Brasília, January 8, 2004 (Agência Brasil - ABr) - At a meeting which began at 10 A.M. and continued into the night, on Wednesday (7), the Economic Policy Chamber evaluated a series of measures that will be implemented in 2004 to stimulate the generation of jobs and income. The Minister of Finance, Antônio Palocci, affirmed that sectors such as housing and basic sanitation will get special attention, since they "are experiencing real difficulties."
In this sense, alternatives are being studied for investments by both the public and the private sector in basic sanitation. As regards the housing sector, Palocci said that measures are necessary to improve the housing market, which is currently "restricted." Some projects are already before the Congress, and others are being analyzed by experts in the Ministry of Finance, especially when it comes to making more credit available. The federal government also plans to invest in the construction of housing for the low-income population, another strong inducer of employment generation, the Minister affirmed.
At the meeting, which was attended by ten Ministers, as well as Central Bank president Henrique Meirelles, prospects for job creation were outlined with reference to the performance of the economy. Agrobusiness, for example, can open 1.3 million new job positions, if projections for increasing the grain harvest from 122 million to 129 million tons are concretized. "The prospects for agrobusiness are extraordinary," Palocci declared.
The Minister pointed out that the government does not operate with job creation targets but, rather, with feasible projects. Another sector that the government expects to make a strong contribution to job creation in 2004 is the export sector. At the meeting, the Minister of Development, Industry, and Foreign Trade, Luiz Fernando Furlan, reaffirmed the goal of US$ 80 billion for Brazilian sales abroad this year. In 2003, exports attained a record US$ 73 billion.
FOREIGN EXCHANGE
Palocci emphasized that the decision taken by the Central Bank on Tuesday (6) to purchase dollars on the market is intended solely to reconstitute the country's exchange reserves. "We are convinced that the fluctuating exchange rate was good for Brazil," the Minister added. The figures on the economy, he pointed out, show that there has been no loss of competitiveness on the part of the real vis-á-vis other foreign currencies. To the contrary, Palocci underlined that exports grew 21% in 2003, market interest rates are falling, and the stock market is "in a quite favorable situation." Brazil's country risk index is already down to near 400 points, whereas it reached 2,400 points at the end of 2002.
"We should improve productivity, conquer new markets, and advance in international trade forums" to guarantee export growth, instead of tampering with exchange rate policy, he affirmed. "We can't invent the exchange rate," he said, reaffirming the government's commitment to current monetary policy. Palocci used the occasion to reaffirm, as well, the government's commitment to an economic policy that guarantees fiscal control, inflationary targets, and an improvement in the composition of the debt. "No country in the world has sustainable growth and high inflation," he observed.
GROWTH OF THE ECONOMY
"The positive expectations presented by the Ministers at the meeting of the Economic Policy Chamber should assure Brazil an historical opportunity that permits economic growth that is sustainable, not just short-term," the Minister said. The objective is to overcome obstacles that could eventually impede the continuity of this growth process. In this sense, various measures are under study to guarantee, for example, a greater offer of credit, regulatory standards, and incentives for micro and small firms.
