You may or may not like them. You may agree with their ideas and conducts or not. But the fact remains that the two men who preceded Dilma Rousseff in the Presidency of the Republic can say that they have a legacy to offer to the country. From Fernando Henrique Cardoso, the biggest heritage was control of the inflation and stabilization of the currency, cornerstones of any economy. Luiz Inácio Lula da Silva ends his eight-year term boasting a resumption of growth, with creation of jobs and reduction of poverty. What about president Dilma Rousseff, what should we expect from her? In a country that continues to present huge challenges in all fields – from the shameful delay in education to the generalized corruption in politics, to remain in the economic area, the right choice would be the inauguration of a period that may be marked as the Era of Competitiveness.
Brazil continues having the comparative advantage in various sectors, especially in those in which it is able to combine its favorable natural conditions with a good productivity. The big question to be answered is up to which point is this sufficient to take us to a condition of prosperous country. For a growing number of companies, the global competition has become increasingly difficulty. This is a scenario that is present in the dispute for foreign markets as well as in the competition to meet a domestic market avid for consumption. This is what happens in various fronts of the manufactured good industry, ranging from toys to clothes and even autoparts and chemical products. The strong real was responsible for eliminating the difficulties of many strong sectors to face competitors, especially the Chinese.
Until recently, the devalued currency served as a type of compensation for a series of Brazilian deficiencies, from the Kafkaesque bureaucracy to the choking of the ports. Without this protective cover, the so-called Brazil cost was left wide open — and a growing number of companies show that it is becoming unbearable. Protectionism may seem to be the easiest path to be tread to protect one of the most complex industrial parks of the Occident. But we have already seen this film in the past – and the end is not a happy one. Dilma is taking over at a time when it becomes clear that Brazil will have, once and for all, to attack its own deficiencies instead of protecting the foreign competition.
IT IS EXPECTED THAT DILMA CHOOSE THE CORRECT PRIORITIES - AND ATTACKS THE PROBLEMS HEAD ON. HER LEGACY MAY BE A MORE COMPETITIVE, MORE PROSPEROUS AND FAIRER COUNTRY
The latest global competitiveness report, disclosed by the World Economic Forum, places Brazil in a modest 58th position among the 139 countries analyzed. Problems like cost and difficulty to hire and dismiss employees (96th place), lack of security (93rd) and the sufferable quality of education (106th) place Brazil behind nations that are much less developed, like Indonesia and the Republic of Azerbaijan, which occupy, respectively, the 44th and 57th position in the general ranking. Chile, the best in Latin America, is in 30th place. The Brazilian rank is not just an embarrassing performance for the eighth economy in the world. It is a swampy barrier for the country on its way toward its advancement. “Brazil built a very solid base for growth in the last two decades, but serious problems still have to be dealt with, like the government's lack of efficiency", states the economist Irene Mia, director of Global Competitiveness Center of the World Economic Forum. "The structural fragilities are bottlenecks to long-term growth and must be treated with priority by the new president."
The loss of competitiveness caused Brazil to start suffering from a process of deindustrialization that can be worsened in the coming years. An example of this phenomenon can already be seen in the aluminum chain of production, in which we have, theoretically, everything in our favor: raw material, electric power and consumer market. In recent years, one of these ingredients, power, went from being an advantage to a disadvantage. Brazilian electricity costs double the average in industrialized countries, mainly due to the tax burden inlaid in the rates. The difference has led companies to review their strategies for the country.
In the beginning of December, the Indian company Novelis, manufacturer of rolled aluminum products, decided to close the plant in Aratu, in Bahia, due to the high operational costs that caused the unit to work in the red since 2009. Another company from the field, the Canadian Rio Tinto, is studying the opening of an aluminum plant in Paraguay, where power is cheaper, although it is produced from the same source that supplies a fifth of Brazil, the Itaipu plant. The idea would be to process Brazilian ore in the Paraguayan plant and then send the processed product here. To keep Brazil from being turned into this, a mere supplier of input and consumer of the final product, it is expected that Dilma choose the correct priorities - and attacks the problems head on. Her inestimable legacy may be a more competitive, more prosperous and fairer country.
The Frenchman Hugues Corrignan arrived in Rio de Janeiro in 2006, right after the announcement of the discovery of the Tupi field. A mechanical engineer specialized in research and in the prospecting of oil and gas, he had a managerial position at the French company Technip, one of the biggest in the world in the development of technologies for the sector. In August 2010, Corrignan took up the position of director in the affiliate of British oil company BG and the responsibility of creating a new technology development center in the country. Since he is a professional with rare background and experience I the local market, the salary proposal was high. So high that he prefers not to even mention the percentage increase he received. Corrignan has the goal of hiring 20 professionals specialized in areas like geophysics, geology, well and reserve engineering. Half of the team will be made up of foreigners. Partly because it is BG's policy to promote its talents and make them circulate in the world. However, it is also because BG knows that Brazilian professionals with this type of background are few and highly disputed.
Corrignan is writing a new chapter in the history of immigration in Brazil. During the 19th and 20th centuries, it is estimated that almost 5 million Italians, Germans, Japanese, Arabians, just to mention a few nationalities, set foot in the country. They were mostly humble people who, in search of a new life, created the foundations for the agricultural and industrial expansion we see today. The current cycle, however, is quite different. In the Ministry of Labor, the number of authorizations granted to foreigners to work in Brazil has passed from 25,000 in 2006 to 43,000 in 2009. The total in 2010 is estimated at 46,000. More than 95% of these professionals have complete higher education or technical specialization, which signals a strategy behind Brazil's current immigration policy. In the 21st century, when innovation, research and development of new technologies are the starting points for development, there is no country that does not want to attract the best brains. The United States created one of the most restrictive immigration policies in the planet, but each year, it grants visas to 1 million immigrants with above-average qualification.
The movement also reflects the new economic order generated by the crisis. With Europe and the United States skidding, professionals with good backgrounds and without chances of rising there want to come here, where there is robust growth. This year, companies specialized in hiring executives, like Fesa and Korn/Ferry, were bombarded by applications from foreigners interested in working in Brazil. Among them is the American Michael Byrne, aged 31 years. Byrne's résumé has international relations from the American University, Washington, regarded as one of the best courses in the world in this field, and an MBA in management from the Thunderbird School of Global Management, Arizona, elected by the highly reputable English newspaper Financial Times as one of the ten best business schools worldwide.
Even thus, he remained unemployed for four months in San Francisco until he decided to seek opportunities in Brazil. He spent the end of the year being interviewed in the São Paulo capital.
The march of the best toward Brazil, however, denounces a serious distortion in the formation of local labor. Marcos Cintra, vice-president of Fundação Getulio Vargas, is one of the experts who has called attention to the problem. Cintra reminds that there are currently 1.3 million unemployed Brazilians, 56% of which have higher education. These people have degrees in saturated areas, like law, or from institutions of doubtful competence. Meanwhile, professionals from the scientific areas and exact sciences, like engineering, one of the most demanded professions in the coming years. Brazil graduates 32,000 engineers per year. It would need triple this number. Another area already being choked due to the lack of personnel is information technology. It is estimated that, in São Paulo state alone, there are 100,000 open vacancies. Foreigners are not just coming to complement the taskforce of qualified professionals in Brazil. They compensate for their lack. Likewise last year, we welcome them because we need them once again. As for Brazilians, they must become aware that the job market is becoming increasingly more sophisticated – and that only a drastic reform in education can make the new generations of Brazilian able to dispute vacancies with professionals the caliber of Corrignan and Byrne.