Multinationals increase investments in the country
O Estado de S. Paulo
Brazil will stay with 3.4% of the flow of global good investment this year - the highest rate of the decade. Multinationals are bringing the country US$ 38 billion to erect new plants and invest in infrastructure. But even that will not offset the damage in the external accounts, which may get to US$ 49 billion. The volume of foreign direct investment (FDI) in the country foreseen for 2010 exceeds the US$ 25.9 billion in 2009 and resumes the level of 2007. It is only below the US$ 45 billion record of 2008. In relative terms, however, the performance was better only in the privatization period. In 1997 and 1998, the country attracted 3.9% and 4.1% of the direct investments in the world.
Foreign investment in the production amounted to US$ 3.73 billion in November, the second best result for the month ever. The stronger inflow of productive capital in the recent months caused the BC (Brazilian Central Bank) to elevate the projection of FDI for 2010 from US$ 30 billion to US$ 38 billion. The strong pace of the economy, which was little hit by the crisis, worked as a magnet to the multinationals. "With the still retracted flow of capital and the headquarters of the companies repatriating resources, it is an excellent result", said Luis Afonso Lima, President of the Brazilian Society for the Study of Transnational Companies and Economic Globalization (Sobeet).
Another relevant factor is the poor overall performance caused by the incipient recovery of the USA and Europe. US$ 1.1 trillion in productive investments should circulate around the world this year, the same level of 1999 and way below the US$ 2.1 trillion peak achieved in 2007. According to the United Nations Conference on Trade and Development (Unctad), the global flows will only recover the lost ground in 2015.
Because of the crisis, the origin of the capital has changed. Switzerland (16.9% of the total), the Netherlands (12.3%) and Austria (8.9%) are standing out. Companies use subsidiaries to take advantage of bilateral agreements and to protect their investments. Analysts believe a good part of such funds come from Asia. Good part of the investments is directed to the sectors of natural resources. From January to November, agriculture, mining and oil were responsible for 43% of the total, compared to 27% in the same period of 2009.
Despite the excellent performance, for the first time, the FDI will not make up for the current account deficit caused by the increase in the consumption and in the imports. For Antonio Correa de Lacerda, of PUC-SP (Pontifical Catholic University of São Paulo), should nothing be done, the damage be twice as big and get to US$ 100 billion in 2012. "The speed of deterioration is impressive." He warns the FDI is "complementary" and that the Government should continue encouraging the investment of the local companies.