BlackRock’s View on Brazil Has Rousseff Seeking Another Chance

President Dilma Rousseff is asking investors in New York to give her country a second chance as BlackRock Inc.’s chief executive officer says Brazil’s economy is expected to bottom out this year.

The president and select cabinet members offered investment opportunities in airports, roads and ports comprising her 198.4 billion-real ($64 billion) program to jumpstart growth and tackle logistics bottlenecks. Rousseff in 2013 made a similar trip to the U.S. to promote an infrastructure plan that failed to live up to expectations.

This time Brazil is trying to make contracts more attractive as it focuses on improving productivity to preserve wages and profits. With 2015 expected to be the “bottom” for Brazil’s economy, the president’s investment plan may lure investors seeking longer-term opportunities, BlackRock CEO Larry Fink said at a forum for investors.

“Pension funds and insurance companies are looking for high-quality, long-dated assets,” he said in New York Monday minutes before Rousseff spoke at the same event. “If we can provide our clients globally with infrastructure investments in Brazil that represent those two characteristics, we will have a large pool of money to invest in those projects.”

Rousseff during her three-day trip to New York held private meetings with firms such as BlackRock, Citigroup Inc., Warburg Pincus and JPMorgan Chase & Co. She also met business leaders, including executives from Wal-Mart Stores, Inc., Lockheed Martin Corp. and American Tower Corp.

‘New Cycle’

“Brazil is building the foundation for a new cycle of growth,” Rousseff said at the investor event on Monday. “Measures to control inflation and achieve balance on the fiscal front are part of that strategy, as well as all measures to increase investments and productivity.”

Brazil’s $2.2 trillion economy will shrink 1.5 percent in 2015, with inflation quickening to 9 percent by year-end, according to a central bank survey of analysts published Monday.

Rousseff’s previous infrastructure program, which included caps on profits, didn’t hold a single railroad auction after putting up 14 new contracts for concession in 2012. A planned 35 billion-real high-speed train to link Sao Paulo with Rio de Janeiro was shelved the next year.

Now the government will be more flexible, applying different models to ports and railways in an attempt to ensure interest in the auctions, which include the option of bidding in cash or for the lowest toll rate. The government may also give road operators more time to meet investment requirements.

The program won’t be derailed by the corruption probe at Petroleo Brasileiro SA, which has prompted investigations of some of Brazil’s largest builders, according to Budget Minister Nelson Barbosa.

“This is a localized issue,” Barbosa said at the investor event Monday. “It doesn’t put at risk this investment program, and it doesn’t put at risk the recovery of the Brazilian economy.”


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