48 2015 • The total loss of confidence on the part of companies with respect to government policies has fundamentally inhibited investments – the Entrepreneurial Confidence Index has never been so low, according to CNI and FGV. • Exchange. The Government uses the dollar exchange rate to control inflation, and a devalued dollar had a negative impact on the balance of trade. • Very high interest rates. The Government also uses SELIC rate to fight inflation. • Frozen administered prices. Fuel, electric power, public transportation fares. • Labor legislation that hampers relations between employee and employer. • Outrageous tax burden and complex collection system, resulting in the maintenance of high costs with personnel for the fulfillment of the obligations. • Large decline in mineral, agricultural and oil commodity prices. We should not blame it on the Government – these are implied by an international situation. • Scandals involving Petrobras – contractors work stoppage. • Impacts of drought in the Southeast –infrastructure not planned in advance. • Inability of the federal Government to reduce expenses. • Large decline in government revenue. It can be seen that there are many and extensive negative impacts. Extreme tough adjustment measures are being taken to achieve a primary surplus of 1.2% of GDP for 2015 – a target set by Minister Joaquim Levy – in order to eliminate the huge fiscal deficit of US$ 91.3 billion. For 2016, we expect a primary surplus of 2% of GDP. The first round of spending cuts, reduced subsidies and increased revenue, completed this February by Minister Levy, is part of a fiscal adjustment package of US$ 111 billion. These measures will be enough to achieve a primary surplus of 1.2% of GDP in 2015, as the Minister believes. Just the potential cut in the ministries reaches BRL 57.544 billion. We, industrial executives, need to be united more than ever through the CNI and our Industry Federations, and fight desperately for our economy to regain stability, without being imposed measures that could destroy us. What about the future? In an economy with so many uncertainties and yet aggravated by problems involving corruption and the disagreement between the Legislative and the Executive, making predictions is very difficult or even impossible. However – and regardless everything – the country is not going bankrupt. Brazil is today one of the richest countries in natural, mineral and agricultural resources (harvest of 200 million tons of grains), with the world’s greatest water supply and good technology, production capacity and a domestic market with 200 million consumers. In the past, the country has already overcome many other crises and we hope, and we are even sure, that we must overcome this crisis, and that in 2016 the economy will restart giving signs of growth. The Federation of Industries of the State of São Paulo (FIESP), in a meeting with the Minister and President of the Chamber of Deputies, we made it clear that we are willing to cooperate with the Government in the composition of the Fiscal Adjustment, but the Government must play its part by cutting expenses, such as reducing the number of Ministries and staff, non-productive investments and others. It is often said that God is Brazilian. So we hope that, this time, He will prove it to us.. Artigo Article
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