JBIC Signs MOU with BNDES on Operational Cooperation
Supporting Business Expansion of Japanese SMEs into Brazil with Cooperation between Japanese and Brazilian Policy-Based Financial Institutions
- Area: Latin America and the Caribbean
- Mid-Tier Enterprises and Small and Medium-Sized Enterprises(SMEs)
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed on August 1(Brazilian Time),a memorandum of understanding (MOU) on operational cooperation with Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian Development Bank, taking an opportunity of Prime Minister of Japan H.E. Shinzo Abe's visit to Brazil. The signing of MOU was recognized and exchanged in the presence of Prime Minster of Japan H.E. Shinzo Abe and President of Brazil H.E. Dilma Rousseff.
The objective of this MOU is to exchange information, organize meetings and seminars and thereby consider the possibility of future financing between JBIC and BNDES with a view to facilitating the business of Japanese mid-tier enterprises as well as small and medium-sized enterprises (SMEs) into Brazil.
In recent years, Japanese direct investment in Brazil is on the increase, targeting its large domestic market and also resulting from increasing needs for local production. It is thus expected that an increasing number of SMEs, which support a broad base of the manufacturing industry, will also expand operations in the country. Since Brazil has an urgent challenge to strengthen the competitiveness of its domestic industries, there are hopes for direct investments from foreign companies, especially Japanese companies that have advanced technological capabilities and management knowhow. In the Wise-Men Group on the Japan-Brazil Strategic Economic Partnership, *1
participated by JBIC and BNDES, the leaders of both countries proposed the heightening of the levels of technology and innovation through Japanese direct investment in Brazil as one of the priority areas for promoting economic interactions between the two countries. Thus there are expectations for JBIC and BNDES in such areas as financial cooperation.
BNDES is a policy-based financial institution wholly-owned by the Brazilian government and provides preferential financing in its priority areas, including infrastructure development, advancing innovation and SME development, in order to strengthen the competitiveness of the country's domestic industries. JBIC and BNDES have built up close cooperative relations for more than 50 years through loans and technological cooperation in such project areas as industrial investment in Brazil, its infrastructure development and global environment conservation. Therefore, the signing of this MOU is expected to further strengthen relations between JBIC and BNDES.
As Japan's policy-based financial institution, JBIC will continue to actively develop and strengthen a framework to support overseas business of Japanese SMEs through its efforts for materializing this MOU and thereby support the international competitiveness of Japanese industries, while contributing to further depth and development of already close economic relations between Japan and Brazil.
- *1 In the Japan-Brazil summit meeting held in 2004, leaders of both countries agreed to establish the Japan-Brazil Council for the 21st Century. Subsequently, the Council made a recommendation that the public and private sectors should work together to revitalize economic relations between the two countries. Following this recommendation, the Japanese and Brazilian business communities created the "Wise-Men Group on the Japan-Brazil Strategic Economic Partnership." Its participants discuss what can be done to reinvigorate the Japan-Brazil strategic economic partnership, focusing on selecting priority issues that are both concrete and feasible, for making recommendations and to report to leaders of both countries. JBIC's Executive Managing Director, COO, Koichi Yajima participates in the "Wise-Men Group on the Japan-Brazil Strategic Economic Partnership" as a Japanese member.