Why this is important to Wisconsin businesses: The regulatory reforms are welcome news for firms wishing to bid on government projects.
Last month, Brazilian President Michel Temer met with executives from major U.S. companies in New York City to present his new infrastructure program and the reform agenda proposed by his government. Temer and his team also met with market analysts, bank directors and representatives of credit rating agencies over lunch.
Temer was accompanied by ministers Henrique Meirelles (finance), José Serra (foreign affairs), Maurício Quintella (transport) and Fernando Bezerra (mines and energy), as well as Moreira Franco, executive secretary of the Investment Partnership Program.
The government has made some changes to the bid process. From now on, bidding will only begin after a public period and after approval by the Federal Court of Audits. Another change is that requests for bids will be published in both Portuguese and English to help attract foreign investment. In addition, the bidding period will be extended to 100 days, to attract a greater number of investors willing to participate.
The measures are part of Project Grow—which in turn is part of the Investment Partnerships Program—and aim to engage the private sector to improve the quality of services with 25 projects in transport energy and sanitation, with additional goals of generating jobs and returning Brazil to economic growth.
The meetings in New York City served not only for the new Brazilian government to present its initiatives, but also to hear the concerns of the American business sector—for example, changes in Brazil’s regulatory system that would help attract investment, showing that the environment in Brazil has legitimately changed, leading to opportunities for U.S. investors and exporters.
In addition to regulatory reforms, the Brazilian government has committed to an agenda of fiscal and structural reforms. It has announced for 2017 a social security reform plan and a proposal to limit the rate of increase in government spending to the consumer-price inflation rate from the previous year. New management is in place at state-owned companies such as Petrobras and BNDES, strengthening their governance as well.
The market so far has responded positively, resulting in a decrease in uncertainty about the future of the Brazilian economy. Since the time of Olympic Games, optimism has returned to the retail and industrial sectors. During the most recent IMF meeting, forecasts for the Brazilian economy were also more positive than in April, reiterating the feeling that Brazil has bottomed out and is now beginning to ascend.