Brazil-Spain: investments and business opportunities in the post-pandemic scenario

Hybrid meeting

Casa América has hosted the Seminar on Brazil-Spain systemic collaboration, organized together with the Brazilian Embassy.

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Representatives of the Governments and the private sector of Brazil and Spain participated in the «Seminar: Building systemic Brazil-Spain collaboration: investments and business opportunities in the post-pandemic scenario", a hybrid meeting held in House of America to analyze the current situation and the investment and business opportunities which presents the scenario of post-pandemic economic recovery in Brazil.

 

The seminar, organized by the Brazilian Embassy in Spain and the Spain-Brazil Council Foundation, showed on the one hand how complicated the situation was, not only in Brazil and Spain but throughout the world, due to the crisis of COVID-19. On the other hand, however, he reflected undeniable optimism in the face of economic figures that reflect that the recovery is already taking its first steps.

 

The event was inaugurated by the President of the Spain-Brazil Council Foundation and president of Mapfre, Anthony Huertas; the Brazilian Ambassador to Spain, Pompeu Andreucci Neto; the General Director of Casa de América, Antonio Pérez-Hernández, and Luis Oscar Moreno García-Cano, Director General of Economic Diplomacy of the Ministry of Foreign Affairs, European Union and Cooperation. All of them highlighted the excellent relations, both political, economic and social, that both countries have with each other, and the need to continue intensifying them.

 

The speakers highlighted the structural reforms, the agreement European Union – Mercosur and the entry of Brazil into the OECD as the three axes that will support Brazil's economic recovery and the increase in Spanish investments in the country. “Spain is a fundamental partner of Brazil and we want to demonstrate this with the support of the signing and ratification of the Mercosur agreement. We believe that greater integration with the UE It can support not only trade and investment, but the integration of the respective value chains on both sides of the Atlantic. For us, Brazil is a priority destination for our investments, with 48.000 billion euros, and Brazil's accession to the OECD is especially relevant for us because it is undoubtedly one more step towards full integration of Brazil into the global economy. , and without a doubt it will be one of the priorities of this Ministry to support Brazil's accession to the OECD," said the General Director of Economic Diplomacy, Luis Óscar Moreno.

 

First panel: Priorities and challenges in the post-pandemic scenario

 

The first panel of the seminar, titled “Priorities and challenges in the post-pandemic scenario,” wanted to offer the government's vision from both sides of the Atlantic. It began with the intervention of Maria Paz Ramos Resa, General Director of International Trade and Investments of the Secretary of State for Foreign Trade. She assured that the economic and commercial relations between Brazil and Spain, "traditionally very relevant (...) will be reinforced and intensified in the post-pandemic period."

 

He pointed out telecommunications, financial services, metallurgy, energy and insurance activities as the main sectors of Spanish investment in Brazil. "The stock amounts to 48.000 million euros, which places us as the second foreign investor, and Brazil is the fourth world destination for Spanish investments."

 

Likewise, he wanted to highlight the work of Spanish companies in Brazil during the pandemic and their commitment to maintaining essential supplies to maintain economic activity. Companies like Telefónica, Banco Santander, Iberdrola or Mapfre, who “have contributed to the fight against the pandemic in both Brazil and Spain.”

Below are various representatives of the Government of brazil They outlined some of the economic policies carried out in the American country and the main business opportunities that arise in the short and medium term.

 

Bruno Eustáquio, Deputy Executive Secretary of the Ministry of Mines and Energy, emphasized the presence in Brazil of large Spanish companies, such as Repsol or Neoenergia, which develop “large projects that involve everything from oil and gas to transmission lines and generation of energy and clean sources.” Current investments reach 1.600 million euros, but potential investments amount to around 2.000 million.

 

Bruno Eustáquio also highlighted that, with a total of 12, Spain is the country that has participated the most in auctions in this sector after Brazil itself. And he presented the new business opportunities that arise in the country: the new gas market (whose reform has followed the Spanish example), the modernization of the electricity sector and the new agenda for mining extraction. All of these opportunities will materialize over the coming months in the form of auctions of mining rights, oil and gas areas, transmission lines, etc.

 

At the same time, Fábio Rogério Teixeira Dias de Almeida, Director of the Department of Structuring and Articulation of Associations of the Ministry of Infrastructure, emphasized the security that Brazil offers for foreign investments and highlighted the portfolio of his ministry, which has already put out to tender and will continue to put out to tender a vast portfolio of ports, airports, roads and railways.

 

Pedro Florêncio, Deputy Special Secretary for External Relations of the Executive Secretariat of the Civil House In his presentation, he reported on Brazil's efforts to join the Organization for Economic Cooperation and Development (OECD). For Brazil, this accession - formally requested in 2017 - “is a priority project” and the country has been working for decades to achieve it: “Brazil was considered the non-member country with the most participation in the OECD (…) All the principles and best practices of OECD are fully reflected in our public policies and structural reforms.”

 

One of the main instruments that Brazil uses to attract investments is the Investment Partnership Program (PPI). Thiago Costa Monteiro, secretary of Transport Associations of the PPI, explained the fiscal effort that the country's Government has carried out to combat the efforts of the pandemic and defined the year 2021 as “the year of auctions” in Brazil, with numerous projects that will go out to tender: roads, highways, terminals ports, airports, oil, electrical energy... The current PPI portfolio is 154 projects.

 

Finally, the Director of the Department of Promotion of Services and Industry of the Ministry of Foreign Affairs, Luiz Cesar Gasser, presented the new investment agreement model developed by Brazil, based more on cooperation and facilitation than on disputes and arbitration: the Investment Cooperation and Pacification Agreement, which has already been signed with 14 countries.

 

The last speaker of the first panel was Marcus Vinicius Pinta Gama, Deputy Secretary of the Ibero-American General Secretariat (SEGIB), who wanted to offer a perspective on the situation in Ibero-America, “one of the regions most affected by this pandemic”, with 35% of deaths worldwide. “In Latin America, one in three people, due to restrictions, will fall below the extreme poverty threshold this year.”

 

Due to the effect of COVID-19 "in 2021, Ibero-Americans will have an economy between 8 and 10% smaller than the previous year (...) It is a generally discouraging forecast, but the situation of each country is diverse, and in the In the case of Brazil, the signs of recovery encourage operators and businessmen.”

 

Second panel: Perspectives on Brazil-Spain economic and trade relations: a vision of the private sector

 

The second panel, “Perspectives on Brazil-Spain economic and trade relations: a vision of the private sector” began with the intervention of Íñigo Fernández de Mesa, Vice President of the Spanish Confederation of Business Organizations (CEOE) and president of the Institute of Economic Studies.

 

He highlighted the great importance that Brazil has for Spanish interests, since "it brings together 40% of the GDP of Latin America and Spain maintains an excellent bilateral, economic and commercial relationship." He also noted “the commitment of permanence of the Spanish company in Brazil” and named telecommunications, industry and energy, as well as infrastructure, resource management and the environment as the main sectors of activity with the presence of Spanish companies. “And I would highlight the agri-food sector, where Spanish companies are growing, and the tourism sector, which is being greatly affected by this crisis but will emerge stronger” once the health crisis ends.

 

Like the SEGIB representative, Íñigo Fernández de Mesa emphasized the importance of small and medium-sized businesses. “Spain and Brazil are countries where SMEs have a key importance (…) they are also very good companies that, thanks to digitalization, are beginning to internationalize.” For this reason he stressed the need to provide support to this type of companies.

 

With respect to Brazil's economy, he indicated that "Spanish businessmen positively value the reforms announced by Brazil" based on fiscal balance, improved competitiveness and increased economic freedom, and he stressed the opportunities that the agreement will generate. EU-Mercosur such as Brazil's accession to the OECD.

 

Equally positive was the intervention of Eduardo Navarro, Director of Strategy and Corporate Affairs at Telefónica, who pointed out that Spanish investments in Brazil have been made “very long term” and referred to Telefónica's satisfaction after more than two decades in the country: not in vain Brazil is one of the company's four strategic markets along with Spain, Germany and UK.

 

He also expressed “enormous confidence that next year the negotiations can be brought to a successful conclusion.” European Union – Mercosur” and defined it as “a great opportunity” that Brazil's entry into the OECD, the signing of the EU-Mercosur agreement and Brazil's expected economic recovery in 2021 coincided in time.

 

Regarding the agreement EU-Mercosur, José Ignacio Salafranca, Vice President of the Euroamerica Foundation and Advisor to the Economic and Social Committee of the European Union, explained that, if signed, it would be “five times more important than the EU-Japan agreement and 7 times more important than the EU-Canada agreement. The latter, in the last year, has increased exchanges by 25% between both parties.

 

The last panelist was Carlos Eduardo Abijaodi, Director of Industrial Development of the National Confederation of Industry of Brazil (CNI), who already participated in the Foundation's Leaders Program in 2015, dedicated to Spain's role in EU-Ibero-American relations.

 

In his speech, he highlighted the increase in the confidence index of Brazil's industrial sector, which, after the drop caused by the start of the pandemic and confinement, has grown up to 120% in relation to the months of April and May.

 

The seminar concluded with some farewell words from the Brazilian Ambassador to Spain, Pompeu Andreucci Neto, who expressed his “happiness at seeing what is happening in the economic relations between Brazil and Spain, the enthusiasm, enthusiasm, willingness and drive that mark a very special relationship” and that will offer “great possibilities in 2021 with transparency, ease of business and a very favorable environment.”