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Interview

with Eduardo Gouvêa Vieira, Chairman, FIRJAN – Federation of Industries of Rio de Janeiro

01.04.2010 / Energyboardroom

Over 50 years ago the capital shifted out of Rio de Janeiro to Brasilia after which there was a vacuum created by the absence of government and in turn the financial sector moved to Sao Paulo. This of course led to a slump in the region where the role of FIRJAN was clearly defined. In contrast the Rio de Janeiro of today is doing very well for itself so what is the role of this group now?

Our role is to help the society of Rio de Janeiro which is why we work to develop local companies as well as bring business to the city. To do this we need to make sure the community has the necessary qualifications for business and provide economic studies on the region. On top of these responsibilities we seek to aid those employed receive appropriate healthcare in order to create a better life for them and the companies.

FIRJAN is completely apolitical but we work alongside municipal, state and federal government in order to fulfill our responsibilities. In addition we are partnered with international organizations as well such as the International Labor Organization (ILO).

What role does FIRJAN play in attracting outside events to Rio?

Just last week we held the [Olympics of Knowledge] which was a fantastic event where we had 46 people from Brazil as well as contestants from all over Latin America and even representation from the Netherlands. This is an example for young people not only in Brazil but the whole world: they can dream and if they study the sky is the limit.

We have 4300 people working in 57 units around Rio de Janeiro and as such we organize the logistics which for an event like this takes nearly a year of planning in order to handle the 80,000 people coming to the city and over 600 people competing. FIRJAN is the largest institution for education here.

Rio de Janeiro recently won the Olympic bid against cities like Chicago, Tokyo and Madrid; what role did FIRJAN have in this?

FIRJAN is an active player in Rio de Janeiro’s society so every issue that is important to this state we are involved in. For example, I personally visited London with the governor to see what is happening in their city in preparation for the 2012 Olympic Games. We also have a track record of effort for these events: for the Pan-American Games we qualified 12,000 people to host participants. These were important examples to go in our bid file.

The entire agenda of Rio de Janeiro is not based solely upon the companies but rather the impact to society as a whole.

Rio de Janeiro has benefited greatly from the development of the oil and gas industry. Nevertheless, of the recent pre-salt discoveries a lot happens to fall in the state of Sao Paulo. Do you feel these new offshore findings an opportunity or challenge for the state?

The pre-salt discovery is massive measuring 800 km north to south and 200 km east to west so there is more than enough territory but I defend that the best portions are along our coast. Located within our state is the ANP, IBP, ONIP, Petrobras and all the international industry players so we control the oil and gas atmosphere in Brazil.

Rio de Janeiro has a different charm that sets it apart from other oil capitals of the world such as Houston. Like the US, our country is young but settled by much different people so our culture is clearly different. This was the first and only international capital of a European nation when the King of Portugal fled from Napoleon’s invasions in the early 1800s. Before this event occurred Brazil was not on the map for most of the world and immediately we became an open city.

We receive everyone and there is an obvious mixture in everything about us. I feel Rio de Janeiro in particular is a resume of Brazil as a whole: you have a sampling of everything for better or worse in this city. This is the birthplace of Brazilian writing, cinema and music; it’s completely different from Sao Paulo.

When the capital moved from Rio de Janeiro to Brasilia the people here were obliged to follow the decision of government. Unlike when Germany transferred its capital from Bonn to Berlin, no one compensated our city when the politicians left. We went through hyperinflation in the 1970s and 1980s which led to two of our key sectors – construction and shipbuilding – disappearing overnight.

It’s correct to assume that we suffered for sometime but then Petrobras found oil offshore. The decision in 1997 to open up the oil market to foreign players was crucial for the development of our region: all the people who compete here today would not be present without it. For Petrobras the competition has contributed to making it one of the largest oil and gas companies in the world.

Part of FIRJAN’s role is to balance between these international companies and the government. How do you play this line between national interest and exterior involvement?

Firstly I would note that Brazil is a democracy with freedom of press that allows people to speak their mind and act independently.
Secondly, the people here are open and cognizant of the fact that we cannot live without foreign capital. The challenge to explore the pre-salt region is enormous and it’s impossible to think that Brazil alone can face it, regardless of what the politicians say.

Thirdly, the behavior of the Brazilians today is much like that of the Germany’s after the Second World War: we no longer allow inflation. This is a fundamental difference from our past when for several decades we allowed currency to run wild. Starting in the early 1990s we began to redesign Brazil so the country today is very different to that of yesterday. The laws have changed so that elected officials can no longer spend more than what they take in each year otherwise they theoretically go to prison. This means there is not option to spend in line with inflation which is critical for the stability of the country.

When you combine these three factors Brazil is an attractive nation for outside companies to invest in as they know they are protected by the environment established here. The changes are evident, for example the Brazilian National Development Bank BNDES used to be exclusively for domestic companies yet today is open for all.

Having the economic basis and framework for companies to enter is one thing but you also need to have the right people and skill sets to be employed when business come looking. How are you dealing with this?

While this piece of our agenda is a challenge it’s a good problem to have at a time where the world is expanding. We need to take the people in our economy with 19th century skills and train them into the 21st century. One of our divisions – SENAI – is working hard in this sector to provide the education needed both at the basic and technical level in order to ensure the population is employable.
The important thing is to grow up believing you can achieve which is something I saw in the youth here last week.

The last few years has seen the development of a technology park created in cooperation between CENPES, UFRJ and industry. What led to its creation?

Rio de Janeiro has the highest number of research institutions in Brazil and this site you refer to is a fantastic lab initiated by CENPES, Petrobras and UFRJ. The academics here are among the best and because of the direct presence of industry in the region there is a continued collaboration – all of the deepwater technology developed in Brazil was made in these researchers.

When I was younger, those looking to enter oil industry went to Paris for their studies but today no one really considers this an option. This change is reflected in industry as well; in the past Petrobras would send people to Aberdeen platform simulation. Today, people come from around the world to learn here in Brazil! When you go to Macaé you notice that everyone in the street speaks English.

Considering 80% of the oil and gas resources of Brazil are in Rio de Janeiro, how do you factor in a green approach to development?

Sustainability is fundamental for every sector because if we do not pay attention to both the economic and environmental impact of our development then there is no 21st century business to be made. Furthermore, if a company is not aware of the environment while they produce then in today’s world no one will want to buy from them.

Do you think Brazilians are aware of the responsibilities they have in terms of developing new technologies for the industry and creating new possibilities?

Due to the assets we have Brazil needs to speak on the friendly terms with the US, Europe and the rest of the civilized world rather than follow the line of some other oil producing nations. We are a Western nation and we should engage other Western nations appropriately to develop this opportunity.

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