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Brazil Has No Viable Export Strategy, Says Former Industry Minister |
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Written by Newsroom
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Wednesday, 19 October 2005 |
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Brazilian former Industry, Trade and Tourism Minister Dorotéa Werneck described the export situation of Mercosur member countries, Brazil, Paraguay and Uruguay as a "tragedy" because of their high dependency on current markets evolution.
Werneck said that Brazil's current growth is undergoing "a delicate moment" because its exchange rate is undervalued and is taking advantage of the good performance of the world economy with a surge in the price of commodities, which is not a sustainable scenario in global affairs.
"The origin of that growth can't be found in Brazil's internal situation. Uruguay and Paraguay follow the same track which is a tragedy", emphasized the former minister before a forum of Mercosur businessmen in Asunción, capital of Paraguay.
An economist and advisor to Brazil's Foreign Trade Foundation and Foreign Trade Association, Werneck on the other hand praised Argentina, which will have a 7% growth rate this year based on an adequate exchange rate.
"Differences of this kind among Mercosur member countries lead to internal disputes in the block and the impossibility to decide on a joint export strategy to third countries," she underlined.
Further on Werneck highlighted that countries which have significantly advanced have done so exporting and specifically mentioned, Japan, South Korea, China, Mexico and Chile.
But she also warned that the export process demands time, investment and the first results can only be perceived at least two years later.
"You can't play with exports, you have to be ready, a prevention job is needed to be prepared for events that can lead to the closure of markets," said Werneck apparently in direct reference to the foot and mouth disease outbreaks in Brazil, which have led 30 countries to ban Brazilian meat imports. This article appeared originally in Mercopress – www.mercopress.com.
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....someone who has an objective analysis of the reality....in Brazil. Not the subjective analysis the government announces weekly on their exports performances....to hide the truth.....on the quality of exports.
Brazil emphasizes too much on basic commodities...which provides a boom and bust economy...and by far dont invest enough to create goods for export with value value products....as the Asian countries do.
The day the Brazilian government will understand this.....this could be the start of a fundamental change and more sustainable long term growth for your country.
But to achieve this, very large and long term investments are needed in basic and high education, health, infrastructure, housing. Just this, will provide millions of jobs that will generate not only less poverty, more consumer power....but more taxes ! Like a snowball effect.
Also your government should reduce bureaucy, red tape, briberies and corruption.
As for your interest rates for consumers that pays 80 to 150 % per year and your small businneses that must pay between 40 to 60 % when inflation averages 6 to 8 % or less, is just insane. This has the effect of tying more and more people to their debts and cannot be profitable....in any reasonable business plan.
This is like your poor farm workers who cannot resign and leave their employers
because shark loans were offered to them that they cannot ever repay !!!!!!
This strategy is the exact copy of your farm's slavery...with no exit possible !!!!