Brazil can increase exports, says IDB

Brazil has all the prerequisites to transition from being an importer to becoming a major exporter. Mauricio Claver-Carone, president of the Inter-American Development Bank (IDB), affirmed in an interview with Estadão.

For him, as the largest economy in Latin America, Brazil can be one of the main beneficiaries of what he calls nearshoring. The goal is to bring back to the region the production that has been exported to other parts of the world, particularly Asia, in recent decades, in search of cheaper labor and a more favorable economic environment.

IDB conducted studies to identify nearshoring opportunities in Latin America and the Caribbean. According to the president of the IDB, there are 98 possibilities in Brazil, ranging from medical products to software development and wind turbines. “It’s a fantastic opportunity,” he assures. According to Carone, Brazil could begin exporting 50% of what China currently sells to the world’s largest economy. “We’re talking about a yearly rise of US$ 10 billion (about R$ 47 billion) from Brazil to the United States alone.”

A unique location

According to the first North American to lead the IDB in 61 years, Latin America’s largest economy has everything it takes to house local manufacturers of these items. He emphasizes that the country possesses a diverse range of natural resources and its size and cost competitiveness. It also benefits from having the same time zone, shorter distances, and cultural similarities to its neighbors. “Brazil is a one-of-a-kind location for which you must be prepared. We can do the same thing in the commodities sector and fill the void created by Russia.”

Alongside mineral commodities, the food sector stands out in Brazil, emphasizes Carone. He acknowledged that Brazil is experiencing a fertilizer crisis and stated that he is working on solutions with the National Bank for Economic and Social Development (BNDES).

“Brazil’s food production is key to dealing with the present economic crisis. However, it has to deal with the fertilizer issue first. Brazil is the world’s largest importer of fertilizers and buys a lot from Russia. We are looking for new financial instruments and competitive pricing with Canada to bring production through September.”

The American admits that this production transfer has been his “obsession” since he took charge of the bank in October 2020. Moving part of the production to distant places, according to him, was a mistake made evident during the pandemic and, now, with the war in Ukraine.

However, Carone concedes that nearshoring won’t become a fact with mere desire. According to him, the IDB allocated over US$ 4 billion (around R$ 19 billion) to the process last year. The governments spent half of the funds on improving logistics and minimizing bureaucracy.

Source: Jornal de Brasília

To read the full original article, please go to:

https://jornaldebrasilia.com.br/noticias/economia/brasil-pode-aumentar-exportacoes-diz-bid/

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