Message of Swiss Ambassador to Brazil

Rudolf Bärfuss

Annual Report 2006; pag. 31
In October 2006, the Brazilian people made their political choice for the next four years. After the elections, with the country once again showing a solid and stable political scenario, president Luiz Inácio Lula da Silva announced that his second presidential term would prioritize economic growth. In line with this objective, he launched the Programa de Aceleração do Crescimento (Growth Acceleration Program) – PAC.

By reaching its growth objective, Brazil will help boost the country’s bilateral relations with Switzerland, especially concerning trade and investment. Fortunately, the statistics show that, differently from recent years, bilateral trade is no longer at a standstill, and it is showing signs of dynamism. According to the Swiss Customs Administration, compared to 2005, Swiss exports to Brazil increased by 28.4% in 2006, while importation of Brazilian products went up by 8%. Direct Swiss investment hit a new record in 2005, reaching 6.5 billion Swiss Francs, according to data provided by the Swiss Federal Bank.

These figures are mainly the result of the favorable international scenario and the economic growth recorded by both countries. And all signs indicate that this growth tends to accelerate in the next years. Some factors contributing to this are: In December 2006, the Swiss government designed a new strategy to define its priorities, the so-called BRIC strategy. The Swiss strategy prioritizes the relationship with the four major developing countries: Brazil, Russia, India and China; The Swiss Minister of the Economy, Mrs. Doris Leuthard, chose Brazil as the first country, among the four BRIC countries, to receive the visit of an economic mission consisting of representatives of the ministry and 15 entrepreneurs from strategic sectors. In February, the delegation met with president Lula and the Ministers of Foreign Affairs, Development, the Treasury and Agriculture; Minister Leuthard and the Brazilian Minister of Foreign Affairs signed a Memorandum of Understanding. The document creates the Mixed Commission for Commercial and Economic Relations, whose main goal is to assure the basic conditions for harmonious development and diversification of bilateral trade and investment initiatives. The delegation was impressed by Brazil’s performance and efficiency in the biofuel sector. The Minister signaled her willingness to facilitate importation of the Brazilian bio-ethanol and consider potential bioenergy research partnerships; LOCATION Switzerland, a Swiss governmental agency in charge of attracting foreign investment, is organizing a workshop to be held in Sao Paulo in March 2007.

Both Brazil and Switzerland expect economic growth. However, in order to grow, a country needs additional investment, whether public or private. It is the responsibility of both Brazilian and foreign companies to work towards expanding the market, increasing production, and generating new jobs. The private sector, particularly, is intent on making that happen. However, such changes require stable and clear laws that provide assurance to the private sector.

Swiss companies, most of which have operated in Brazil for over 80 years, still recognize the size and potential of the Brazilian market. They, together with other potential investors, are willing to contribute to accelerating the country’s growth.

Nevertheless, they require solid bilateral agreements that prevent double taxation and mutually stimulate and protect investments. Minister Leuthard discussed these two topics with several government representatives in Brasilia. The implementation of the PAC might help both the government and the Congress rethink some of their past strategies.