His Excellency Ambassador of Brazil to Japan, Mr. Eduardo Paes Saboia gave a written interview for the magazine ‘Latin America Journal’ of JALAC in its winter 2020 edition published in the end of January. The integral transcript of the interview is as follows:
1. Almost a year has passed since Your Excellency arrived at Japan as Ambassador of Brazil. What is your impression on Japan? What is the most memorable experience to you in Japan?
Anyone who visits Japan is immediately impressed by the high level of organization of the Japanese society and the overall efficiency of this country. Japan has managed to preserve its unique and sophisticated culture in the midst of technological progress. Personally, I was deeply impressed by the Enthronement Ceremony and glad that President Bolsonaro was able to attend it.
2. What is your assessment on the performance and achievement of the Government of President Jair Bolsonaro, which inaugurated a year ago?
The new Administration has been able to start the implementation of an ambitious – and much needed – reform agenda. A few examples of this are the recently approved Pension Reform and several microeconomic measures, including changes in labor laws and simplified regulations to cut red tape and provide businesses with more flexibility. These measures are already bearing fruit, as can be seen by the numbers for the GDP in the third quarter of 2019, which rose by 0.6% in comparison to the previous quarter and 1.2% in comparison with the third quarter of 2018. The Central Bank has lowered benchmark interest rates from 13.75% in 2016 to 4.5% this month – their lowest level ever in Brazil. Inflation is under 2.9% annually and both business and consumer confidence indexes are on the rise. Unemployment rates remains high – around 12% – but is also expected to decrease in the following months. This and other challenges still remain, of course, but the country is definitely back on the tracks.
3. Recently the Brazilian parliament approved the long-awaited Pension Reform, which was indeed a great achievement for President Bolsonaro. Please explain the main contents and political and economic implications of the Pension Reform.
The Pension Reform was a key priority for the new Administration in its first year. It will enable the Government to spare taxpayers the equivalent of 22 trillion yens within ten years and will ensure a sustainable and balanced level of public debt, nowadays at 79% of Brazil’s GDP.
This reform’s ultimate goal is to adjust the pensions system to the new demographics of Brazil, a country in which people are living longer (life expectancy rose from 62 years in 1980 to 76,3 years in 2019) and with shrinking fertility rates (currently at 1.7 births per woman). Its main feature is the establishment of a minimum age for retirement – 65 years for men and 62 years for women – as well as adjustments to the calculation methods for the pensions to be paid.
The approval of this reform in less than one year by the current Administration is a sign of the Government’s strong parliamentary support, especially when we take into account that the bulk of the reform was done through a Constitutional amendment, which in Brazil requires the votes of 3/5 of the Members of Congress.
4. Could you tell us, following the Pension Reform, which kind of reform measures the Government has presented or is going to present to the parliament in order to reactivate economy?
The next steps in terms of economic reforms have already been outlined by the Brazilian Ministry of Economy: the “Federative Pact Reform”, the Tax System Reform and the Civil Servants Reform. The first of these aims to reorganize the budgetary and fiscal relationship among the three levels of Government in Brazil (Federal, State and Municipal), setting new mechanisms to curb excessive public expending and public debt. It is already being assessed by Parliament. The drafts for the other two reforms are being finalized by the Executive Branch and are expected to be sent to Congress in 2020.
Apart from those broad reforms, the Government is also promoting sectoral reforms, in order to enhance the business environment and promote more competition and openness in key areas, such as the energy sector. A bold program of privatization and public concessions of infrastructure assets is under way. The negotiation of free-trade agreements with key partners – such as Japan – is also among the measures aimed at overhauling and modernizing our economy.
5. Brazil has requested its admission to the OECD to harmonize its economic and social standards with those of the OECD member countries. What motivated Brazil to do so?
As the 8th largest economy in the world, Brazil should take part in all relevant fora where key economic issues are discussed. In this regard, Brazil has developed a strong and deep partnership with OECD along the years, taking part in the activities of several of its committees. Therefore, Brazil already adopts and implements several of OECD’s standards, a fact recognized by the Organization itself. We feel that the time is right for the country to enjoy full membership in the OECD, which, in turn, will help to further promote Brazil’s economic integration with the developed economies in the world.
6. President Bolsonaro stated that Brazil would do away with the so-called ideology diplomacy. What is his basic thinking on diplomatic policy and on priority agenda, particularly in the relations with the United States, China and the Middle East?
The government of President Bolsonaro is working tirelessly to open Brazil’s economy and integrate Brazil into global value chains, on the basis of a solid package of economic reforms. Brazil’s foreign policy is focused on attracting more investments and opening markets for Brazilian exports, in order to create employment and stimulate economic growth. These were the main messages conveyed by President Bolsonaro at the Economic Forum in Davos last January and at the G20 Osaka Summit, last June. In Osaka, I participated in President Bolsonaro’s meetings and witnessed firsthand his determination to create partnerships that can generate investments and trade for Brazil.
During 2019 we have concluded the two largest trade deals in the history of the country, those closed between MERCOSUR and the European Union and between MERCOSUR and the European Free Trade Association, EFTA (Iceland, Liechtenstein, Norway and Switzerland). Negotiations with Canada, South Korea and Singapore have moved forward and we are looking forward to jump start an exploratory dialogue for a Japan-MERCOSUR EPA.
Throughout the year, President Bolsonaro has maintained an extensive agenda of bilateral visits that have resulted in substantive agreements not only in the political and economic arena, but also in science and technology, defense and cooperation, among other areas. These visits have included strengthening relations with the United States, China, Argentina, Chile, Israel, Saudi Arabia, United Arab Emirates, Qatar, to name just a few. In October, Brazil hosted the XI BRICS Summit and the BRICS Business Forum. At the helm of BRICS, Brazil has promoted science, technology, innovation and digital economy as priority areas. In December, Brazil hosted the MERCOSUR Summit, during which significant advances in streamlining MERCOSUR internal processes were achieved. Minister Ernesto Araujo just recently completely a very successful tour of African countries, including Angola, Nigeria, Senegal and Cabo Verde, all countries that are part of Brazil’s strategic surrounding in the Southern Atlantic.
7. As for Mercosur, a leftist government returns in Argentina. Which kind of leadership Brazil intends to take in order to finalize the EPA between EU and Mercosur?
What is the basic stance of the Brazilian Government and the private sector concerning the Japan-Mercosur EPA?
As I mentioned above, the conclusion of negotiations on bilateral trade agreements between Mercosur and the European Union and EFTA in 2019 was a historical landmark. Brazil is committed to expanding its network of free trade agreements with our main trade partners. Negotiations with South Korea, Singapore and Canada are also making progress. Other countries have already expressed their interest in launching trade negotiations with Brazil.
As a traditional partner of Brazil, Japan should not be left out in this process. Brazil hopes that 2020 will mark the launching of a scoping exercise towards negotiations on an Economic Partnership Agreement with Japan. An EPA would upgrade our bilateral relations on trade and investment. The private sector in Brazil and Japan – such as the National Industry Confederation (CNI) and Keidanren – openly support the launching of bilateral negotiations. In fact, we have very complementary economies and a strong interest in expanding trade and investment opportunities.
8. Seemingly Japan and Brazil enjoy very good relationship, as shown by the three meetings in a year between Prime Minister Abe and President Bolsonaro. How do you assess the present bilateral relations? What should be done to further improve the relationship?
The unprecedented sequence of meetings by Prime Minister Abe and President Bolsonaro is indeed representative of the excellent state of our bilateral relations, as is the long list of high-level visitors to Japan in 2019, including several Ministers, the Commander of the Brazilian Army, the President of BNDES, member of Parliament, among many other high level officials.
Brazil and Japan have continued to work together closely on a wide variety of issues, from science and technology to energy, from investment and trade to the environment and technical cooperation. We have also been partners in bringing about reforms to important multilateral organizations, in particular the WTO and the UN Security Council. We are also grateful for Japan’s valuable support in helping combat fires in the Amazon.
In our trade relations, there is a chance for us to take advantage of untapped possibilities. After peaking in 2011, bilateral trade numbers have decreased and remained shy of their potential. Bilateral trade would benefit, structurally, from a clear framework with improved tariff conditions. We see a Mercosur-Japan EPA as an unavoidable step for the recovery and expansion of our trade.
9. The year 2020 marks the 30 anniversaries since many Brazilians of Japanese descendants started to live in Japan. Do you prepare any commemorative events? What kind of role do you expect the Brazilian community in Japan to play?
The 30th Anniversary of the Brazilian Community in Japan represents an opportunity to highlight and reiterate the contributions of Brazilians to the Japanese society as well as to remember and celebrate the human bonds that have united Brazil and Japan for over 111 years, granting a special character to our bilateral relationship. We also want the event to be a catalyst for initiatives that positively contribute to the integration and self-esteem of the more than 200,000 Brazilians who live in Japan, as well as to strengthen their ties with Brazil.
I intend to take part in the celebrations by the Brazilian Community, particularly in the areas with the largest Brazilian populations. In addition, the 30th Anniversary will be featured in many of the Embassy’s initiatives in 2020. Already at the end of January a commemorative stamp will be launched, in a partnership with the Consulates-General of Brazil in Hamamatsu, Nagoya and Tokyo.
Furthermore, we are looking forward to solemn sessions alluding to the 30th Anniversary of the Brazilian Community in Japan to take place in the Brazilian National Congress and in the Japanese Parliament. We will also hold seminars, lectures and exhibitions on the Brazilian Community throughout the year, which will be an opportunity to discuss its future, its challenges and its successes along the last three decades”.
10. Nowadays what attract you most as you carry out your duty as Ambassador?
It is a great honor to serve my country at a time when there are many opportunities for strengthening relations with Japan. Trade and investment are certainly very high on my agenda. Yet it is the human dimension of our relations which fascinates me the most. We have already close human links due to the migration flows that took place from Japan to Brazil more than a century ago and from Brazil to Japan thirty years ago. The Nikkei were able to integrate themselves very successfully in the Brazilian society. The Brazilians in Japan arrived more recently and there is still a lot more to do to ensure that they realize their full potential.
11. Do you have any message to readers of this journal?
Brazil is much closer to Japan than you may realize. I encourage you to visit our social media accounts (@BrasembTokyo) and the website of the Embassy to learn more about Brazil and our culture. I also invite you to attend the many exhibits and lectures that take place at the Embassy.
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