200101PRI-Brazil Towards a Sustainable Growth Path-Arminio Fraga (1)
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Transcript of 200101PRI-Brazil Towards a Sustainable Growth Path-Arminio Fraga (1)
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2
Overview
1. Recent Developments
2. Longview I: Macro Reforms
3. Longview II: Structural and Micro Reforms
4. Growth Prospects
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3
1. Recent Developments
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5
Fiscal Performance
Flows in 12 months, based on the GDP reviewed on October 2000
Public Sector
(+) deficit (-) surplus
%G
D
P
-6
-4-2
0
2
4
6
8
10
12
14
16
Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Nov
95 96 97 98 99 00
NominalDeficit
Primary
Surplus
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IPCA
1
2-monthvariatio
n
(%)
Consumer Prices
0
5
10
15
20
25
Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Nov
96 97 98 99 00
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7
Exchange Rate
R$/US$
1.20
1.40
1.60
1.80
2.00
2.20
Jan
99
Mar May Jul Sep Nov Jan
00
Mar May Jul Sep Dec
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US$billion
/* (+) deficit
Current Account and FDI
Current account deficit * FDI
12-month variation data
0
5
10
15
2025
30
35
40
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Nov
98 99 00
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10
External Debt / Exports
300
350
400
450
500
550
1995 1996 1997 1998 1999
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Privatization
State banks reform
Public administration reform
Social security reform
Fiscal Responsibility Law
Fiscal Crime Law
Structural Fiscal Reforms
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%G
DP*
Net Public Sector Debt
/* GDP reviewed on October 2000
Medium-Term Fiscal Scenario
43.41
49.68 49.94 49.28
47.60
40
42
44
46
48
50
52
1998* 1999* 2000 2001 2002
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Efficiency and cost reduction
Enhanced public services
Transparency and social control
Managerial reform: the Avana Brasil
Public Administration Reform
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Private workers mandatory regime
Public service regime
Complementary pension regime
Social Security Reform
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Social Security
Social Security Balance - Accumulated in 12 months(R$ billion)
/* (+) deficit
0
2
4
6
8
10
12
D
ec97
M
ar98
Jun98
S
ep98
D
ec98
M
ar99
Jun99
S
ep99
D
ec99
M
ar00
Jun00
ALT
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0.7
0.9
1.1
1.3
1.5
1.7
1999 2002 2005 2008 2011 2014 2017 2020
%G
DP
Previous Scenario
Post-reform Scenario
Social Security Reform
Private Workers Mandatory RegimeAnnual Deficit ALT
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Inflation Targeting
Focus on inflation
Commitment
Transparency
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3.Longview II: Structural and
Micro Reforms
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Education and health
Global integration
Privatization / competitiveness / regulation
Banking reform
Capital markets reform
Tax reform
Longview II: Structural and Micro Reforms
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Net Ground Schooling Rate
Education
Source: MEC/INEP/SEEC
86 %
89 %91 %
93 %
96 %97 %
1991 1994 1996 1997 1998 1999
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Source:IPEA, based upon PNAD
Iliteracy Rate - Brazil 1990-1998% of population at 15 or more years of age
Education
12
13
14
15
16
17
18
19
20
17.2
14.714.7
15.616.4
13.8
1990 1991 1992 1993 1994 1995 1996 1997 1998
18.3
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Education
Source: MEC
Systems Expansion 1995-1999(enrollment increase %)
Basic education 13 %
High school andtechnical education
College education 28 %
57 %
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Health
Infant Mortality Rate(per 1.000 new-born)
47.845.2
43.041.1 39.6 38.4 37.5 36.7 36.1
1990 1991 1992 1993 1994 1995 1996 1997 1998
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GDP per capita
GDP per capita *1962 - 1999
Source: IBGE
In199
9R$
1999
2.000
3.000
4.000
5.000
6.000
1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998
/* GDP reviewed on October 2000
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170
150
130
110
90
70
50
Minimal wage
Basic basket
Source: PROCON/DIEESE
Price variation of the basic basketvis-a-vis variation of the minimal wage
Brazil 1994-2000
InR$
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Proportion of the poor and the indigentsover the total population - Brazil 1977-1998
13.9
20.725.0
9.8
22.119.5
32.7
51.0
45.342.6
28.2
41.7
0
10
20
30
40
50
60
1977 1980 1983 1986 1989 1992 1995 1998
Indigence Line Poverty Line
Source: PNAD (1977-1998) Preparation: IPEA
%o
ftotalpopulation
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Average Import Tariffs
1990 32.2%
1993 16.5%
1997 13.8%
1999 13.8%
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0
1,000
2,000
3,000
4,000
5,000
6,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Source: ABNT (estimated ADTP)
Certificates Issued
ISO 9000
5,285
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2000 - 2003
Sector Total Investment Private Sector(US$ billion)
Telecommunications 45 100 %
Energy 52 86 %
Oil 54 31%
Transportation 23 52 %
Infrastructure Investments
174 68 %Total
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34* estimated Source: MME
Installed Capacity (GW)
Electric Power Generation
54.155.5
57.3
59.2
61.5
64.5
68.0
1994 1995 1996 1997 1998 1999 2000*
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35* estimated Source: MME
Installed Computers(millions)
Information Technology
2.3
4.0
5.6
6.8
8.3
1995 1996 1997 1998 1999*
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36* estimated Source: MME
Internet Users(millions)
Information Technology
0.2
0.7
1.4
1.8
2.9
3.4
1995 1997 Jan 98 Jul 98 Dec 98 1999
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Mobile Phones(millions)
Telecommunications
*As of May
0.61.3
2.5
6.0
9.2
15.0
17.5
1994 1995 1996 1997 1998 1999 2000*
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Regulatory agencies
Competition policy
Consumer protection
Intellectual property rights
Environmental legislation
New Regulatory Framework
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Supervision / regulation
Payments System
Financial liberalization
Banking reform
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%
p.y.
Average banking spread
Banking Spread
98 99 00
30
35
40
45
50
55
60
65
70
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Nov
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Corporate Law
Accounting standards
Regulation
Capital Markets Reform
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4. Growth prospects
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Openness
Deregulation
Stabilization
Privatization
Summing up
Competition
Investment
Predictability
Efficiency
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Brazil Towards a Sustainable Growth Path:
Stabilization and Consolidation ofStructural Reforms
January 2001