Message of President

11/04/2007
Christian Hanssen

Annual Report 2006; pag. 25
I am really glad to use this space in the 2006/2007 Annual Report to highlight SWISSCAM’s achievements and express my views concerning the Brazilian political-economic scenario. When I took over my position as SWISS-CAM’s president in March 2006, I was positively impressed by how well-organized the Chamber was, and I am really glad to be able to rely on such a cooperative executive board and professional team, whose work has been recognized both in Brazil and in Switzerland.

In 2006, SWISSCAM had renowned guest speakers, such as Eugênio Staub, Fernando Furlan and Pedro Malan; participated in the dental, hospital and environmental fairs; received over 600 commercial inquiries; organized the visit of 15 executives to our country representing a Swiss department store chain; and welcomed Phillippe Nell, head of SECO (Swiss State Secretariat of Economic Affairs), who is in charge of designing a new strategy to enhance bilateral trade between Brazil and Switzerland.

In order to collect relevant and concrete data, Mr. Nell met with representatives of Swiss companies in Brazil, who expressed their views and suggestions. Based on these, a strategy was designed organizing, as a first step, the visit of Ms. Doris Leuthard, the Swiss Federal Counselor, to Brazil. In February, the Swiss Counselor and the Brazilian Minister of Foreign Affairs, Celso Amorim, signed a Memorandum of Understanding setting up an economic commission that will serve as a platform for both countries to discuss concrete issues, allowing them to design bilateral agreements, enhance bilateral trade and direct investment, address the countries’ specific economic issues, stimulate technological and scientific cooperation, and assure constant exchange of commercial information and proposals to optimize investment initiatives.

Considering the huge potential offered by Brazil to Swiss investors, I am confident that this initiative of the Swiss government will generate new business opportunities for both countries. I would also like to highlight the special attention given to the ethanol and renewable fuel sectors during the visit of Counselor Leuthard. However, I cannot neglect to mention the obstacles that still hinder the efforts of potential investors in our country – still the country of the future. The main question is: What ever happened to the economic growth promises made by Lula?

Although President Luiz Inácio Lula da Silva was reelected with virtually the same number of votes as in the previous election (2002: 61.3%, 2206: 60,8%), different people voted for him in 2006. The president got more votes in small municipalities (10-20 thousand voters) in poorer regions. A number of studies (Jairo Nicolau et al, IUPERJ – Rio de Janeiro University Research Institute) point out to the significant correlation between the funds spent on social programs (bolsa-família) and the votes won. There are different ways to interpret these facts, without denying his impressive victory with two third of the votes.

In the last four years, Brazil has shown positive indicators, such as low inflation; trade balance surplus, resulting in an increase in the country’s reserves; and a significant primary surplus, among others. Nevertheless, these results did not hide the population’s disappointment with the country’s tiny GDP growth. If we compare Brazil’s growth to that recorded by other developing countries or even other Latin American countries, Brazil ranks last or close to last. The same applies to Brazil in relation to the BRIC countries, which have been in the center of developing countries’ attention. One of the reasons for such a weak performance is the lack of investment by private companies, a result of extremely low liquidity. We pay almost 40% of our GDP in taxes and duties, one of the highest percentages in the world, a situation that is worsened by the fact that most of this money is used to pay for the government’s debt and not to invest in the country’s basic needs. All levels of the government must urgently do what any housewife is capable of doing: reduce spending and use wisely what is left. We hope the PAC (Growth Acceleration Program) can revert this situation and that the constantly debated and necessary reforms (political, legal, tax and others) get off the ground, even if modestly.

While waiting for these changes to take place, supporting the country’s expected growth, SWISSCAM has been working hard to stimulate Swiss companies and member companies to do business in a country that shows a promising scenario, but also one that is full of traps, which keep investors away and prevent Brazil from fulfilling its growth potential. In addition to this, the Chamber also supports Brazilian companies that plan to set up operations in Switzerland.

We know that such drastic changes do not happen overnight, but we believe that Brazilian politicians, together with entrepreneurs, will be able to do their homework. Although this task is extremely hard, it is essential for Brazil to improve its growth performance, the worst among most developing countries, and get the global recognition it deserves for its huge natural, technological and human resources.