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Bahia Basics facts

Predictability, good regulation and respect for contracts.


Bahia is a new growth engine
China leadership role in the world economy
• Asia Leading the Way.

• The recent crisis has underlined the emergence of Asia as a


global economic powerhouse.

• China and India are leading the way, but the phenomenon
is by no means limited to these two countries. Asia’s
economic importance is unmistakable.

• Within five years Asia’s economy will be about 50 percent


larger than it is today, account for more than a third of
global output, and be comparable in size to the economies
of the United States and Europe. By 2030, Asian gross
domestic product (GDP) will exceed that of the Group of
Seven major industrial economies (G-7).
BAHIA INFRASTRUCTURE PROJECTS
Bahia Challenges & Opportunities
Bahia Infrastructure sector offers profitable opportunities for trade partners. Many
projects are available and our mission is offers the opportunity to get involved.
Global Development 2010: Shifting Wealth
Perspectives on Global Development 2010
The dynamics of the global economy over the last 20 years, and the
impact of the economic rise of China and Brazil, highlights the
increasing interactions between our countries through trade and foreign
direct investment.

As of 2008, developing countries were holding USD 4.2 trillion in


foreign currency reserves, more than one and a half times the amount
held by rich countries.

These are just a few examples of a 20-year structural transformation of


the global economy in which the world’s economic centre of gravity has
moved from OECD members to emerging economies, a phenomenonal
“shifting wealth”.

Although the process has been ongoing for 20 years, the opportunities
for our countries are only starting to be understood.
Potential gains from China-Brasil trade
• Global recovery has advanced: Activity in emerging
economies has been sustained by strong domestic demand
and the recovery of global trade.
• Major economies in Asia — China, India— remain in the
lead, followed by Brazil in Latin America.
• China’s rapid economic growth since 1978 has resulted in a
doubling of the country’s GDP every 7–8 years.
• Accompanying, and contributing to, this rapid growth has
been a significant expansion in China’s external trade. The
large economy has grown fast and has become increasingly
and quickly integrated with the world economy.
Brazil is a relevant market for any global player in infrastructure.

Brazil is one of the most attractive markets for infrastructure in the World today thanks
to favourable macroeconomics, a competitive infrastructure sector developing fast.

Macro-economics: 4% stable projected GDP growth, an increasing population (close to


200 millions people), being one of the main recipient of forign direct investment
worldwide and a rapidly increasing motorization rate, shape a bright future.

In Brazil northeast, the Bahia state is moving forward, with a lot of projects in railways,
roads and ports. There are local and international players and a stable legal framework
allowing an increasing number of projects being tendered.

The government Accelerated Growth prgram (PAC) is making progresses. With


investments of more than US$500 billons planned in the period 2011-14. Opportunities
for investment in infrastructure in Brazil exist mainly in roads, railways, aiports,
stadiums and energy. The fact that Brazil will host the two premier world sports events,
FIFA World Cup 2014 and Olympic Games 2016 is pushing all this infrastructure
development.
This trade could be one of the main
engines of growth over the coming decade.
The OECD suggest that, were southern
countries to reduce their tariffs on southern
trade to the levels applied between
northern countries, they would secure a
welfare gain of USD 59 billion.

The direct channels of interaction between


China and Brazil – such as trade and foreign
direct investment (FDI) – have been
intensifying. Between 1990 and 2008 world
trade expanded almost four-fold, but South-
South trade multiplied more than ten times.
Developing countries now account for around
37% of global trade, with South-South flows
making up about half of that total.
A win-win situation?
• Improvements in the range and quality of exports, greater
technological dynamism, better prospects for doing
business, a larger consumption base – all these factors can
create substantial welfare benefits for the whole world.

• That is not to deny the challenges. Environmental


sustainability, growing levels of inequality within countries
and increased competition are three significant issues raised
by shifting wealth. The birth pains of this new economic
world order have also been accompanied by enormous
global imbalances. These challenges have come to the
forefront during the economic crisis, but have been building
over the last two decades. Despite these challenges, the
overall picture is a positive one for development.
Economic policies targets should be:
• Development strategies to cacth the opportunities of shifting
world.
• promote foreign direct investment, learning the lessons from
successful clusters and Export Processing Zones and using
investment links to achieve technological upgrading through
national innovation systems;
• ensure appropriate revenue management policies in
resource-rich economies and contemplate using sovereign
wealth funds to promote growth and investment in the
domestic economy;
• respond to the growing demand for agricultural exports to
improve agricultural productivity, through greater support to
R&D and extension services, and technological transfer.
International Trade Flows
Brazil - Merchandise Exports by Region

In 2009 China became the leading trade partner of Brazil.


Strategic Logistic and Transport Plan
BAHIA INFRASTRUCTURE PROJECTS
Commodities leads the way
! "

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( $) $
Iron Ore Reserves: the importance of China to Bahia

Trade could be one of the main engines


of growth over the coming decade.
Bahia East-west Railroad
Bahia Port to Central Brazil

Extension: 975 km

Total Value: R$ 4,8 billions

Term: 2011

China is the largest developing country


outward investor with an investment
stock estimated at more than USD 1
trillion.

South-South FDI has also increased.


Intermodal Transport System
Railway, Port and Airport
SISTEMA PONTE SALVADOR-ITAPARICA / BR-116 / BR-101 / BR-242
Intermodal Transport System
Port - Airport - Railway - Roads
Incentives for direct investment (FDI)
•Market and supplier access are the main factors affecting
investments entry. Also the access to customers and
suppliers of inputs are key determinants of FDI inflows.

•Our Governments spend large sums of money to entice


foreign direct investment (FDI), offering generous tax
incentives. We believe that foreign firms will generate
positive externalities on domestic firms.

•The State fiscal Programs: Desenvolve and Probahia


support with tax isention the atraction of foreign direct
investment (FDI).
Free Tax Areas
ZPE Zonas de Processamento de Exportação
World Cup 2014
The Brazilian Strategy

* %

•The sense of urgency created by the advent of the World Cup in 2014 and the Olympics in 2016
can be very positive for Brazil as this stirs the public and private sectors to carry out badly
needed infrastructure investments.
+ * %
World Cup 2014 Stadium
• The project is under progress as Private Public Partnership
(PPP) to build and operate a new World Cup 2014 stadium.
• The stadium will feature seating for 50,000.
• Transportation, energy, sanitation, and other infrastructures
of the project will be developed to meet international
standards.
• Hosting of the World Football Cup in 2014 and the
Olympic games in 2016 will stimulate much response, the
construction of roads, airports, and stadiums.
Why Invest in Bahia?
The choice of majors industrial leaders:

• Ford Motors Automotive Complex: U$ 1,9 Billion investment.


Production capacity for 250.000 vehicles / year.

• Paper and Pulp Industry: Investments of more than U$1,5 billion over
the last 5 years

• Oil and Gas Industry: New oil discoveries raising Brazilian reserves
from 14th place to 4th place in the world.

• The World Bank predicts that if Brazil continues on the path it is on


now, it will move from being the tenth largest economy in the world
today to the fifth largest by 2016.

• The sense of urgency created by the advent of the World Cup in 2014
and the Olympics in 2016 can be very positive for Brazil as this stirs
the public and private sectors to carry out badly needed infrastructure
investments.
Oil Industry Investments
•Brazil has 12 billion barrels of proven oil reserves, the
second-largest in South America after Venezuela.

•Petrobras has the world’s largest capital expenditure


programme, worth $220 billion over the next five years.

•The discoveries of oil made by Petrobrás have made it ease to


forget that Brazil is already the world´s largest exporter of
coffe, sugar, chickens, beef and orange juice. It also exports
vast amount of soya and iron ore, as well as other ores and
metals.
This presentation summarizes Bahia'
s economic prospects.

The state'
s future looks bright; but it will require lots of hard work and
leadership to bring the less fortunate people out of poverty.

Governo do Estado da Bahia

Secretaria de Planejamento
Romeu Temporal
Economic Adviser
Logistic Multimodal Transport Plataform
Infrastructure sector offers profitable opportunities for trade partners. Many projects are
available and our mission is offers the opportunity to discover how to get involved.
Juazeiro Logistic Plataform
• Juazeiro has a privileged geographical location in the center
of brazilian northeast, and the radial connection around
Juazeiro in addition to its network, facilitate the transport of
merchandise and favors the intermodal infrastructure.

• Nearby Petrolina has a good intermodal infrastructure and


facilities that connect with those of Juazeiro. Together, the
two interact synergistically to create a logistic platform.

• Platforma Logística do São Francisco is a PPPI project to


convert Juazeiro into the largest logistic platform in the
Brazilian Northeast.