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SECRETARIA MUNICIPAL DE FAZENDA City Finance Department An Investment Grade Future for Rio April, 2011 Rio Momentum 1 Global Events Rio + 20 Confederations Cup 450th Anniversary of the city 2010 2011 2012 2013 2014 2015 2 Global Visibility © Rio Business: Official Agency of Rio de Janeiro City Hall, responsible for attracting and facilitating inward investments 2016 Reasons for Rio’s turnaround Increasing public awareness, reflection and mobilization Along with macroeconomic stability the oil boom is bringing a remarkable boost to the local economy Policies to spread the benefits for future generation Both at state and municipal level we are observing the adoption of appropriate public policies, marking an important difference from the past For ordering, please contact: [email protected] Economic Indicators The City has strong economic indicators, being responsible for both 45% of the State’s GDP (USD 187 bi) and ¼ of the FDI in the country Rio vs. BRICs (Per Capita Income USD ppp¹) Investments of States (% of net current revenues) 15.0% 15,100 14.3% 12.7% 12,600 11.8% 10.1% 10,100 6,600 5.1% 3,100 Russia Rio Brazil China India RJ PE SP BA MG PR Real Income (R$) – City of RJ Unemployment Rate (%) 1,955 SP BR 10.5 10.0 BH RJ 1,741 8.5 1,668 7.0 6.7 6.6 5.5 1,564 1,516 2007 2008 2009 2010 1,580 1,506 5.1 2006 1,784 2003 2004 2005 2006 2007 2008 2009 2010 ¹Purchasing Power Parity ; Sources: IBGE,CIA World Factbook , PME, CAGED, LRF Research © Rio Business: Official Agency of Rio de Janeiro City Hall, responsible for attracting and facilitating inward investments What we have done so far (2009) Strong Fiscal Adjustment Primary surplus of US$ 700 million (12% of Total Revenues) • Review of all contracts, reduction of at least 20% in expenditures of goods and services + 30% with commissioned staff (higher earners) • All investments were also re-evaluated and new priorities were set Strategic Planning Thinking Rio in 2020 Project Management Office Implementation of a performance-base model MERITOCRACY Improving Business Environment Comprehensive program to reduce bureaucracy Formalization of business and attraction of investors New Investment Agency: www.rio-negocios.com For further information: www.pcrj.rj.gov.br What we have done so far (2010) FISCAL SUSTAINABILITY Fiscal Transparency Report (*) 30% increase in Total Revenues US$7.5bn in 2009 to US$11.6bn projected for 2011 (54% increase) Improvement in Collection Systems US$1bn World Bank Loan www.notacarioca.rio.gov.br -> Expanding Rio de Janeiro’s investment capacity: US$ 468.7mm in 2009 budget to US$2.2bn in 2011 INVESTMENT GRADE (Moody´s) (*) Available at http://www.rio.rj.gov.br/web/smf World Bank Loan First DPL (Development Policy Loan) to a Municipality in the world Total Amount: US$ 1.045 billion in two tranches to be repaid in 30 years Estimated gains of US$ 1.25 billion to be used in new investments Cost of debt with Federal Treasury reduced from IGP+9% to IGP+6% Three Strategic Pillars: Fiscal Responsibility Enhancing public services Improving Municipal Management IGP = inflation index. Improvement in Expanditure Profile Portfolio Investments 0.8% Investments 3.7% Debt Repayment 3.5% 2009 Other Current Expenses 27.9% Staff 57.8% Debt Interest 6.3% Portfolio Investm ent 0.4% Debt Repaym ent 9.3% Investm ents 10.9% Staff 46.8% 2010 Other Current Expenses 28.2% Debt Interest 4.4% Investments x Total Budget In US$ Millions YEAR INVESTMENTS [A] TOTAL REVENUES [B] % [A]/[B] 2005 348.3 4,882.0 7.1% 2006 426.6 5,439.8 7.8% 2007 545.5 5,946.6 9.2% 2008 527.1 6,847.3 7.7% 2009 250.4 7,292.0 3.4% 2010 975.1 9,527.0 10.2% 2,193.8 11,790.9 18.6% 2011 * * LOA 2011 (Budget Law 2011) Source: City Hall Investment Grade Baa3 with a positive outlook (from Ba2 with a stable outlook) Sustained record of positive trends in Brazil's operating environment Strong track record of city’s financial performance Resilience to the economic downturn in 2009 Prudent fiscal management Improvements on tax administration and expenditure controls Predictable and stable intergovernmental transfers Source: Moody´s report, December 2010 The "Marvellous City" wants to show its potential to the world The arrival of international events and infrastructure improvements means that more business opportunities are being developed in Rio de Janeiro Bringing perspective and positive outlook for new investments Now it is Rio's time. And that time is today… May 30 and 31, 2011 Copacabana Palace Hotel EVENT FORMAT 12 sector panels of different segments of the Brazilian Economy moderated by some of the most prestigious "sell side" analysts from each of the specific sectors plus: • Meetings in individual rooms with the Master Sponsor Companies • Meetings among the Standard Sponsor Companies and institutional investors • Presence of representatives from the highest Ministerial level from President Dilma Rousseff new government (including Her Excellency and her economic staff) are invited to speak during breakfasts, lunches and dinner: • • • • Mr. Alexandre Tombini, President of the Central Bank of Brazil Mr. Luciano Coutinho, President of BNDES Mr. Henrique Meirelles, President of the Olympic Public Authority Ms. Maria Helena Santana, President of CVM MASTER SPONSORS • • • • • • • • • • • • • • • BM&Fbovespa Bradesco Braskem Cetip Grupo EBX ICAP Corretora Itaú-Unibanco Light Multiplan Oi (ex-Telemar) PDG Petrobras Société Générale Vale Vivo STANDARD SPONSORS • • • • • • • • • • • Ambev Aliansce NEO Energia Queiroz Galvão Exploração e Petróleo Santander São Carlos Empreendimentos Souza Cruz Sul América Tim Tractebel Energia Usiminas Eduarda Cunha de La Rocque Secretary of Finance Tel: +55 21 29763500 [email protected] Thank you Rio, the best place to live and work of the Southern, I do believe!