagpedia.net/the-netherlandshttp://flagpedia.net/the-united-kingdomhttp://flagpedia.net/germanyhttp://flagpedia.net/canadahttp://flagpedia.net/argentinahttp://flagpedia.net/turkeyhttp://flagpedia.net/kazakhstanhttp://flagpedia.net/australiahttp://flagpedia.net/the-people-s-republic-of-chinahttp://flagpedia.net/japanhttp://flagpedia.net/russia


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20051.85 million barrels a day

2006Brazil achieves self sufficiency in oil

2007Discovery of Tupi oilfield with estimated 10 billion of barrels

of oil.The discovery could double the Brazilian reserves.

2008Discovery of Carioca oilfield with estimated 70 billion barrelsof oil. Discovery puts Brazil's oil reserves among the world's largest 1

20102.1 million barrels a day

20112.6 million barrels a day 2

Fundamentals

Source:1- Financial Times, July 8 20082- Petrobras, February 2011 estimate

1.2 Oil Production


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Fundamentals

27 billion liters/year (2009)

70 billion liters/year (2020)* Estimate

Increase in cultivated area by 67,000 hectares

Creation of 20,000 direct jobs and 60,000 indirect jobs Investments in production chain estimated at around

USD 1,5 billion for the next years

CO2 emission reduction by 3.5 million tons/year

1.3 Ethanol Production

Source: Sugar Cane Industry Union - UNICA


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Fundamentals

Source: Brazilian Ministry of Mines and Energy

1.4 Sources of Energy

86%

14%

55%

45%

0

20

40

60

80

World Brazil

Renewable Non-Renewable


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2.1 a Brazil's Social Development: Division by Classes in 2009

Source: FGV

Brazil's Economy

15%

55%

30%

%

Classes A/B

Classe C

Classes D/E


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2.1 b Middle Class in % of the Brazilian Population1992/2011

Brazil's Economy

32.52

30.98

36,5237.39

36.37

38.69

37.6437.64

45.08

47.06

49.9653

55

0

10

20

30

40

50

60

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


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2.1 cSalaries Growth

Source: DIEESE

Brazil's Economy

20%

8.33%

15.38%

16.67%

8.57%9.21%

12.05%

9.68%

6.86%

0%

5%

10%

15%

20%

25%

2003 2004 2005 2006 2007 2008 2009 2010 2011


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2.1 dReal Growth of the Minimum Wage1996/2011

Minimum Wage today in SP: R$ 600,00

Source: DIEESE

Brazil's Economy

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

-4.20%

-0.30%

4.50%

1.50%

4.70%

12.40%

3.60%

1.23% 1.19%

8.23%

13.04%

5.10%

4.03%

5.79% 6.02%

10.30%


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35.03

28.6528.82

26.8828.14

26.5928.03

22.66

19.1918.11

16.0015.32

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

1 2 3 4 5 6 7 8 9 10 11 12

2.1 e Poverty in % of the Brazilian Population1992/2010

1993 1995 1996 1998 1999 2002 2003 2005 2006 2007 2009 2010

Source: CPS/FGV

Brazil's Economy


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158.8

136.4

123.3

103.8108.9

97.4

84.3 79.0 76.0

63.0

51.3

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

1 2 3 4 5 6 7 8 9 10 11

2.1 g Number of Minimum Wages Required to Acquire a Basic Car

Source: FIPE

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Brazil's Economy


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2.2 a Brazils GDP in US$

Source: Brazilian Institute of Geography and Statistics - IBGE

Brazil's Economy

2003 2004 2005 2006 2007 2008 2009 2010

GDP

(Billion)552 663.4 882 1,006 1,300 1,378 1,922 2,090

Population

(Million)178.9 181.5 185.5 186.7 188.9 196.0 199 203

GDP per

capita(Thousand)

3,10 3,66 4,77 5,41 6,91 7,030 9,658 10,295


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2.2 b Economic Growth % (GDP)

Source: Brazilian Institute of Geography and Statistics IBGE/IEDI * Estimate March, 2011

Brazil's Economy

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2003 2004 2005 2006 2007 2008 2009 2010 2011

1.10

5.70

3.20

4.00

6.10

5.20

-0.60

7.50

4.00


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Source: MTE - CAGED

2.2 c Brazils GDP 19912011

Brazil's Economy

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1.0

-0.5

4.7

5.3

4.4

2.1

3.4

0.0

0.3

4.3

1.3

2.7

1.1

5.7

3.2

4.0

5.7

5.1

0.0

7.5

4.0


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2.2 d Biggest Economies - Projected 2011 - GDP US$ Trillion

Source: The Economist

Brazil's Economy

B il' E


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2.3 Development of External Debt

Brazil's Economy

Source: Central Bank * April, 2011

Year Gross Amount (US$ Billion) Net Amount (US$ Billion)

2000 216,9

2001 209,9

2002 210,7

2003 214,9 165,6

2004 201,4 148,42005 169,4 115,6

2006 172,6 86,76

2007 193,2 12,86

2008 200,2 (-28)

2009 201,4 (-62)

2010 288,6 (-51)

2011* 355 (-120)

il


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Brazil's Economy2.4 Brazilian International Reserves

Year US$ Billion

2003 49,3

2004 52,9

2005 53,8

2006 85,82007 180,3

2008 193,8

2009 238,5

2010 288,6

*2011 355

Source: Central Bank *April, 2011

B il' E


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Brazil's Economy2.4 a Brazilian International Reserves

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

2003 2004 2005 2006 2007 2008 2009 2010 2011

49.3 52.9 53.8

85.8

180.3

193.8

238.5

288.6

355.0

Source: Central Bank *April, 2011

US$ Billion

B il' E


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Source: Brazilian Institute of Geography and Statistics - IBGE

Brazil's Economy2.5 a Brazilian Inflation Rates

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

12.53%

9.30%

7.60%

5.69%

3.14%

4.46%

5.90%

4.31%

5.91%6.50%

F d t l f B il' E


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6.0

4.0

2.0 1.5

6.5

3.5

2.5 2.52.5 2.5 2.5 2.5

10.0

8.0

6.0 5.5

10.5

7.5

6.56.5 6.5 6.5

6.5 6.5

8.9

6.0

7.7

12.5

9.3

7.6

5.7

3.1

4.5

5.9

4.3

5.9

8.0

6.0

4.03.5

8.5

5.5

4.5

4.5

4.5

4.54.5 4.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

0 2 4 6 8 10 12 14

Tolerncia Mn. Tolerncia Mx. IPCA META

Fundamentals of Brazil's Economy2.5 b Brazils Inflation Rate Targeting

Source: Central Bank / IBGE

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

B il' E


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1.813 1.775

1.770

1.595

2.332

2.3121.961

1.741

1.8831.8051.779

1.736

1.8191.802

1.7541.7551.6901.701

1.715

1.665

1.673

1.660

1.628

-

0.500

1.000

1.500

2.000

2.500

2.6 Exchange Rates of the Real Against the US Dollar

Brazil's Economy

B il' E


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2.7 World's Interest Rates

Country Nominal Rate Inflation Real Rate

Turkey 6,25% 4,16% 2,09%

Russia 8,00% 9,50% -1,50%

Brazil 12,00% 6,50% 5,50%

South Africa 5,50% 3,70% 1,80%

Mexico 4,50% 3,57% 0,93%

India 5,75% 9,30% -3,55%

Euro Area 1,00% 2,40% -1,40%

China 6,06,% 6,01% 0,05%

Japan 0,00% 0,00% 0,00%

USA 0,25% 2,10% -1,85%

Source: Trading Economics * Estimate 2011

Brazil's Economy

Brazil's Economy


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US$ Billion

2.8 Brazil's Current AccountBrazil s Economy

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

-23.502

-30.452-33.416

-25.335-24.225

-23.215

-7.637

4.177

11.679

13.98513.643

1.551

-28.192-24.302

-51.822

42.200

-60

-40

-20

0

20

40

60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

B il' E


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2.9 Main problems yet to be solved

Taxes are not competitive;

Interest rates are very high;

Brazilian currencyovervalued;

Labour costs and

Infrastructure.

Brazil's Economy

F ig T d


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Foreign Trade3.1 Brazils Balance of Trade

Source: Development, Industry and Trade Ministry - MDIC * June 30, 2011

US$ Billion

0

50

100

150

200

250

300

350

400

2004 2005 2006 2007 2008 2009 2010 2011

Exports Imports Balance Flow of Trade

Foreign Trade


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Foreign Trade3.2 Major Suppliers Countries to Brazil


Foreign Trade


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Foreign Trade3.3 Major Countries for Brazilian Exports


Foreign Trade


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Foreign Trade3.4 Main Products Exported


Foreign Trade


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Foreign Trade3.5 Main Products Imported


Foreign Trade


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Foreign Trade3.6 a Major Suppliers Markets to Brazil


Foreign Trade


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Foreign Trade3.6 b Major Markets for Brazilian Exports


Foreign Trade


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Foreign Trade3.7 Products Categories of Exports


Foreign Trade


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Products Position between main exporters % of Total Global Exports

Orange juice 1 81%

Poultry 1 35%

Sugar 1 33%

Coffee 1 30%

Tobacco 1 27%

Bovine Meat 1 24%

Ethanol 1 13%

Soy 2 32%

Soy Oil 2 28%

Pork 4 11%

Cotton 5 5%

Source: MDIC * December 2010

Foreign Trade3.8 Brazilian Trade in Agricultural products

Investment Flows


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Investment Flows4.1 Foreign Direct Investment: Inflows

Source: Central Bank

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

32.80

22.50

16.60

10.10

18.10

15.10

18.80

34.70

45.10

25.90

50.00

70,00 *

*Central Bank Estimate

Investment Flows


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212224

2440

404045

515253

60108

158223

232

0 50 100 150 200 250 300

LuxemburgSweden

Hong KongSingapore

MexicoItaly

SwitzerlandBelgium

GermanyRussiaSpainChina

CanadaFrance

United KingdomUSA

US$ Billion

Source: Unctad, World Investment Report 2008

Brazil

Investment Flows4.1 Foreign Direct Investments: Inflows by Country - 2008

Investment Flows


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Investment Flows4.2 Foreign Direct Investment: Outbound

Source: Central Bank

US$ Billion

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

3.20 2.80 3.102.00

11.10

4.00

29.30 29.60

34.10

22.30

28.00

Investment Flows


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Source: Unctad, World Investment Report 2008

US$ Billion

USAUnited Kingdom

France

Germany

Spain

Italy

Japan

Hong Kong

Belgium

Switzerland

Russia

Brazil

Holland

Canada

China

Belize

Investment Flows4.2 Foreign Direct Investment: Outflows by Country - 2008

Foreign Trade


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Sound policies ofLulas government are to be sustained;

Inflation targeting maintained;

Interest rates policies are to be maintained;

Over appreciation of Real is to be maintained;

Some tax reforms will take place; Some reforms in Labour Law to take place;

Public management to be improved;

Foreign Trade balance to decrease;

Current account deficit to grow;

Economy to continue to grow at about 5% per year; and

Brazils economy is poised to overtake Frances, Britainsand Germanys by the end ofRoussefs administration.

Source: Brazilian Ministry of Foreign Affairs

Foreign Trade5. Dilma Roussefs Administration: The Brazilian Economy andForeign Trade

NORONHA ADVOGADOS


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Address:4th floor, 193/195 Brompton RoadLondon SW3 1NEEngland UK

Phone: (44-20) 7581-5040Fax: (44-20) 7581-8002

Contact:Vera Helena de Moraes Dantas

NORONHA ADVOGADOS

Located in one of the main financial centers of the city, the So Paulo office is the headoffice of Noronha Advogados and the oldest, having been opened in June 1978.

The London office, opened in 1987, has partners admitted in England and Wales, isregulated by the SRA and supports investments and business with Brazil.

Address:Av. Brig. Faria Lima, 1485 17andar Torre Norte01452-002 So Paulo SP

Brasil

Phone: (55-11) 5188-8090Fax: (55-11) 5184-0097

Contact:Durval de Noronha Goyos Jnior

Lilian Thom


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NORONHA ADVOGADOS


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Durval de Noronha Goyos Jr.

[email protected]

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BRAZIL INVESTMENT CLIMATE.pdf