MercoPress. South Atlantic News Agency

Lula da Silva tries to convince top US corporations and banks to invest in Brazil

The former leader was 'very positive' and 'confident' as well as 'quite convincing'

Former president Lula da Silva lobbied strongly on Thursday in New York trying to convince US investors to make business in Brazil during a conference to members of the American Society and Council of Americas, which organized the event.

 The day before, the U.S Federal Reserve classified Brazil as the most vulnerable emerging market to external shocks out of 15 nations, coming second only after Turkey.

However Lula da Silva told investors that the recent predictions by economists had been exaggerated and highlighted Brazil's growth over the past 11 years, since the ruling Worker´s Party (PT) has been in office.

“Lula´s main message was you shouldn´t be afraid to invest in Brazil,” said a businessman who talked on conditions his name was not revealed. As the speech was exclusively to members of the organizers and their guests, most participants preferred not to comment on Lula´s speech.

The Council brings together important representatives of U.S. and global banks, such as JPMorgan, Bank of America, Citigroup and Santander, as well as big companies, Microsoft, General Motors, Pepsico and Boeing.

According to a banker present at the talk, Lula da Silva was “very positive” and “confident” about the Brazilian economy and was “quite convincing” and 'persuasive' in doing so. But the former president did not offer stats to illustrate the apparent good performance of the Brazilian economy despite some slowing down in the last two years.

Apparently Lula da Silva admitted that Brazil suffered competitive deficiencies, but at the same time said the rise in wages and benefits for Brazilian workers benefited the economy.

“We don’t want to be competitive like China is, where there’s no welfare program, where you have no obligation to the workers, pension funds, trade unions, and people earn very low wages,” he said. “We don’t want that model for us. We’re doing well as we are today”.

In January, the IMF downgraded its forecast for Brazil´s GDP growth in 2014 to 2.3%, 0.2 percentage points less than was previously expected. In 2013, Brazil also registered a record current account deficit of 81.4 billion dollars or 3.66% of its GDP, the worst result since 2001.

The Fed pointed at Brazil´s foreign trade, highly dependent on commodities (and China) as one of the main vulnerabilities as well as the size of its foreign reserves/GDP ratio, government´s gross debt/GDP ratio, as well as inflation over the past three years.