By Sergio Segovia, President of Apex-Brasil
The COVID-19 outbreak undoubtedly presents a number of serious challenges to the global economy. Brazil is no exception. To protect the country’s strong economic momentum and burgeoning business ecosystem from the impacts of the pandemic, the Brazilian government has implemented a series of support programs and relief packages. Apex-Brasil has complemented the government’s efforts by providing intelligence and qualified information to Brazilian policy makers, business leaders and entrepreneurs on how to best respond to COVID-19.
Below are some of the most impactful measures the Brazilian government and Apex-Brasil have taken throughout the crisis to support the country’s economy and businesses:
Protecting the Brazilian Economy:
As the number of COVID-19 cases began to increase in Brazil, the government moved swiftly in an attempt to shield its economy from the potential impact of the virus. On March 19, the government announced it would allocate R$169.6 billion (US$33.8 billion) to emergency funding, with provisions to fight the pandemic, assist the most vulnerable population, and keep the employment level stable. Emergency funding has continued to increase as the pandemic evolves in Brazil. The Brazilian Minister of the Economy suggested that as of March 31, a total of R$750 billion (US$148.1 billion) has been allocated to ensure Brazilians’ health and job security, emphasizing that these resources would continue to increase over the coming days and weeks.
Apex-Brasil has focused its efforts on maintaining foreign investors’ confidence in the Brazilian market amid heightened uncertainty. In addition to hosting regular videoconference meetings, live videos and webinars, Apex-Brasil is currently fielding a survey that will identify international investors’ top pain points during the COVID-19 crisis in Brazil and elsewhere around the world. The results will be used to develop solutions – designed specifically to address investors’ biggest concerns – that will mitigate the impact of the virus on investment in Brazil.
Additionally, Apex-Brasil has already launched a number of initiatives to better equip Brazilian policy makers, business leaders and entrepreneurs in making smart investment and business decisions. For example, Apex-Brasil’s new Market Intelligence Report informs Brazilian business leaders and foreign investors on various timely market opportunities around the globe by evaluating the effectiveness of respective countries’ response measures to COVID-19. Similarly, Apex-Brasil developed The Panel, a tool that tracks the rise and fall of differing commercial indicators (e.g. Brazilian exports and imports) against the number of confirmed COVID-19 cases in Brazil. This interactive tracker allows both Brazilian companies and public policy makers to accurately trace the influence of COVID-19 on various sectors of Brazil’s foreign trade.
Protecting Brazilian Businesses:
The Brazilian government has also implemented several measures to support the country’s businesses during this challenging time. For example, the National Economic and Social Development Bank (BNDES) allocated R$55 billion (US$10.9 billion) in emergency funding to temporarily suspend payments of direct and indirect financing installments for companies, providing businesses with relief from their regular payments while their incomes remain unstable. This provision also expands credit lines up to R$5 billion (US$996 million) for micro, small and medium-sized companies through partner banks, helping smaller businesses borrow additional funds they may need to maintain operations throughout the pandemic.
In addition, the Ministry of Economy recently launched a comprehensive unemployment program. This program, totaling R$10 billion (US$1.96 billion), is aimed at helping businesses keep their employees on payroll during COVID-19. By reducing the cost of labor contracts to businesses and assisting companies in navigating labor relations, the program is expected to significantly decrease layoffs.
Apex-Brasil developed a business action plan to help Brazilian businesses leaders and entrepreneurs make informed, strategic decisions to navigate the COVID-19 crisis. This interactive plan, available for free on Apex-Brasil’s website, includes both a step-by-step guide for crisis management and proactive tips on how to protect finances.
Apex-Brasil also supported MegaHackCOVID-19, a creative virtual hackathon focused on developing tools to help small businesses, microentrepreneurs and startups rebuild in the wake of COVID-19. Thousands of companies and individuals “co-created” programs during this 11-day virtual event alongside mentors and well-known specialists. Participants created programs that could prove vital to Brazilian businesses, including digital programs that streamline the online job filling process, methods for boosting and preserving capital for small businesses, and affordable digital advertising programs. MegaHack has also made it easy to connect these innovators with potential investors who can transform their creative ideas into real, actionable solutions.
While the impact of this virus is already significant – in Brazil and across the world – it’s encouraging to see that Brazilian lawmakers have taken necessary steps to protect Brazil’s economy and businesses. Also, we recognize that Brazil’s economy rests on a secure foundation, with a strong reputation among foreign investors. In 2019, the country was named one of the world’s top destinations for foreign direct investment (FDI) by UNCTAD, receiving US$75 billion in FDI last year alone. Combining these two elements, Brazil maintains its competitive edge in the global investment market. For example, during the first quarter of 2020, Apex-Brasil shared information about opening businesses in Brazil with 200 international investors, and ten of them have moved forward with a total of US$1.7 billion in investments.
Apex-Brasil is privileged to do our part in supporting our country, and we will continue to help Brazilian business leaders and policy makers make informed decisions about how to best manage through this unprecedented crisis. Ultimately Apex-Brasil remains optimistic that Brazil can – and will – navigate this challenging period, and perhaps come out even stronger as a productive global economy.