Foreign investment breaks record
Folha de S. Paulo - 11/29/2007
Pushed by the trend of mergers and acquisitions that has been intensifying in the international market, the volume of direct foreign investment received by Brazil this year is the greatest ever registered by the statistics of the Central Bank of Brazil. The amount exceeds the values seen in the decade of the 90's, period in which the privatizations pushed those numbers upwards. Up to yesterday, the flow of investments in 2007 was at US$ 33.4 billion, twice what was seen in the same period of 2006. According to the BC, foreign investments may exceed US$ 35 billion until December. Up to now, the greatest inflow of foreign investments in Brazil had occurred in 2000, when the country received US$ 32.8 billion from companies headquartered abroad. From this total, US$ 7 billion had come from privatizations such as Banespa's, which gave the government nearly US$ 3.7 billion in profits. This time, the result is influenced by mergers of large corporate groups that take place in other countries and affect their Brazilian branch offices. One of the examples is the merger of the European Arcelor with the Indiana Mittal Steel that resulted in the creation of the largest steal company of the world, ArcelorMittal. The new company acquired the full control of Arcelor's Brazilian branch, which meant the inflow of nearly US$ 5 billion in the country. Even taking into account the influence these large operations have on the statistics, the head of the Economic Department of the Central Bank, Altamir Lopes, says that the greater inflow of investments also reflects a greater reliance of the international companies in the Brazilian economy. The steel and mining companies and banks were the ones that most received investments this year. The service industry got 45.6% of the resources that entered the country from January to October; the industries received 39.7%, and the rest was invested in agriculture and mining.