The president Michel Temer talks to T&D
The President of the Republic Michel Temer – When I first took office as acting president, Brazil was plunged into a deep recession. And we overcame it as a result of sound work and dialogue with many sectors. After less than a year, the Brazilian economy already shows signs of recovery. Just to mention some examples, inflation was 10.7% in January 2016 and plummeted to 5,35% in January 2017. We passed important measures in the National Congress, such as the Divestment of the Union’s Revenues (DRU); the spending cap, which limits government expenditures for ten years and allows for budgetary control; we extinguished more than 5.000 public functions; we enabled withdrawals of the Workers’ Severance Funds (FGTS) accounts and we have been working on important reforms, such as pension and tax reforms. The meaning of these and other measures is the restoration of trust and of Brazil’s credibility. Due to these measures, investments have increased; the Brazilian Real has gained value against the dollar and Brazil’s credit risk rating reduced by 51,3% within a year. Interest rates also started to fall. I often say that we eliminated recession and that we are now seeking development and growth. Brazil has a bright future.
T&D – One of Your Excellency’s initial brands was changing Brazil’s foreign policy. Could Your Excellency comment on this change?
President Temer – We put Brazilian foreign policy at the service of Brazil and in tune with our priorities. We take advantage from the potential of diplomacy as a tool for recovering growth and employment. This is a vocation for diplomacy: to open markets and to attract investments. In my missions abroad, the message has been clear: Brazil is getting ready and this is a moment for opportunities. The foreign policy of my office is aligned with the efforts to overcome the crisis.
It is also aligned with our best tradition of universalism and defense of liberties and human rights. Brazil has relations with every country. We are prompted by the pursuit of consensus, taking into account respect and dialogue. In South America, our neighborhood, we act together with our regional partners, to build a space of democracy and prosperity. We also cooperate with our partners to combat organized transnational crime for the safety of our cities, schools and families.
T&D -The industry of defense and security is especially leveraged by new technologies and is potentially export-oriented. How could the government help promote Brazilian products of this industry, taking as an example the institutional work made by the political leaderships of the world´s greatest powers?
President Temer – The industry of defense is in the Government’s agenda. It is a cutting-edge sector that prepares highly qualified professionals, and promotes research and innovation, which are fundamental aspects of a modern nation. There is, still, a clear correlation between defense and development: besides creating jobs, the consolidation of the defense industry has a radiating effect that benefits other areas, such as civil aviation. Our Government has made efforts to improve the productive environment in Brazil and to make our exports even more competitive. These efforts also apply for the defense industry.
T&D – During times of economic decline, the budgets of the Armed Forces are among the most affected by restrictive measures. Hence, there is an impact on re-equipment and on technological updates, which affects the maintenance of the desirable operational capacity. How has Your Excellency’s administration followed this matter? How can the present reality influence the reassessment of the National Defense Strategy in course?
President Temer – It is true that we face a period of fiscal adjustments, during which it is necessary to reevaluate our expenditures taking into account our revenues. Nevertheless, there are sectors that deserve more attention, such as Education, Health and Security. In 2017, we have increased health and education budgets in 10 billion each, compared to 2016. In the fields of Security and Defense, we are fostering the strategic projects of the Armed Forces, which were slow-paced in the previous administration due to the lack of resources. The payments made in 2016 were significantly higher than those of 2015. Whilst in 2015 16.5 billion were disbursed, in 2016 the figure raised to 21.3 billion, which represents an increase of 4.8 billion. The protection of our borders is crucial to combat illicit activities.
T&D – Even though the Federal Government exempts the States from taxes to purchase defense and security supplies, it does not happen the other way round nor among the States. Considering that the exemption from the sales tax ICMS would increase the purchasing power of the federal bodies and of the state polices, is there any study aiming at extending the exemption to the strategic sector of defense?
President Temer – Indeed, this is a recurring problem faced by the sector and some arrangements have been initiated to reduce distortions. We have been talking to the finance secretaries of the states to address the double taxation of the ICMS.
T&D – Projects of materials for military use (MMU) demand a long time since their [conception] throughout their deployment. There is also the problem of the scale of production. Hence, it is necessary a constant flow of inputs to meet the deadlines. Considering the gain of knowledge and technologies, in which the MMU are intensive, how does Your Excellency think of a way to keep an adequate rhythm of production according to the present reality?
President Temer – Defense is an important sector for national development. The production of materials and equipment needed to supply this sector requires high technological levels, and also transfer of technology. However, only an economically balanced country can provide an environment conducive to business and investments and hence develop the sector. This is our homework, which we have been doing through the reforms we have presented to the Congress.
T&D – Due to its relevance in the world scenario, it would be natural for Brazil to be an exporter, instead of importer, of defense and security materials. However, current legislation stimulates imports with a zero excise tax. How does the government see this question?
President Temer – Even relying on a sound Defense Industrial Base and with a high level of knowledge, we still have to import some products and technologies which we do not fully dominate. The reduction in the volume of imports with a high level of technology depends on the national investment in our industry. In this moment, it is important to invest in projects that bring new technologies to Brazil. In this regard, we are fostering research. The Ministry of Sciences, Technology, Innovation and Communications alone had its budget for research increased by 5.65%.Also, Brazil will count on a new satellite communication system when the geostationary communications satellite is launched in Kourou (French Guyana). This new system will be capable of hosting the flow of information of the Armed Forces and also of amplifying the broadband in Brazil from March 21st. This will enable a faster and more effective access to the Internet to Brazilians who live in the most remote regions.
T&D – Taking into account a new world reality, in times of globalization and of the Internet, how does Your Excellency interpret the concepts of national sovereignty?
President Temer – We live in a world where there are no boundaries when we speak of the Internet. And that represents a great challenge to every country. Ensuring the security and the fluidity of important information for the country requires investments. No country is immune to cyber-attacks, but Brazil has paid attention to that and invested decisively on this matter. The work of the Armed Forces during the Olympic and the Paralympic Games in Rio in 2016 was an example of this role. We showed the world a serious work of information security. Even though attempts were made, no cyber-attack disturbed the events.
T&D – The Armed Forces are permanent institutions whose character often transcends their constitutional objective, namely in the case of the national integration. What does YourExcellency think about this?
President Temer – Brazilian Armed Forces are always ready to perform their constitutional mission. They are the presence of the State all over the country, especially in the farthest places, where they provide security and assistance to the people. As Coordinator of the National Strategic Plan of Borders, I had the pleasure to accompany the work of the military of the Army, the Navy and the Air Forces in the Ágata operations, which rely on the support of other respected federal and state institutions.This is a serious and exemplary work, focused on the good of the Country. In my office, the Forces were successful during the Olympics, as well as in operations to secure law and order during security crises in states, as it recently happened in Espírito Santo and Rio de Janeiro. I still mention the scanning work in detention facilities, in support of state security officials. Of course these were emergency actions in which we had to deploy the Armed Forces, but I have it clear that the military are not the police. This role is to be played by states authorities.
T&D – One of the major concerns of the Brazilian population is related to public security. The government has recently presented a Security National Plan to address the problem, where the effectiveness of the National Security Force is foreseen. Does Your Excellency consider this a sufficient measure? Would it not be the case of presenting a broad review of the entire juridical penal framework, so as to have laws more attuned with the severe reality of nowadays? What can society expect from the creation of the Ministry of Justice and Public Security taking into consideration the attributions defined in the Constitution?
President Temer – The National Security Plan puts forward a broad partnership between Federal and state governments.Itencompasses a wide spectrum of actions engaging several agencies from the Ministry of Justice and Public Security and the Ministry of Human Rights, considering three core objectives: (i) combatting murder, femicide and violence against women; (ii) rationalizing and modernizing the prison system, and (iii) combatting organized transnational crime, such as drug and arms trafficking. For the first time, the Federal Government considers security in support to states as a priority, by presenting concrete actions to deal with the problem. And this is the great difference. We transferred 1.2 billion Brazilian Reaisfrom the Penitentiary Fund to states in order to build prison facilities and purchase equipment, and 230 million Reaisto install and upkeep cell phone signal blockers and to build five new federal maximum security prisons.