Associação Brasileira de Celulose e Papel (Bracelpa)
The appraisal of the Brazilian economy in 2000, under many aspects, is widely positive. In light of certain parameters, the country consolidated its moderate growth, without compromising its stability.
During 2000, no unforeseen event occurred and the economy kept a reasonably state of normality throughout the whole year.
The main outstanding aspect is the recurrence of the economy growth, with the GDP increasing 4 percent after a two-year stagnation period.
The adjustment of the economy, the improvement of the general financing conditions and the increase in exports as a response to the exchange rate policy, denote the return of the growing state of affairs.
The increasing employment rate is also to be underlined, as a result of the economy recovery.
The inflation rate, in spite of some significant supply impacts as the petroleum price increase, remained at a yearly rate of 6 percent.
The Brazilian trade balance revealed a deficit of US$700 million at the end of 2000, lower than the US$1.2 billion of the year before. The exports, facing depressed commodity price in the international market, and the low dynamism of the Latin American economies, important market for our industrialized products, reached US$55.1 billion.
The total figures for imports were US$55.8 billion, considering that our productive structure is more integrated to the world economy, depending on imports as a supply source.
The economy policy reflects the compromises with the International Monetary Fund, a more favourable international scenario, while the fiscal policy was settled by the need to achieve the goals of a fiscal surplus, established on the previous year.
With regards to the institutional changes, the Law of Fiscal Responsibility was approved, which opens the opportunity to check the prudence of the fiscal administration of the federal, state and municipal authorities.
The monetary policy, which succeeded to achieve the inflation rate goal, frustrated the early expectations for a faster interest rate reduction.
The exchange rate policy was consistent with the adopted fluctuation rate regimen, and the high intensive pressure on the rate was controlled with a greater offer of foreign exchange indexed bonds.
Preliminary data for 2000 indicates that chemical and high yield pulp production grew 3.2 percent totalling 7.4 million tonnes.
The biggest contribution came from the bleached hardwood pulp, with 5.3 million tonnes, followed by the unbleached softwood pulp, with 1.3 million tonnes.
Softwood pulp production is mostly concentrated in the integrated mills, for own use.
Imports are necessary to supply domestic market demand.
The domestic consumption of pulp, consisting of integrated production and market pulp, grew by 200 000 tonnes, reaching 4.4 million tonnes in 2000. This volume corresponds to a 4.6 percent growth rate and represented 59.3 percent of the Brazilian production. As the domestic market grew at a fast pace, in order to keep market supply, export companies directed part of their pulp originally designated for export, to the domestic market.
During 2000, export as well as import volumes were lower than in the year before. Exports reached 3.0 million tonnes, decreasing 3.1 percent and imports, equalling 367 000 tonnes, fell 5.7 percent. Meanwhile, as the international price recovered during the period, the trade balance reached a surplus of US$1.4 billion.
The performance of the Brazilian paper industry in 2000, as well as in the international highly competitive market, was affected as paper producers did not succeed in inserting the pulp costs increases into the final paper price.
The production of 7.1 million tonnes of paper, meant a growth of 2.1 percent over the year before. The most significant segments in the production were the printing and writing, and wrapping, which contributed respectively with 29.5 percent and 45.9 percent, totalling 75.4 percent of the national production.
Domestic paper sales, impelled by the economy growth, better financing conditions and better employment rate, reached 4.4 million tonnes, a growth of 6.3 percent over 1999.
Paper exports, depressed by the conjuncture of the devaluation of the Euro against the US dollar, reached US$1.2 billion, 8 percent lower than the results of the year before.
As the paper import kept unchanged its share of the domestic consumption, it grew from 750 000 tonnes to 839 000 tonnes, representing a disbursement of US$732 million.
The pulp and paper trade balance ended the year with a surplus of US$1.5 billion, an increase of 19.6 percent over 1999, with exports and imports reaching to US$2.5 billion and US$969 million, respectively.
The apparent paper consumption evolved from 6.4 million tonnes to 6.7 million tonnes in 2000, representing a growth index of 5.3 percent, with a per capita growth of 2.1 percent, corresponding to 39.6 kg/inhabitant.
The pulp and paper production in Brazil is reaching its practical maximum capacity. With the economy growth demanding more paper to supply the domestic market and the need to keep its positive results in the Brazilian trade balance, there is demand for an immediate retaking of investments for new capacities.
At the end of 1999, in an audience with the Minister for Development, Industry and Foreign Trade, the sector announced its National Investment Programme to expand its pulp and paper capacity till the year 2005, in the amount of US$6.6 billion, regarding forestation (US$900 million), pulp (US$4.1 billion) and paper (US$1.6 billion).
The materialization of these investments will enable a substantial growth of our exports, mainly of pulp besides the better supply of the domestic market, with positive reflects on the trade balance.
The sector is fully aware and has already demonstrated to government authorities that tributary and monetary issues weaken our competitiveness and must be eliminated to allow us to reach competitive isonomy with our international competitors.
Before the present troubles in CoP6, the Brazilian Government preliminary thoughts about the use of clean development mechanism (CDM) projects in the country were very positive, mainly focusing the following:
- renewable energy sources;
- energy
conservation/efficiency;
- reforestation and new forestation;
- other
emission reduction projects (combined agriculture and stock raising).
To give strength to this propositions, an economic and social development national financing institution should be responsible for the creation and promotion of a special fund to buy and maintain `a stock of corresponding carbon emission reduction certificates' (ERC) for the approved projects. The idea is that the institution could finance projects to be developed and implemented in the country which are reliable in terms of bringing real emission reduction of greenhouse gases. The financing institution would pay around US$1.00 to US$10.00 to each avoided tonne of carbon dioxide in the air. These values are low due to the uncertainties of future demand on ERC.
For the project categories not acceptable in terms of the future CDM Executive Certification Board, at least this institution could have accomplished its function of financing the national development.
Dealing with the forest industry point of view, CDM will give strong opportunities for reforestation:
- reduce the reforestation pressure over native
forests;
- reduced time for forest (plantation) maturation;
- wood
multiple use;
- reparian buffer zones recomposition;
- recovery of
degraded land;
- new forest projects/reforestation for industrial purposes.
It is estimated one job place for each 80 tonnes of carbon removed for projects sized about 350 to 450 x 103 ha/yr.
The private initiative hopes that the government formalizes immediately the `Agreement between parts' with the World Bank for promoting certification; for the pilot projects already formulated and pre-selected by the World Bank, an institutional government agreement is necessary.
The country and the pulp and paper sector recognize the potentiality of CDM to the attraction of external investment for economic, social and environmental development of the country.
Brazil has already 12 forested areas certified by the Forest Stewardship Council (FSC), totalling 717 000 ha; 44 certified products in custody chain, which permits to sell certified products, originated from certified forest raw material and, eight companies certified in conformity to ISO 14001 standards, which totals 973 000 ha.
The Brazilian Institute for Environment is taking care of this subject, estimating that in the Amazon area there are 3 million ha with an approved forestry management plan, of which, 800 000 ha with the certifying process under way. The Institute began the introduction of a pioneer model for nature preservation, by establishing ecological corridors, connecting several protected areas in an ecoregion or bioma, widening the conventional conservation system, covering still unprotected spaces, by connecting extensive areas and entire ecosystems.
Forest certification is turning into a matter of vital importance for the forest industry, able to affect its activities at several levels. Most of the demands for certification come from companies exporting to the United States and Europe.
In Brazil there are two forest certification systems being developed: the Forest Stewardship Council/Brazil, which Brazilian standards have already been approved and are soon going to be submitted to FSC/International and CERFLOR which is well advanced, having been recently transferred to the Brazilian Association of Technical Standards, to ensure wide credibility to the system.
The revision of both systems are necessary to align them with the concepts of certification systems, which are being established at an international level by the International Forest Industry Roundtable, among other initiatives.