Henrique de Campos Meirelles trained as a civil engineer at the University of Sao Paulo and got an MBA from the Federal University of Rio de Janeiro. He also did Advanced Management at Harvard Business School.
He worked with Bank Boston and FleetBoston Financial. He is Chairman of the Brazilian Association of International Banks, and of the Society for the Revitalization of the City of Sao Paulo. In January 2003 he became President of the Central Bank of Brazil. He spoke at a breakfast of the Brazilian American Chamber of Commerce, on Monday August 18, 2008, and dealt with “Recent Macroeconomic Developments in Brazil.”

A man of his background seems the appropriate person to deal with the financial matters of a country on the move - as we are sure that he can review not just the financial implications of development, and the interaction with the foreign banks which he has a track record of serving in past years, but also have the understanding of the engineering tools being used in the development process, and what these mean for our changing world.

Above introduction is simply because we are the Sustainable Development Media Think Tank, and we feel that - yes oil reserves can fuel the growth of Brazil - but then Brazil is in the forefront of the alternatives also, and in this changing world it would be foolish to push on the oil pedals, when the long term future is - better stay put on oil as a commodity and use it rather as a primary material for higher value goods. We kept our ears open to see what the gentleman was going to recommend, if anything. we were quite happy with what I could glean from his presentation. He obviously did not go into details, but spoke on generalities - government economists never say things that could have a political meaning like what we do with the need to decrease dependence on oil. We know this and had thus to find deeper meaning in these generalities.

July 21, 2008, Newsweek quoted Meireless: “CENTRAL BANK OF BRAZIL IN NEW YORK:”

“Today, Latin America’s largest economy has the lowest inflation of any emerging market, and it is one of the only countries worldwide where price rises haven’t surpassed official targets. The credit belongs largely to Henrique Meirelles … The country has reduced sovereign debt in terms of its shares of gross domestic product, and the Central Bank has built up $200 billion in international reserves. Brazil is also showing it can grow, but with stable inflation.”

The August 18 presentation was an update, and among those on the 170 names on the attendance list, there were members of many different interest groups - banks, investment and capital firms - even an investor in films and that reminded me of the Brazil Filmfest that just ended, lawyers, academics, al sorts of media, Realty, Brazilian State Governments, Engineering companies, a firm that had a name like a Latin wine, Metals industry… Many of them probably trying to figure out if, when, or how to invest in Brazil.

Meirelles started by saying that Brazil faced several decades of credit problems, either fiscal, balance of payment problems, and/or inflation as a result. External demand had to be slowed down. Employment decreased during the last part of the 90s at 200,000/year. In 1995 there was a loss of 160,000 jobs. This year, in the first half of the year, there were 1.9 million new jobs. Normally, by the end of the year the numbers are lowest for the year - now it looks like that this year this will not be the case.

Looking at the figures for Sales - based on Payroll and Credit we see a continuing growth in the internal market - and this is our attention to the robustness of development. We find thus that the statements regarding growth that Mr. Meirelles made, seem solid in terms of the continuing increase of the ranks of a middle class in Brazil - the guarantee for the future of the Nation.

Industrial Output is growing, so are the Real Payrolls, and as a result also Import Volumes are growing.

Business Confidence runs now at a steady 63% and with a GDP growth at 5.8%, the Growth in Investment is at 15.0%. Quite respectable figures. Wholesale Price Inflation for June 2008 on a 12 mo. trailing basis was 13% for manufactured goods as well as in agriculture 13%, but considering the Consumer Price Index (CPI) this was iend of June 2008, based on 12 mo. trailing index 6.37%, but when excluding food and fuel, it is only 5.70%.

The Real Interest Rate that used to average 18.4% in the 1996-1999 years, is down now to 8.4% for the 2006-2008 years. it was lower February-June 2008 and has increased to about 10% in July, but the inflation expectation for the rest of the year, and for 2009, are for lowering inflation. The Market Consensus is that for 2008 the Inflation Expectation is 6.44% - lowering to 5.00% in 2009 and stabilizing 20010-2012 at 4.5%. This is the target level.

The International Reserves, the Net External Debt, and External Vulnerability curves are as follows and they lead to a quite optimistic Summary.