Address by the President of the Republic, Michel Temer, during a dinner at the Arab-Brazilian Chamber of Commerce - São Paulo/SP
São Paulo/SP, 9 November 2018
I naturally want to begin by saluting everyone, but in particular Rubens Hannun, president of the Arab-Brazilian Chamber of Commerce.
My dear friends, federal deputies: Arnaldo Faria de Sá, Arnaldo Jardim, Beto Mansur, Carlos Melles;
Deputy Goulart, as well as councillor Rodrigo Goulart;
Jorge Tadeu Mudalen;
Francisco Jardim, Secretary of Agriculture;
Madam Ambassador Lídia Scherer;
The dean of the Council of Arab Ambassadors in Brazil, Palestine Ambassador Ibrahim Alzeben;
The president of the Federation of Muslim Associations of Brazil, Mohamed El Zoghbi;
And I want to salute all ambassadors by greeting Mr. Joseph Sayah. In his name, I want to salute all ambassadors.
Likewise, I would also like to congratulate the Chairman of the Board of Governors and the Guidance and Deliberation Council of the Arab-Brazilian Chamber of Commerce, Walid Yazigi.
Our, my dear friend, the Vice-President of the Court of Appeals of the State of São Paulo, Judge Artur Marques da Silva Filho.
And finally, to salute everyone and, of course, naturally, thank you for the very kind words with which you received me at this meeting, which was very well defined as a family gathering, wasn't it? I am among my relatives. And for that I, immensely touched, thank you for this homage by the Arab-Brazilian Chamber of Commerce.
And, in addition to saluting Rubens Hannun, I want to salute ambassador Osmar Chohfi, who was my classmate at law school. Thank you for this extraordinary kindness.
As you know, it is always a pleasure to return to the Chamber and to see so many friends again. It's interesting... I'll even make an observation. In general, we often spend years and years without meeting, but when we meet, it's like we saw each other yesterday.
And the possibility of meeting friends again is important because Brazil, in fact, is a great amalgam, it is a great union, this is Brazil. And this unity in diversity is one of our greatest strengths. Whenever there are those who want Brazilians pitted against Brazilians, not Brazilians with Brazilians, we must remember exactly that: Brazil is, first of all - and I want to emphasise this phrase - a sum. It is a sum of ethnicities, sum of cultures, sum of religions. And there are many, we must admit, who contributed to making Brazil this extraordinary country. This is the case, in fact, of our community, of the Arab community, here so well represented, and of many others, we must agree: Jewish, Japanese, Italian, Portuguese [communities], and so on. All of them, without exception, have been welcomed here and all of them built their lives here, bringing truly valuable contributions.
And I think, without exception, they all share this trait: they are proud of Brazil. Incidentally, I will make an aside here, to say what I heard from my father, who came here from Lebanon. He said: “Look, my son, Brazil is the country where you make America”. The expression "to make America" meant, Walid, to develop, to grow. And it is interesting, the extraordinary welcome that Brazil offers those who come from abroad. After all, I am the very first generation. Many of you here are familiar with my and my family’s history.
My parents married in Lebanon, had their first three children in Lebanon, Ambassador Saed, and the last five were born here. I am the youngest, and also a late-born one, because I was born almost seven years after the last child.
And look, the career that Brazil allowed me, Goulart... It allowed me to make a successful career, thank God, at university, professional life, law practice, and objectively in public life, allowing a very first generation of Lebanese to become chairman and then deputy chairman in parliament on three occasions, and then Vice-President and now President of the Republic.
Therefore, this new, this new formation of ours is so multiple that I am reporting, constitutes a true heritage. Even in the field of diplomacy, we cannot doubt, it is this setup that gives the human substrate of the relations between Brazil and different countries and regions.
In the case of the Arab world, these urban ties are very strong. Arab presence in Brazil is part of our daily life, in the arts, literature, economics, medicine, architecture, and politics.
This deeply human connection is the basis of our fluid dialogue with all Arab countries; it is at the very basis of intense and fruitful economic exchanges.
Incidentally, just to relay an episode... One of the times, Mr. Appellate Judge, when I was in Lebanon, when the president was Michel Aoun, he told me: “Look, you are more a President of Lebanon than I am, because here we have six or seven million, and you have eight million descendants”. Just to give an example of our fraternal connection, [the connection] between the Lebanese state and the Arab state, therefore, and Brazil.
And I know that each one of us here, everyone present, knows very well the importance and density of these exchanges. In 2017... I will repeat words that have been said here. Our trade flows reached 20 billion dollars, a growth of 20% over the previous year.
This year, in 2018, as of October, we have already exported more than 20 billion dollars to Arab countries. And if we extrapolate from the Arab world to the Islamic world, a major buyer of our agricultural products, we have reached almost 37 billion in trade in 2017, with more than 26 billion in Brazilian exports.
So, we are doing a lot, but we still want much more in this relationship between Brazil and the countries of the Arab world. We want to expand our network of trade agreements with Arab countries. We already have instruments with Egypt and Palestine, and are negotiating with Jordan and Lebanon. We resumed talks with Morocco and Tunisia, and are ready to promote larger investment flows.
Therefore, I want - and we all want - the Arab world to continue to be the exceptional partner it is for our development above all, ladies and gentlemen, at this moment of resumption of the Brazilian economy.
And it is with reference to this moment in Brazil that I would like to conclude these remarks. The ladies and gentlemen know that in a few weeks, I will leave the Presidency of the Republic, which I will do with the certainty of duty fulfilled. It is a certainty that comes from a simple comparison, a comparison between the Brazil we received and the Brazil that we will deliver on January 1st.
Incidentally, a few days ago, when I had a conversation with President-elect Jair Bolsonaro. I said: "Look, Mr. President, I found the country as if it were a bumpy road, I confess, all modesty aside, but I'm giving you an asphalt road, so you can put your car, you can put your car on the road and drive smoothly. Moreover, I want to reiterate that when we started our government in May 2016, we had to very quickly conduct a precise diagnosis of what we would face.
Just to get an idea of the challenge, Rubens Allum, of what waited us at that moment, we discovered that the government deficit that had been announced to be of 90 billion reais was in fact of more than 170 billion. This is why I remember having said at the time that we faced not only a fiscal deficit, but a truth deficit, that is, it was not 90 billion, but rather 170 billion.
And that is why we acted swiftly, with all speed, with all celerity, inaugurating that formula we mentioned here, the Proposed Constitutional Amendment that set a ceiling for public spending, that starts from a frugal, trivial concept, that nobody can spend more than what they earn. At home, if you spend more than what you earn, then three, four months later you will quickly have a big problem.
Well, Brazil is our big home, so we cannot spend more than what we raise. So we have established a proposal, approved by the National Congress, to contain public spending, and did so with a lot of responsibility. We rejected, in fact, populist measures typical of those who want popularity today at the expense of disaster tomorrow. We enacted a measure meant to avoid spending, public spending, and it is certain that what rulers always want the most is to be able to spend at will.
But since we had a responsibility, a certain responsibility - one surely born of our formation, our fraternal formation, influenced by the Arab community - we said: "Look, we're going to set a ceiling for public spending, which will match what you earn [sic] with what you earn for a ten-year inaugural term, or maybe 20 years", and that's what we set in the public spending ceiling amendment.
And it's interesting to note... I'll give you concrete facts about this. We started with a deficit of 179 billion, the next year 159 billion, and now the forecast in the budget is for 139 billion.
Therefore, within ten years it is possible that there will be a revision of this public spending ceiling, since there will be, I reiterate and repeat, a match between what is collected and what can be spent. This measure was extremely responsible.
But it was with this stance that we implemented, as it was said here, in just two and a half years... We must admit, my friends, it's not a four-year or eight-year administration, it's a two-year administration. And we have implemented an ambitious reform agenda like we have not seen in our country for a long time. In addition to the public spending ceiling, we for example, brought labour legislation to the 21st century. I am speaking with complete certainty because the Consolidation of Labour Laws is from the last century. It is from 1943, and, with this labour modernisation, we brought this legislation to the 21st century.
Interestingly, for the benefit of the two productive sectors of the country, entrepreneurs and workers, because I aimed at the idea of doing labour modernisation was to increase the possibilities of work.
And in fact, this is generating results. Little by little, Brazil has been recovering its employment capacity. Suffice to say that this year, until the end of the year... In fact, just yesterday we were in a solemnity with the supermarkets and the Minister of Labour was with me, and he announced that, by the end of the year, we will have at least more than one million formal job contracts. And on the side of one million formal contracts, it is more than two million and two hundred thousand job positions added.
"Job positions" means the following: people who were not able to start any activity before, after the warming up of the economy were able to start small businesses, and this was much the result of what Rubens Hannun said, with simple measures that we have taken. For example: I am going to give... I will reiterate the example of the dormant accounts of the Workers Severance Indemnity Fund. "Dormant" means they were occupied, they are not active, they were inactivated.
And that only created income for the government. So what did we do? How much do we have in dormant accounts here? We have 44 billion reais, so we will deliver it to the workers who are the real holders of these accounts and we will inject money in the economy. This meant a capital contribution to 25 million workers. People who used it to pay debt, to renovate their houses, something of that nature.
Likewise, the so-called PIS/PASEP, which is a contribution paid by private sector workers on the one hand, and public service workers on the other.
Do the ladies and gentlemen know when this PIS/PASEP money stopped being received? Since 5 October 1988, when this possibility was eliminated. And this is money that belongs to workers, and which the State was enjoying it instead.
Well, we released PIS/PASEP funds to all men and women of any age who could withdraw them, meaning more than 23 million reais in the Brazilian economy.
That is why when I say that we reopened 2 million and 200 thousand new jobs, it is exactly and precisely because of these, of these numbers.
I am taking the liberty of stretching my speech a little, because I see that the ladies and gentlemen are paying attention and I want to propagate a little of what our government has done. In addition... Yes, we did more, you see, because from time to time, we see (inaudible), and they say: “Temer did this public spending ceiling thing to end healthcare and education in the country”.
We must agree that, at that time when we were in the process of amending the Constitution, that it was called the PEC [Proposed Constitutional Amendment] of Death. Because it was going to end healthcare and education.
Our fellow deputies here know that with every budget we have made, we have increased funding for healthcare and education, something that was not done in the past, was it? And even more, if we look at social issues, because this country is still a country that has a lot of poverty... When we took over the government, [we had] the so-called Bolsa Família, which is more or less a welfare programme to enable those who are in extreme poverty to at least feed themselves. For two and a half years there was no increase. We arrived and gave an initial increase above inflation and subsequently, another increase also above inflation.
But we found that, in order to achieve true social inclusion, it was not enough to establish or maintain only Bolsa Família. It was necessary to make people progress, and so we created a programme called Progredir ["To Progress"]. We called entrepreneurs, big business sectors, and asked them to start hiring the children of those who receive the Bolsa Família. At this point, more than 220 thousand young people have been hired through this programme called Progredir, that is, true social inclusion.
I will give you another example, which was mentioned here, of upper secondary education reform. You know that a long time ago, and look... I was president of the Chamber of Deputies for the first time in 1997, the first time in 97/98, and there was already talk of upper secondary education reform, because young people did not know math, did not know Portuguese, did not know history, did not know geography etc. So it was necessary to make upper secondary education reform.
We got there, we arrived and right at the beginning we decided to do upper secondary education reform. So I spoke to the Minister of Education, and I said: "Look, this is not necessary, it is not advisable to propose a new bill, because there are already many bills there that are being discussed. I'll do it through a provisional measure. It's a bold gesture, but I'm sure it will work."
So we really did it. There were protests; you remember, don't you? Some young people occupied schools etc. Very well, soon afterwards, the provisional measure was converted into a bill. I sanctioned law, and it was sanctioned at a meeting in the Palace with all the secretaries of education of the Brazilian states. 96% of the education sector approved the upper secondary education reform.
So, we have been taking bold steps that have worked. You remember that, in the case of Petrobras, four years ago, Petrobras was almost a dirty word. We have recovered Petrobras, which today makes a profit and is internationally recognised again.
Banco do Brasil, for example, its shares when we got there were valued at 15 reais. Today the value is 45 reais, that is, this public equity increased 3 times.
Similarly, Caixa Econômica Federal had the biggest profit, in recent times computed for all previous years, is it not? Correios [Brazilian Postal Service], for example, were yielding consistent losses, and for the first time this year the postal system made a profit.
I'm going to tell you something that's interesting about settling people on their land or their house. You know that certain social movements prevented the granting of title deeds. We have awarded, in our administration, between urban and rural deeds, more than 220 thousand deeds of property, which means more than the three past administrations combined.
We have done this over time. This serves to create a certain social stability.
I had, at the beginning of our administration, a radical opposition, a fierce opposition, but what I did was that I exercised Arab serenity. I was not bothered with what was being protested, and exactly and precisely due to that serenity, of this temperance, which we all know how to exercise, we managed to overcome the difficulties. And all these, these measures have led - I will say the obvious here - to a reduction of interest rates from 14.25 to 6 and a half, led to inflation that went from 10.28 when I came to power to less and 4%. So, below the target.
All this, my friends, within two and a half years. All this was possible because we had responsibility as a principle and dialogue as a method.
In fact, it was inspired by responsibility and dialogue that we made a point of carefully preparing the transition to the government of President-elect Jair Bolsonaro. Our teams are working together. We are doing everything to make the process smooth and productive, so that the new administration can come on January 1st ready to rule, and that was the tone of the conversation I had with the president-elect of Brazil.
In fact, what I have seen in the last few comments is that a long time ago there was no transition as civilised as is being done at the moment. Because we should not all think of ourselves, we should think about the country, shouldn't we? So much so that I invited Bolsonaro, President-elect Bolsonaro, to go with me to the G20. The G20 meeting will take place in Argentina on 30 November 30 and 1 December, with the 20 biggest powers of the world. I said: "Look if you go with me, I have good rapport with all these international agents and rulers, which, naturally, not only will I introduce him to, but this will also reveal, in the eyes of the world, the interaction, the integration, the connection, between the current administration and the elected administration; in general, when someone is going out of power, they often abandon the country as if it had nothing to do with them. We are aware that, until 31 December, we are the ones who govern, and must lead the country to good terms, including in these international relations.
And, by the way, I would like to say to the ambassadors of Arab countries, that I touched on these matters with the president-elect, and interestingly I heard from him an affirmation of great respect for Arab countries, in the conviction, as I said to him, that a good part of the exports mentioned here go to the Arab countries, just as I mentioned the case of China, which is our biggest economic partner.
And all this, your excellency, the president-elect is aware of this, and aware of the importance of these facts. Of course, in the election campaign... And here I must tell the ladies and gentlemen the following: in Brazil you have two moments: you have the moment of the electoral campaign, which I call the electoral political moment, of course, there is controversy, contestation, divergence. When election comes, and popular sovereignty manifests itself by electing the president and other public agents, you go through another moment, the administrative-political moment, in which everyone, without exception, has to unite, has to hold hands for the common good of all Brazilians.
And this is what we have done. We have carried out this formula very smoothly, with much serenity, and I think it is working, isn't it?
So I want to thank you for this dinner. I want everyone to have a good meal, and I'm very happy that when I came here, I said: Is dinner going to be Arabic in theme? God willing it will be, because I really appreciate Arab food.
So thank you very much. Shukran!