VZCZCXRO7190
RR RUEHRG
DE RUEHBR #1638/01 2221710
ZNR UUUUU ZZH
R 101710Z AUG 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 6308
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 2631
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RUEHSO/AMCONSUL SAO PAULO 7692
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RUEHAC/AMEMBASSY ASUNCION 5579
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RUEHQT/AMEMBASSY QUITO 1927
RUEHLP/AMEMBASSY LA PAZ 4766
RUEHBO/AMEMBASSY BOGOTA 3876
RUEHME/AMEMBASSY MEXICO 2019
RUCPDO/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 001638 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE PASS USTR - MSULLIVAN 
USDOC FOR 4332/ITA/MAC/WH/OLAC/MWARD 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA 
USTDA FOR AMCKINNEY 
AID/W FOR LAC 
 
E.O. 12958:  N/A 
TAGS: ETRD BEXP ECON EIND BR
SUBJECT: BRAZILIAN NGO FOCUSES ON IMPROVING THE CLIMATE FOR DOING 
BUSINESS 
 
REFS:  A) Brasilia 1231, B) Brasilia 1188 
 
¶1.  (U) Summary.  In a series of recent events, the Brazilian 
Competitiveness Movement (MBC), a local NGO, has sought to create 
greater awareness of the barriers to doing business in Brazil and 
the need to improve the local investment climate.  Specifically, MBC 
has explored the possibility of linking its efforts to similar 
Mexican and U.S. programs, and in conjunction with U.S. Mission 
Brazil has sponsored the public rollout of a World Bank report 
comparing the barriers/burdens firms face in various states 
throughout the country.  As part of our effort to further the 
Commercial Dialogue launched by Secretary Gutierrez and Minister of 
Development, Industry, and Commerce Furlan (reftels), USAID, FCS, 
and State will continue to work with MBC as they seek to better 
establish their pro-competitiveness program.  End Summary. 
 
¶2. (SBU)  During the month of July, U.S. Mission Brazil stepped up 
its ongoing cooperation with the Brazilian Competitiveness Movement 
(MBC) as we sought to move forward on the recently-inaugurated 
U.S.-Brazil Bilateral Commercial Dialogue.  With USAID's Economic 
Development staff taking the lead, the Mission has witnessed 
increased dialogue between MBC and its U.S. counterpart - the U.S. 
Council on Competitiveness.  At a recent July 6 strategy meeting, 
Council representatives outlined the U.S. experience in seeking to 
promote greater business productivity while Mexican NGOs proposed 
establishing greater links to the Brazilian side.  Minister Furlan 
and Jorge Gerdau Johanpetter (CEO of Gerdau Steel and founding 
president of MBC) led the discussion while prominent firms such as 
Merck and NASDAQ contributed as well.  As a medium-term goal, U.S. 
NGOs proposed holding a Latin American "Competitiveness Summit" in 
Sao Paulo at some unspecified opportunity in the future. 
 
¶3. (U)  U.S. Mission in Brazil is facilitating further partnership 
between MBC and the U.S. Council on Competitiveness.  Specifically, 
we are investigating the possibility of sponsoring a technical 
exchange program under the State-funded American Business Fellowship 
Program, which is implemented by Partners of the Americas. This 
exchange would aim to help MBC develop a national competitiveness 
index for Brazil. 
¶4.  (U)  Meanwhile, MBC, USAID, and State helped stage the July 26 
public release in Rio de Janeiro of a World Bank  report on "Doing 
Business in Brazil."  The ceremony, which included the participation 
of Brazilian Trade Minister Furlan, the Embassy's Economic 
Counselor, and the World Bank's International Finance Corporation 
Latin American Chief Atul Mehta, was well-covered by both the Rio de 
Janeiro and national media.  The report, a snapshot of the 
ease/difficulty of doing business in 13 Brazilian cities, compared 
the various locations in terms of the time required to open a firm, 
the time required to register property, obtaining credit, 
fulfillment of contracts, and tax obligations.  (In Brazil, the 
administration of all these indicators falls to state and local 
governments.)  The study demonstrated a wide range of results among 
the various states.  For instance, while it took an average of 19 
days to open a business in Minas Gerais, it took a whopping 152 days 
to do the same in the country's economic center, Sao Paulo.  The 
report also looked at how the Brazilian cities compare with other 
cities globally, providing another perspective on the time it takes 
to start a business.  Sao Paulo ranked 149 out of 155 major cities, 
whereas Belo Horizonte, the Brazilian city with the fastest time to 
start a business, ranked 30th. 
¶5.  (U)  However, it took only 47 days to register property in Sao 
Paulo, compared to 27 days in rural Maranhao and 88 days in the 
northeastern state of Bahia.  With respect to enforcement of 
contracts, Sao Paulo came out on top with an average of 546 days to 
obtain judicial remedies, with Rio Grande do Sul coming in last 
place at 1473 days.  Overall, the report shows that low income is 
not a barrier to good regulation:  Sao Luis in Maranhao, which has 
the lowest income per capita of the states in which cities were 
evaluated, ranked 5th among the 13 cities in the overall ease of 
doing business.    The full IFC report can be viewed at 
 
BRASILIA 00001638  002 OF 002 
 
 
http://www.doingbusiness.org/Main/Brazil.aspx . 
 
¶6. (SBU)  While some local business leaders saw the study's results 
as discouraging, Minister Furlan had a different take.  In his 
public remarks, he pointed out that the report demonstrated that in 
some areas Brazil was on the right path - and where it wasn't, at 
least it now had a roadmap as to where it needed to improve.  In its 
public diplomacy efforts, post has reinforced this line.  Our 
message has been that if the GOB could move forward on issues such 
as customs clearance and regulatory efficiency, this would benefit 
both the U.S. and Brazil. 
 
Sobel