 Today we are going to talk about new scenarios for Brazil. We are very happy because we have five very important people from politics, business and the academy. They are going to share their knowledge with us. Since São Paulo held the first economic forum in Latin America, Brazil went through a traumatic stage of crisis and growth. Their economic growth was fed by commodities during Mr. da Silva's mandate. Now under the presidency of Mrs. Rousseff, Brazil went through a crisis. Economic recess was also impacted by the car wash operation, an apolitical crisis that led us to the impeachment process. However now, finally, since our economy is resuming its growth and it looks like we are now getting return on investments, we have an optimistic scenario ahead of us. However, we are getting closer and closer to the elections of October. During the last years, politics have divided Brazilian people a lot. A survey published a while ago showed that 44% of Brazilians are pessimistic about the elections and whether or not they are going to improve our country. Especially people mentioned corruption. Also, 75% of respondents do not believe in the promises that the candidates make. How could Brazil hew those wounds that were left by the crisis? How could Brazil established its economy for stable growth in the future? Also, how could Brazil regain this leadership role for the region? And more specifically, I would like to say that Brazil is interested in growth, of course. But would it like a booming bust? Because in the past years, all of the turmoil led to systematic profound changes. In order to answer all of those questions and comments, we have Mr. An Luizio Nunes, Minister of Foreign Affairs in Brazil, for the government of President Temer since March 2017. He graduated in law studies and he has had a long career as a justice under President Cardoso. He was also elected in 2010 with the biggest amount of votes in the history of Brazil. We also have Mr. Gerardo Aucmin, Governor of São Paulo. He graduated in medical studies and he worked as a doctor before becoming a politician. Currently, he is working his fourth term as a governor. He is making all of his efforts and all of the efforts possible to reduce costs and improve partnerships. We also have in his file that he was one of the founders of his party. He is also going to be a candidate for the presidency next October. Next to him we have Mr. Trabuco. Mr. Luiz Trabuco is the chairman of the Bradesco Bank. The Bradesco Bank is the second biggest private bank in Brazil. He took office in October last year after a long career at this bank. He graduated from the University of São Paulo and he has been the bank's CEO since 2009. He has been acknowledged as the best CEO this bank has ever had by the Forbes magazine. We also have Mrs. Lourdes Casanova, a senior lecturer of management. She is an expert in foreign affairs focused on Latin America and different multinational for emerging markets. She was called one of the most influential intellectuals or academics in the Americas. And finally we have Mr. Paulo Sotero. In his prior life, Mr. Sotero was a journalist working as a correspondent. He is in São Paulo since 2006 and he works as the director of the Woodrow Wilson International Center for Scholars. And he is the director of the Brazilian Institute. I would like to start off this panel by asking people what is the main challenge they face and what is the main challenge that is going to determine the future of Brazil in the next four years. Minister, please, the floor is yours. I think this question has already been answered by Governor Aukiming today. And by the way, Mr. Sotero was born in São Paulo, specifically in the city of Rio Preto. Now I think in a way this question has been answered by Mr. Aukiming earlier today. When we had the opening ceremony, it was also emphasized during lunch when we were discussing that idea. So Mr. Governor says that right at the middle of all of the challenges that we face and I hope he's going to face those challenges because I hope he becomes the president is the specific challenge of making this growth or this uptake of growth not to be just a moment but to be a trend. We don't want it to be very short. People usually say that. And in order for it not to be short, we need to do something very important and we need to create some reforms. These reforms are related to overcoming the crisis. One of them is very commonly spoken of, for example, reforming our social security platform. This is key to increase productivity and make our economy grow. Also, we need to remember that we have a lot of inequality in our country. So we need to have a strong state that interferes in education, science, technology, public safety and all of those areas. Also, we do need a state that is very strong but very transparent. These are some roles that only this state could play. In summary, I think that's what we need. And today we know what we have to do. In a way, I'm not just making it up. Everybody knows about those things. Mr. Karl Marx says that man creates history according to their conditions at the time. As Maccavel says, you have virtue and fortune. Fortune has to do with the objective scenario that we have around of us. So we have a large country that has a lot of resources, that has a good image and is respected globally. We also have a society that wants prosperity and innovation and equality. This is our objective scenario. But in addition to objective points, we also have subjective points which have to do with virtue. That has to do with political leadership because we need to create a message that goes to people's hearts. I think this is what we need to work on, fortune and virtue. Mr. Governor, do you agree with him? Do you agree that we need fortune and political leadership? Yes, undoubtedly. Our ministers said it really well. I would like to highlight how important elections are. Our presidential regime has been very important throughout the world. And at the bottom, we always have conflict. Sometimes we even have very low-level campaigns. However, that kind of presidential election is always positive. Whoever is elected is going to get around 70 or 80 million votes, which makes an election very legitimate. So the first year of a new government is paramount to determine our future. Brazil has created a very detailed, very long constitution. So if we need to change everything, we need a lot of backing. Three-fifths of the votes to change anything. So if we need to change the social security platform that we use, we need to use specific bills. If we need to change anything tax-wise or politically-wise, then we need to approve those bills. That is why I say that campaigns are an opportunity to teach people to get closer to them and to do something together, because that is when we can inspire the country. I also think that the new Congress that we have and the new government that was elected, or that is going to be elected, has a lot of opportunity to shine, especially if they believe in themselves. They can do it, especially if they choose an agenda that is geared toward competence and competitivity. Mr. Trabuco was talking about growth, and we see growth today. We know growth is taking place. However, we don't know if we're having a growth uptake or if we have sustainable growth for the future. In order to get sustainable growth, we need our macroeconomics to work. First and foremost, we need to reduce the tax deficit. So we need to go from a primary deficit model into a primary surplus model. We do need a set of measures. In summary, I think we should mention three words, growth, inclusion, and sustainability. We need growth because without growth, there's no way out of it. So we need a set of measures that make us able to grow again. And Brazil is very skilled at growing. Now, I mention inclusion because we are an unfair country, unequal and unfair. We are unfair in how we tax people and in how we give it back to them. That is why we also need a set of measures for that. And finally, we have sustainability. Everything needs to be sustainable so that we can enjoy a long cycle of growth. We are living the best possible moment to improve our growth because of global economics. The world is growing and we should enjoy the opportunity. Of course, it is not going to be easy. And it is only natural that people question politics way more today. And that happens not only in Brazil, but all over the planet. People are getting more involved. They are questioning everything much more often. And if we use that the right way, we are going to boost growth. Thank you very much. Mr. Trabuco, if I could understand you well, I think that you said that the reforms are necessary. For example, you mentioned social security. How do you think the private sector is going to play a role in Brazil's challenges for the next years? Daniel, first and foremost, thank you. Thank you for inviting me to be here. You have helped us, but I think we are happy to be here. Well, I think that in this panel, we need to think about the future of Brazil. And I've been thinking about things. I think usually we are very grateful towards the past and very hopeful for the future. Sometimes we are even grateful for awful things that happened to us because they actually taught us. And we look at the future hopefully because we know an election is coming up. We don't have a risky election and we have with that election an opportunity to create a new model and a new management for this country. We are now leaving a recession, a very troublesome recession. And we had people who lost their jobs or who got very inferior jobs during the recession because of that our social debt went up and we need to work on that. It is the public sphere who needs to work on that. Now we went into this recession because we were lacking materials and we actually used the model, the wrong model to think about the country. Sometimes using this kind of model does not work. So this fatigue led us to recession and now looking into the future I can see we have this lesson so that we can know how to act in the future. Now thinking about why I am part of this panel I was inspired by an article, The Table of Nations. It was actually a platform for me to build my reasoning. We have territory, we have population, we have cultural commodities, we have elite, we have academia. So what do we have to do as a nation for the future? Minister has mentioned Galinha and what did he want to say? It was a short period of growth actually that he talked about. The future recovery after recession you do a cyclic recovery because the base is so small that recovery is free to change cycles but cyclic recovery has a risk. You could call it a short period of growth or we may have a longer cycle. So we cannot celebrate it actually. Some of the gains we have for 2018 because we are going to have problems in 2019 so if we don't change the rules we are not going to have solved the problem. So that's why public debt is a problem, the camp. But it's a letter of intent it's a wish without the reforms we are not going to have more and more problems in terms of taxes and we are going to compromise some other values that we have in fiscal or tax deficit will mitigate the capacity of the state to help to pay the social debt and at the same time the tax deficit can pose a problem to being solvency or to the solvency of the country that's why the elections it is an opportunity it is an opportunity for us to place some scrutiny on the plans that people have for the government or the agenda they have for the government of Brazil. I am very optimistic about Brazil I am realistic actually about Brazil of course I have seen this country being called the land of the future Brazil has been called not a serious country by the goal I've heard people say that the future never makes it to Brazil and then there was when color did what he did he said that Brazil had a problem but there are many things we have to be grateful towards what happened because we cannot repeat this in the future some of the mistakes that we made in the past and we have to be in the table of nations I think this is the challenge that we have at hand now I'd like to ask a professor we talked a lot about the domestic situation in Brazil right now talk about the international arena with the partners like China and the United States and what are the challenges for Brazil so I'll speak English I gave lessons on Latin America for the past 20 years so first in a business school in France in Singapore and since 2012 in Cornell so my luck was related to the luck of the region of Brazil the luck of Brazil my class will have more or less students depending on that and as a son of the times when I came to Cornell they asked me they told me that I should include China and India in my classes given a son of the times so what happened here in Brazil and clearly in Latin America is that while Brazil was going through this tremendous crisis through this perfect storm China took advantage of this opportunity and became as we have seen and the biggest investor in Brazil in 2016 and 2017 China is already the biggest commercial partner of 100 countries including obviously United States Brazil, Chile, etc. but now it is becoming the biggest investor in important economies such as Brazil so what does this mean this represents a triple challenge it represents a challenge on one hand economic challenge and every panel we have heard that when we are at the World Economic Forum which stands for globalization and open economy we are in a moment where the neighbor from the north, the friend of Brazil is starting by saying America first and not only that he also says that we will look at the commercial treaties trade treaties quite closely and we see if they might affect this positively or negatively and besides we have China which and I would say that China plays and in two ways being an open and an enclosed economy and it is above all very much centralized economy on the other hand and I am not going to talk about this a different political model and when they invest here in Brazil they are part from investing in natural resources to invest now in infrastructure in banking so the Chinese banks are those who have largest margins of 40% and the second the Brazilians with a margin of 20-25% the Brazilian banks are a model because they really Brazil is the only country in Latin America that was able to maintain the financial sector of their own the only foreign bank is Santandero Bank large bank in the Brazilians so these banks that are used to compete and adopted technology very early but how they are going to compete with these banks and we also have the great paradox one of the main investors in Brazil is State Grid State Grid is the second largest company in the world after Walmart and revenues and it is a company that not only is building the grid electrical grid, power grid from the Amazon to the central part of Brazil but also it's buying a state privatized like C.C.P.L. and now ElectroRAS privatization they are going to be interested and then today what was considered the telecommunications operation from Brazil China is interested in buying it and also by Chinese companies China is a great ally of Brazil with Brazil and the BRICS and the National Development Bank and China has given to Brazil another year for the structure bank don't worry we are going to give you one year more and Brazil is learning to know China but China represents this triple challenge political, economical and business environment then not only are we searching for the benefit as we used to but sometimes that sacrifice a benefit to grow and to increase the revenues and think in long terms this is something that the new government is going to have to face Paulo I would like to talk a little bit about the Brazilian politics we have seen around the world the growth of populist movements we have frustration of the elites the political elites do you think this could be also a risk in Brazil? I think so we have to consider the possibility that I'm not pessimistic and I'm not optimistic either I am a journalist and I think that we have to consider the reality the way it is of course there is a risk the risk of populism comes from like as an example we have to open we have the globalization we have new productive systems but it's a globalization that excludes and then this leads to populism the globalization that excludes leads to Brexit so we have to keep opening Brazil needs desperately to open because Brazil is really isolated but we have to open so that we can be integrated into the world economy and integrate more Brazilians in the Brazilian economy this is a secret and when we do this we do it well with ethics seeking social justice and I think pension reforms has to be done like that we have to do the pension reform thinking of social justice because it's not possible that an elite of public workers are paid a pension that 10 times 15 greater than the people that work in the private sector so less than one million public servers and over 30 million workers from the private sector so anyway we have to open ourselves we actually have another challenge that I think is really important we talk about China here we talk about the United States here but what does Brazil know about China how many courses in our universities are about China how many students in Brazil learn Mandarin there are dozens of thousands of Chinese who learn Portuguese and we have this difficulty I mean we are very superficial actually sometimes we have to understand China we have to know China we have to help include China so that they can bring great things to us like technology we have to know to get to know China so we're not simply the target of Chinese actions we have to know like he has been writing this for years and years and I always quote what do we want in this relationship with China Brazil is a country a leader country and I think it's really important that we have shown once more it's not easy for you to come out of crisis such a big crisis that we have and we have created this crisis ourselves for the first time in our history we cannot blame it on anyone else but we're coming out of this crisis in a democracy so the value of this is immense and I think the campaign is going to show this we've got to pay attention to it it's going to be about democracy seeking social justice more equality, more dynamism for your economy with absolute respect to values such as human rights this discussion will happen during the campaign because there are some people who intend to make it to power they ignore this but I think that we have a critical mass of politicians and people who actually, you know the thing is we have to open ourselves so it can be included in the world we have to do this with quality inside and outside Brazil because Brazil is a country that whenever Brazil gets better Brazil makes the world better because we are one of these continental countries with many races and we have this quality but it's the challenges ours if we're going to be able to do it I think we will but it depends a lot on work and perseverance thank you I think we heard a lot about the importance of the presidential reform of having a more cohesive Brazilian society but I want to go back to our governor and ask you about Michelle Termo's administration they tried to pass the reform so what are the things that would make a difference if you compare your government, if you were elected how would you compare to the Timur administration now when it comes to the reform since now it is up it would be really hard to perform the reform in only a few months we need three fifths of the votes for that it is very unlikely they will be able to do it in their last year of mandate that kind of reform should be done on the first year of a new government now in my opinion our focus with the reform is social justice first and foremost because we have a general reform for the social security platform for over 30 million Brazilians in 2016 in average we paid 1,191 real per person so it is very unlikely those people are going to pay the bill that we need to pay right now so our thinking with this kind of reform is first and foremost that we should promote social justice that is what I have always fought for by the way we have already done that in the state of Sao Paulo in the state of Sao Paulo the public sector has been doing that since 2011 we started acting since 2013 and we said that nobody would earn more than the cap of the social security agency after that people would have to pay for a supplement now the change now is that this benefit is not mandatory but it is an option that is how you get zero deficit now we have an awful deficit that could even compromise everything that has to do with the tax regimen that we have that could also undermine lower classes because we have indirect taxation so we do have indirect taxation when that happens and I think we have to perform a set of reforms here our model for the institutions and our politics has been destroyed it is over in the last election 20 million voters did not vote even though in Brazil voting is mandatory that goes to show that we are facing a crisis in our system in medicine we say sublata causa torito efecto we need to suppress the cause in order to stop the effect so if we don't work on the cause we are going to have to keep on dealing with the effect in the Brazilian model we have 35 parties but a lot of people didn't vote in the last elections so we see that we have a lot of corporate campaigning in our country we are hostages to corporate corporations and that is applicable to the state and to private companies and we are orphans of a collective joint interest so we need to change everything through a set of reforms as former governor said people make many mistakes but less mistakes than the elites so we need to take all of that information to the people it is a lot of hard work because when we explain politics we need to convince people we need to inspire them and make them hopeful so your priority in your term or your future government is going to be a political reform no not at all I'm not excluding anything I think we do need a political reform but we also need a tax reform to simplify everything a social security and pension plan reform and a reform for the Brazilian country because we are unable to pay or to use our GDP properly so we do have a set or a list that we need to go through also we still need to remain competitive additionally we need regional growth and development we are in a huge country we have a lot of different states in Brazil that is why we also need regional development Mr. Minister you can say something about that yes I would like to piggyback on what he said we have an undergoing reform going on a bill has already been passed by that by the congress and we have approved an amendment that is going to reduce the fragmentation that we have among the parties this is going to be in effect as of next election in order to go to the parliament a party needs to have a minimum performance so there is a clause that demands that the party has at least 3% of voters distributed in at least 9 states so this is the performance clause now in addition to that which brings more efficiency it is going to be prohibited to have certain kinds of coalitions in those cases they are going to assess the proportion of votes the parties get however the proportion is not really assessed precisely because parties could get together and create coalitions to have more representation in different places for example in different assemblies and after the elections they go their own way now in the next election they will no longer be able to create this proportional coalitions so I just mentioned two different changes and they are going to reduce party fragmentation a lot with that kind of policy if a voter votes on a certain party they end up electing somebody from another party because of the coalition this is something that is already ongoing and this is going to be very beneficial in the long term I also have another comment yes those points are crucial they are going to be in effect in the election but I would like to highlight something that is a concern for me we have reduced campaigns to 45 days so we have created campaigns so as we don't have any renovation we want to elect everybody who is already in power because for a new candidate 45 days is not enough it's not enough for them to be known by people or to get their votes we don't need one year long campaigns but 45 days is ludicrous unfortunately we only have another 5 minutes because we were a little bit late at the beginning I apologize for that and I pass the floor to Mr.Trabucco I would like to talk about the previous topic yes of course when we lack balance the state is unable to do anything about it and you see the social security reform we were talking about has to do with social justice we have promised people that they would have 20 minimum wages per person and we have not fulfilled that promise now people who need to pay for their benefits according to their revenue but if they have to do anything else there are subsidies when Roosevelt used their social security platform he said social security is used to take people out of the poverty line he wants $500 at the time and of course our system is crazy our platform is crazy now the agreements that we had in the 19th century are no longer applicable now they no longer work that is why we have so much conflict right now the resources we have are now used to pay for everybody who has retired I promised my mom I would not talk about retirement but let me talk about growth then without a growth agenda we are not going to pay for the debts that we have when it comes to social development but we need to think about how the state is going to do that can the state promote growth no they need to lead growth so we can transform the backlog of infrastructure I do think infrastructure is an issue but it could also be a bonus to the country if we transform infrastructure into an opportunity to work with private investment yes education is important yes technology is important but if we don't create more jobs 30 million jobs we won't have enough time to work with those people who are over 40 or over 50 who are increasing violence levels in the country we need an agenda for growth and we need to understand the kind of country we have to have I know we talk a lot about political parties and in Brazil we have traditional parties and very very small parties which work like micro companies and those parties were organized and created so that they could get money from people it is a business and that is not how things should work we should have political parties and ideologies so that we have more representation in the country if we want to continue pretending everything is correct that's fine but that's not what we should do as our minister has said we should have more legislation on that sometimes our history upsets us because we don't have historical transformation we adapt and we evolve but we don't have disruption and we think about that really well sometimes we go backwards even when we make very bad choices or sometimes we go backwards when a certain groups goes into power in order to rob everything we have in the country but we are able to overcome that my task is to explain Brazil in Washington and when I am in Washington I try not to bad mouth Brazil one of the wonderful things we have in Brazil right now is the new voices that we see all over I am in touch with those people you know the movements I am talking about those young people are very motivated very prepared and many of them many of them are living their jobs to change things that is what we need to do we need to work from the bottom up and we need to open new space so that these young politicians are able to create some change improve our democracy and add quality to our country our country is talented enough it is skilled enough enough but we need to be very persistent it is not an easy task but it is a task that we should tackle thank you unfortunately we no longer have time for the discussion we heard some very interesting ideas and some reason to be optimistic thank you very much for your participation and thank you very much for everybody for your time thank you so much