Political uncertainty tips Brazil in ranking of foreign investment

The political uncertainty that Brazil has lived throughout this year stunned foreign investors. According to the UN Conference on trade and development (Unctad), the Country fell in the first half of the 6th to the 9th place among the major investment destinations. From January to June, were sent to over US $ $25.5 billion, a fall of 22% compared to $ $32.6 billion in the same period to 2017. "Uncertainty is the enemy of investment," said Richard Bolwijn, one of the authors of the survey, referring to Brazil. According to him, decisions undertakings to invest in a country based on economic fundamentals. But the moment to realize the plans a evaluation of political instability. This situation has been experienced directly by the President of the brazilian subsidiary of Mercedes-Benz, Philipp Schiemer. According to him, it's hard to convince the company's headquarters in Germany to bring new investment to Brazil, in the midst of so many uncertainties about the future of the country, and the global executives feel more inclined to invest in Asian markets. Schiemer has guaranteed that the current investment plan of the automaker, R $2.4 billion by 2022, is not at risk. However, said fears for the following years. "The investment cycle is long term, then, once the decision, you don't change. But, when we are discussing investments to 2023 and 2024, I get worried, "said the Executive, in automotive event in São Paulo promoted by AutoData. The President of Mercedes regretted that the second round of the presidential election is being disputed by two candidates who he considers to be "extreme", but stressed that it will have to accept the result and ensured that will work with any of them. To the President of the Brazilian Society of transnational companies (Sobeet), Luis Afonso Lima, the indentation of 22% in foreign direct investment in Brazil in the first half was due more to frustration at the pace of activity and the completion of the projects that effectively to the electoral uncertainty. But, for him, this turbulent scenario will have direct influence on the results of the second half – the forecast is for a fall of 30% in comparison with the same period of 2017. "The year of 2018 must close with 25 percent drop," he predicts. To 2019, the scenario should remain negative for foreign investment, according to Lima. Among the factors responsible for the retraction, the President of Sobeet points the character already expressed by nationalist candidate Jair Bolsonaro, who leads the polls for the presidency-he showed contrary to Chinese investments. "The global flow of investments is diminishing," says Lima. He points to several factors to unfavourable international environment, such as reducing the global growth projection, made by the IMF, and the United States ' decision to reduce the tax on the repatriation of capital. Livio Ribeiro, senior researcher in the area of applied economics of the Brazilian Institute of Economics (Ibre) of the Getúlio Vargas Foundation, said there are several factors combined to play for and against foreign investment, not just political uncertainty. The exchange rate, for example, favors investment, because it is possible to do more real with the same figure in dollars. By the time your frustration there was growth projections play in the opposite direction. Ribeiro also ponders, in recent years, there has been a reduction in trade and financial flows. With greater economic protectionism, there was a disincentive to investment. Global retreat in a comprehensive way, investments in the world suffered a fall of 41% in the first six months of the year, reaching the lowest point in more than a decade. In the first half from 2017, the volume had reached $ $794 billion. This year, the total came to $ $470 billion. /JAMIL CHAD, SHIE CHIARA AND ANDRÉ ITALIAN ROCK