Prime Minister Shinzo Abe and his Brazilian counterpart, President Michel Temer, agreed Wednesday to pursue economic cooperation in infrastructure projects, while the new Brazilian president seeks foreign investment in a bid to shore up the nation’s battered economy.
The two leaders reached a deal to set up a committee for infrastructure projects as Japan aims to export its quality infrastructure to the South American agricultural powerhouse, which has a population of 200 million.
“Brazil offers a chance for Japan with a big investment opportunity in infrastructure projects,” Abe said at the joint news conference with Temer.
Temer, who took office some two months ago, promoted his new deregulation programs such as privatization. He also reassured Abe that the rule of law is in place in the country, which was thrown into turmoil following the impeachment of former President Dilma Rousseff, who was ousted from office at the end of August.
“(In order to expedite deregulation) we need to promote trade and seek foreign investment in Brazil by restoring trust in us,” said Temer. “Since there are around 700 Japanese companies in Brazil … I would like for them to expand their investment.”
Japanese direct investment in the South American country amounted to nearly $2.9 billion in 2015, according to the Japan External Trade Organization, a drop of $900 million from 2014.
Temer’s visit here was the first for a Brazilian president in 11 years, as Rousseff twice canceled planned visits.
His one-day trip to Tokyo came as Temer is changing the course taken by Rousseff’s government and trying to shore up the economy by inviting more investment from abroad.
Earlier Wednesday, Temer also met with officials from Keidanren, otherwise known as the Japan Business Federation, a powerful Japanese business lobby, to seek investments.
Brazil’s once rapidly-growing economy took a hit amid slowing in other emerging economies, and it is forecast to contract for the second consecutive year amid falling commodity prices and consumer spending.
In a bid to rescue its ailing economy, Brazil’s center-right government last month rolled out a massive privatization plan by auctioning off licenses to operate oil, gas and electricity and infrastructure projects.
Temer also said he hopes to expand exports to Japan.
Brazil’s Agriculture Ministry on Tuesday said it is negotiating with Tokyo to increase exports of beef and fruit to Japan. Currently, Japan largely bans imports of fresh Brazilian beef.
Brazilian exports to Japan fell to almost ¥880 billion in 2015 from some ¥1 trillion the previous year.