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: v.liberatori@elsevier.com.br
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
erocque.smf@pcrj.rj.gov.br
Thank you
Rio, the best place to live and
work of the Southern, I do believe!