Message of Brazilian Ambassador to Switzerland

Maria Stela Pompeu Brasil Frota

Annual Report 2008; pag. 25
Before taking over as Ambassador in Bern, in November 2008, I had the pleasure of visiting you at the Swiss-Brazilian Chamber of Commerce and getting to know the Swiss companies based in Brazil. The Swiss investment has been present in Brazil for many decades and includes brands that have achieved a profound identity with the habits of Brazilian consumers. Brazil values the tradition of quality and respect to workers of these companies, as well as their contribution in the creation of jobs.

The financial and economic crisis that marks the current situation represents a challenge to Brazil and Switzerland, countries with solid economic foundations and a path of sustainable growth in the last years. The accelerated globalization of the economy and of finance has allowed developed and developing countries to share the benefits of a greater economic integration in times of plenty, but it has also made them more interdependent in times of difficulty, like the current situation. The leaders of our countries are now facing the challenge of working on various fronts in order to stabilize the world’s financial system and minimize the impact of the fluctuation of capital markets on economies.

In the international plan, governments are seeking to avoid policies that will worsen the world situation even more. As affirmed by President Luiz Inácio Lula da Silva, this is the moment for countries to increase international trade and investment, to remove the risk of repeating the depression of the 1930s. In those critical years, protection barriers contributed towards deepening and prolonging the crisis.

Following this line, Brazil is engaged in strengthening the relationship with the main markets. Switzerland, in this context, is amain partner. In 2008, the total direct investments from Switzerland in Brazil was US$ 772 million. This figure makes Switzerland one of the major investors in Brazil; but there is still space for a greater increase of investment flows. There are immense opportunities in the Brazilian economy, which will reward investors with a long-term vision. According to the OECD, Brazil is one of the countries in a better position to resist the negative effects of the spread of the financial crisis, and could even come out stronger in relative terms once the world economy begins to recover.

I would also like to stress the recent trend in the growth of Brazilian investments abroad, which signals the new role Brazil has as a capital exporter. The expansion of the international performance of Brazilian companies is a sign of the increasing confidence of business people in their capacity of managing their businesses in a globalized economic environment. Switzerland, a country that offers privileged conditions for business activity, is a natural candidate for the international growth of our companies, whose commercial advances have already been observed inside Switzerland.

In the commercial sphere, the Brazil-Switzerland interchange has shown signs of continuous dynamism. In 2008, the value of Brazilian exports to Switzerland reached US$ 1.46 billion, with a growth of 26% in comparison to 2007. It exceeded, therefore, the record of US$ 1.15 billion achieved in the previous year, according to data from the Brazilian Secretariat of Foreign Trade. The Brazilian imports of Swiss products had, during the same period, an increase of 3%, reaching US$ 2.25 billion. In 2008, there was not only an increase of the chain of commerce between both countries, but a better balance in this interchange.

The main Swiss exports to Brazil include products, such as capital goods, which meet the Brazilian interest in the modernization of its industrial base. The reduction of the commercial deficit of Brazil with Switzerland would indicate, in turn, the prospect of a greater rivalry of domestic products in the Swiss market, as well as enhancing the composition of Brazilian exports, which recently included high technology products, for example, airplanes.

Finally, I would like to speak briefly about the positive time of Brazil-Switzerland relations, which contributes towards the consolidation of the bilateral economic interchange. In August 2008, during the visit of the Federal Counsellor of Foreign Affairs, Micheline Calmy-Rey, to Brazil, a memorandum of understanding was signed establishing a strategic plan between Brazil and Switzerland, which will allow both countries to deepen the dialog on themes of common interest on the political, economic and cooperative agenda. Brazil and Switzerland also maintain a Mixed Committee on Trade and Economic Cooperation, which will be holding its second meeting in March 2009. It is a consultative group, which discusses opportunities for enhancing the bilateral economic relationship and studies ways of reducing trade and reciprocal investment barriers. Another promising area of cooperation is that of science and technology. Both countries are engaged in updating the existing agreement of cooperation in science and technology, signed in 1968. In this field, there are already initiatives in place, such as the collaboration between the Instituto para o Desenvolvimento Integrado do Estado de Minas Gerais (INDI - Institute for the Integrated Development of the State of Minas Gerais) and the Centro Suíço para Eletrônica e Microtecnologia (CSEM - Swiss Center for Electronics and Microtechnology).

There is, therefore, great potential in enhancing the partnership between Brazil and Switzerland, both in the economic relations and in the political dialog. Maintaining mutual engagement, through sustainable reciprocal investments, increasing trade and cooperating in suggesting common themes of interest, both countries are in a better position to overcome the present turbulences and contribute towards an international system that is fairer and more balanced, an objective shared by our societies.

Bern, February 2009