Source: Global 21 - RS - 29/09/2009

The latest edition of the Global Competitiveness Report, annual publication of the
World Economic Forum (available at http://www.weforum.org), highlights that Brazil
rose eight positions in the global competitiveness ranking in 2009, from the
6

Although it is a complex phenomenon, with several determinants, many of which
act simultaneously and reinforce themselves, competitiveness can be defined as
the set of institutions, policies and factors that determine the level of
productivity of a country, which in turn ensures the level of prosperity
that can be achieved by the economy. In this way, a more economical
competitive, with high productivity, tends to generate lower income levels
high for its citizens, as well as high return on investments, driving
fundamental for medium and long term growth.

To capture the multiple aspects of this complex concept, the
Global Competitiveness seeks to quantify each of the 12 pillars of
competitiveness:

      1st. Institutions. The environment
solid institutional framework, characterized by institutions and legal and
quality administrative work is essential for competitiveness and for the
growth.

      2nd. Infrastructure.
Comprehensive and efficient infrastructure is an essential driver of competitiveness,
is one of the factors determining the location of economic activity and the type
of sectors of activity that can develop in a particular economy.

      3rd. Stability
Macroeconomic. The stability of the macroeconomic environment is important
for a country's business and competitiveness.

      4th. Health and Education
Primary. A healthy and well-educated workforce
Adequate is vital to a country's productivity and competitiveness.

      5th. Higher Education and
Training. Quality higher education and continuous training
it is also crucial for economies moving forward in the value chain.

      6th. Efficiency in
assets. Healthy competition both domestically and
international market is an important driver for the efficiency of the goods and
services and for greater business productivity.

      7th. Market Efficiency
Jobs. The efficiency and flexibility of the labor market are
critical to ensure both the allocation of workers to the best use of
talents in the economy as the appropriate incentives for them to give their
best efforts.

      8th. Sophistication of the Market
Financial. An efficient financial sector channels resources to
investment projects with the highest return, through a
adequate risk assessment.

      9th. Availability of
Technology. The speed with which the economy adopts existing technologies
to raise the productivity of their industries is a fundamental component of the
competitiveness in the globalized world.

      10th. Market Size. O
Market size affects productivity because larger markets allow
exploit economies of scale.

      11th. Sophistication of
Business. Expressed in the quality of the country's business networks and
operations and strategies of individual companies, business sophistication
leads to greater efficiency in the production of goods and services, favoring increased
productivity and, consequently, the nation's competitiveness.

      12th. Innovation. Only the
innovation guarantees a high standard of living in the long run. In those economies
in an advanced stage of development, companies need to continually
innovate in products and processes to remain competitive.

Combining quantitative information from international statistics with
qualitative information obtained in the opinion poll conducted with the
business community in 133 countries, the Global Competitiveness Index (IGC)
provides a portrait, as close as possible to reality, of the economic environment
countries and their skills in achieving and maintaining sustainable levels of
growth and prosperity.

In relation to Brazil, the report points out that, since the 1990s,
when it opened the economy and adopted measures in favor of
fiscal sustainability, the country has been strengthening the fundamentals of competitiveness
and improving the environment for private sector development. In relation to
year 2008, the Brazilian economy registered additional advances, notably in the
which refers to the sophistication of business and the strong potential for innovation. Beyond
addition, the country also has, as advantages, the size of the domestic market and the
degree of development of the financial market.

Likewise, in a research complementary to the analysis of the ICG, carried out with
sixteen economists, on the impacts of the crisis in thirty-seven countries, the
Brazil is appointed, alongside China, India, Canada and Australia, as one of the
five economies whose competitiveness is expected to increase as a result of the recession
worldwide. In the opinion of these economists, Brazilian competitiveness would be the
most favorably affected by the crisis among these five economies.

However, Brazil has a series of deficiencies that prevent the realization of
competitive potential and the reduction of poverty and income inequality.
The institutional environment, macroeconomic stability and efficiency of
The goods and labor markets continued to be poorly assessed, despite
progress made in recent years. Furthermore, the areas of education
education and health and higher education and training also require
substantial improvements. Despite the progress already made, the report
stresses that additional effort is needed to raise the quality of education and
reduce regional disparity. Also in the infrastructure pillar, the economy
competition presents a competitive disadvantage, especially with regard to
quality of roads and ports.

The report also presents the results of the Economic Forum survey
World Bank on the main obstacles identified by executives for the
conducting their business. According to Brazilian executives
interviewed, the main problems in Brazil are, in order of importance,
tax legislation, the weight of taxation, labor legislation
restrictive, the inefficiency of state bureaucracy, the difficulty of access to
financing, inadequate infrastructure provision and corruption.

Source: Letter IEDI (29/9/2009)