# Global Credit Crisis Won't Halt Brazil Infrastructure Projects



## hkskyline (Sep 13, 2002)

*Brazilian president: Global credit crisis won't halt nation's big infrastructure projects *
18 September 2008

SAO PAULO, Brazil (AP) - Brazil's president pledged Thursday that the global credit crisis won't stop big Brazilian infrastructure projects, despite steep domestic stock losses and a sharp decline in the nation's currency.

Luiz Inacio Lula da Silva, attending the inauguration of an oil production platform for state oil company Petroleo Brasileiro SA, said work will continue on Amazon hydroelectric dams, sewage systems for Rio de Janeiro's slums and highways cutting through the jungle.

"We won't allow the paralyzation of any big infrastructure project we're working on in this country," Silva said.

Brazil plans to spend US$296 billion on infrastructure in the next two years to lift industry and exports, create jobs and speed the country's transformation into a world economic power.

Billions more will be devoted to a Petrobras spending spree to tap newly found deep-water reserves and turn Brazil into a major oil-products exporter.

Silva did not say how credit, now drying up around the world, will be found to guarantee the new projects, but said Brazil's financial picture is much better than during previous international economic upheavals.

Petrobras chief executive Sergio Gabrielli added that "sustainable projects will always find lenders," even in an environment of tighter credit, according to the private Agencia Estado news agency.

Brazil has set aside about US$207 billion in foreign reserves during the economic boom of the past five years, giving it "an important cushion so we can confront this crisis," the president said.

Brazilian banks are also well capitalized, but the global credit crunch could prompt Brazil to reduce its 2008 economic growth forecast of more than 5 percent to around 4.5 percent, said Luciano Coutinho, president of Brazil's National Development Bank.

"Brazil has the conditions to grow based on the domestic market," Coutinho said, according to Agencia Estado.

Silva also insisted that Brazil is better insulated from a sharp U.S. economic downturn than it was in past decades because only 15 percent of its exports now go to America, as the nation sends more agricultural goods, iron ore and other products to Asia, Africa and the Middle East.

"I am convinced Brazil will be a nation that will suffer very little if there is a deep recession in the United States," Silva said.

After three days of sharp losses, Sao Paulo's Ibovespa stock index rose 5.5 percent to 48,428 as investors started betting that Brazilian shares had turned into bargains after being severely battered this week by fears that emerging markets had become too risky.

But Brazil's currency, the real, fell 3.2 percent against the U.S. dollar and reached the 1.9-to-the-dollar level for the first time since June of last year.


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