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30% of Brazil's GDP and 70% of Exports Come from Medium and High Tech Products PDF Print E-mail
Written by Joel dos Santos Guimarães   
Sunday, 27 July 2008

Modern Brazilian industry The solidity of economic indicators, the size of the market, both effective and potential, added to a per capita income of US$ 10,000 and the growth of Brazilian foreign trade are the ingredients of a recipe that make Brazil one of the main expansion hubs in the world.

And it is this seasoning that, more and more, is attracting the appetite of foreign investors. Between 1997 and 2006, they turned US$ 241 billion to the productive chain in Brazil.

Last year, foreign fund inflow into the country reached US$ 34 billion and the Brazilian Society of Transnational Corporations and Economic Globalization (Sobeet) believes that in 2008 a similar volume of foreign investment should enter the country.

And the growth of Brazilian foreign trade and the modern Brazilian industry are the sauces that have been bringing water to the mouths of foreign investors.

"One third of the country's exports are of high or medium technology content," explained the president of the Federation of Industries of the State of Rio Grande do Sul (Fiergs), Paulo Tigre, recalling that this industrial sector plays a significant role in the Brazilian economy: representing 30% of the Gross Domestic Product (GDP), estimated at US$ 1.9 trillion, and 70% of the country's foreign sales.

Ready Dish

To Tigre, the new Brazilian economy that is under development, with the production of ethanol, clean electric energy, fibre pulp and top-end technology in oil extraction, has contributed to attract investment and partnerships:

"The ethanol industry is among the most promising. The country is the main global producer of the product from sugarcane. The efficiency of production of ethanol from sugarcane is six times greater than when the product is made from corn, which places it in a great advantage when compared to the United States."

On participating in seminar "Brazil-Colombia: New Business Frontiers", in Bogotá, Colombia, last week, the businessman also pointed out the vehicle sector among the main items in the menu of the Brazilian economy as a source for attraction of foreign investment:

Over the next three years, the vehicle sector should invest US$ 14 billion and, this decade, it is has been prominent for investing in technology for production of flexible fuel engines, which may be powered by both petrol or alcohol (ethanol) or any combination of the two.

À la Carte

Brazil is also the pioneer in oil extracting technology in deep waters and production should triple by 2015. The new fields discovered have propelled the country to the eighth position among the owners of the largest oil reserves in the world.

Investment in oil and gas is expected to reach US$ 92 billion by 2010. The ironworks industry is another dynamic area, and one of great international competitiveness. The steel production capacity should double by 2012, reaching 66 million tons.

The performance of electric energy and the possibilities arising from Brazilian flora are also opportunities that the Brazilian economy may offer to foreign investors.

"While the participation of renewable sources in the global energy matrix is 14%, in Brazil, this rises to 45%. The hydroelectric power potential of Brazil is 260,000 megawatts, of which 170,000 MW may still be used. Investment is forecasted to reach US$ 44 billion by 2010," stated Paulo Tigre, who is also the vice president of the National Confederation of Industries (CNI).

Another opportunity for investors comes from national flora, especially in the Amazon, a global tendency in the development of new products. Brazil has 20% of all the global biodiversity, used by the country's industry in the areas of medicine, herbal medications, cosmetics and nanotechnology.

In the Heart of the Amazon

Urucu Province, located in the city of Coari, in the heart of the Amazon, is commemorating its 20th anniversary. To celebrate the date Brazilian oil multinational Petrobras released the book "Petrobras in the Amazon," by historian Etelvina Garcia.

Urucu is the largest land gas province in Brazil, with production of 55,000 barrels of oil equivalent (BOE) per day and housing the largest gas processing unit in the country, with a volume of 10 million cubic meters per day.

According to Petrobras, this volume makes the state of Amazonas the second main national producer in terms of barrels of oil equivalent, and the city of Coari the main producer on land. LPG production in Urucu supplies the northern Brazilian states of Pará, Amazonas, Rondônia, Tocantins, Acre and Amapá, as well as Maranhão and other northeastern Brazilian states.

The inflow of taxes from exploration and production in Urucu makes Coari the main receiver of royalties from production on land fields in Brazil. The oil industry generates to the state of Amazonas some 2 million reais (US$ 1.3 million) a day in value added state tax (ICMS), representing approximately 19% of the state's tax revenues in 2007. Over 5,000 direct jobs are generated, and most of these people are hired in the state of Amazonas itself.

More Researchers

According to Agência Amazônia, scientists connected to the Brazilian Science Academy are going to ask the government of Brazil for urgent measures to guarantee that researchers stay in the Amazon. The idea is to expand the number of researchers with doctorates in the Amazon from the current 2,800 to 4,200 by 2011. To the scientists, the permanence of researchers is the main weapon to protect the biodiversity and riches of the Amazon.

Of the little over six million square kilometers of the Amazon, 60% is in Brazilian territory. The region has 55,000 species of plants with seeds, which answers to 22% of the global total. In the Amazon, there are 502 species of mammals, 1,677 different varieties of birds, 600 amphibian species and 2,657 varieties of fish. However, the Amazon receives just 2% of the funds that the country turns to science and technology.

On the wings of Embraer

Embraer and Nigerian airline DanaJets, a charter division of Dana Airlines, have signed a contract for the purchase of a Legacy 600 executive jet. Delivery of the aircraft, to be configured for 13 seats, is scheduled for the end of 2009. The deal, considering the official list price of the aircraft, is US$ 26.93 million, considering economic conditions forecasted for January 2009.

This order is already included in the Embraer firm order backlog for the second quarter of 2008. This is the second order for Embraer aircraft placed by the Nigerian airline, which purchased two Phenom 100 aircraft and one Phenom 300 at the Dubai Airshow, in November 2007. Initial delivery of Phenom jets is forecasted for 2011.

Anba - www.anba.com.br

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Comments (1)Add Comment
"per capita income of US$ 10,000 and the growth of Brazilian foreign trade are the ingredients of a recipe that make Brazil one of the main expansion hubs in the world. "
written by ch.c., July 28, 2008
Doubtful this is considered HIGH ! Sorry !

And for FDI "Between 1997 and 2006, they turned US$ 241 billion to the productive chain in Brazil."
This is small.....on a per capita basis ! Not even "your share" when measured on a FDI worldwide basis...adjusted for per capita !
sorry

If exports totals US$ 1'000.- per capita....for 2008, then most OTHERS Mercosur members BEAT BRAZIL !!!!!
Simple.
I am not even talking of ALL developed nations, some others emerging nations and.....the OIL exporting countries...of course..who easily beat Brazil !!!!!!

"this industrial sector plays a significant role in the Brazilian economy: representing 30% of the Gross Domestic Product (GDP), estimated at US$ 1.9 trillion, and 70% of the country's foreign sales."
THANKS to Ford, GM, Fiat, Deere, and Nestlé for the dry milk, just to name a few FOREIGN companies. None are Brazilian...to my knowledge and none are using Brazilian R&D or technology or distribution channels !!!! They use their own....because you have NONE..... for these products.

Funny that .... in the 70 % of the country foreign sales considered as High or Medium technology you include...STEEL and, ETHANOL, !!!!!
Who cannot produce steel or ethanol in the emerging countries ?
Nothing magical...in my view !
And you probably included leather skins and others basic goods that even China, Morocco or Algeria are..... are importing and re-exporting with higher values added !!!!!!!
No doubt you also include in the medium technology goods such as caps, socks, T-shirts and cheap textiles.
Of course the cheap Brazilians shoes that you are seling for BELOW US$ 7.- per pair, are also included in the medium technology.
exports. Such as....FLIP FLOPS...but also leather shoes.

Is your navel not irritated...since you caress it with so much obsession ????



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