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currency crisis

The impact on science

FAPESP will allow the importation of supplies, in exceptional cases, to avoid irreplaceable loses to ongoing projects

On the Tuesday afternoon of the 1st of October, FAPESP’s president, Carlos Vogt, met with twenty four researchers, all of them directors of research institutes in the state of São Paulo linked to the areas of biology, biochemistry and biomedical sciences, at the headquarters of the Butantan Institute. Among them were Erney Camargo from Butantan itself, Walter Colli from the Chemistry Institute of the University of São Paulo (USP), and Henrique Krieger from the Institute of Biomedical Sciences, also of USP.

The subject of discussion was the dramatic effects of the economic crisis in the country, particularly the exchange crisis, on the development of scientific research in São Paulo. And lingering on the room was a certain fear that the until that moment well defended São Paulo system in science and technology, solid and stable like no other in the country, was under the threat of irreparable damage to the continuity of its development.

Let it be explained: on the 7th of August last, due to the heavy loses in the value of the Real in relation to the US dollar, the Foundation made the decision to suspend, in an emergency and temporary measure, the release of resources destined towards services and goods importation for ongoing research projects and the granting of resources to new projects. In fact, in a system in which the degree of dependency on imports is such that no less than one third of the budget of its financing agency, namely FAPESP, is done in dollars – through the purchase contracts of equipment and inputs, besides the payment (less significant) of grants abroad -, one can only imagine the gloomy mood that the announcement of this measure created throughout the scientific community. And this in spite of the emphasis on its temporary character.

But on the 1st of October the stack of bad news was not to be extended. What was being raised as a priority discussion were forms of minimizing or turning around the losses that occurred due to importation halt. And Vogt was able to explain that a step in this direction had just been taken with the Foundation’s new decision on emergency imports. In the text of the announcement, it was stated that “with the finality of attending to extreme situations, to which this measure (the suspension of imports) would bring about irreparable damages to the development of ongoing projects, FAPESP may authorize, in an exceptional character and limited to budgetary availability, the importing of supplies and spare parts to the minimum essential quantity”.

This was something significant, faced with the reality that the rate of the US dollar against the Real increased some 67.5% during 2002, up until the beginning of October (according to the newspaper Folha de S. Paulo, 10th of October edition. Indeed, only during the first week of the month, the rate increased some 7%). The meeting at the Butantan Institute was not the first nor will it be the last between FAPESP’s management and the worried representatives of the scientific community to deal with the imports issue.

It was preceded by a meeting on the evening of the 27th of September at the Foundation’s headquarters, between the president, the scientific director, José Fernando Perez, and the pro-rectors of research of four of the five public universities in the state of São Paulo – Luís Nunes de Oliveira from USP, Fernando Ferreira Costa from the State University of Campinas (Unicamp), Marcos Macari from the São Paulo State University (Unesp), Nestor Schor from the Federal University of São Paulo (Unifesp) – and the vice-rector of the Federal University of São Carlos (UFSCar), Romeu Cardozo Rocha Filho. As a matter of fact, it was at this first meeting that they adjusted the terms of the measure for the emergency importing of supplies, which is detailed out on FAPESP’s site (

Other meetings followed: on the 3rd of October the scientific director Perez with the members of the Post-Graduation Board and the Research Board of USP; on the 10th, with the Congregation of the Institute of Biomedical Sciences of USP; on the 11th with the Research Commission of Unifesp; on the 24th of October with the Unicamp professors who have projects financed through FAPESP. Furthermore, on the 7th of November Vogt spoke at the Technology Research Institute of the State of São Paulo (IPT) and, on the 13th of the month, in Ribeirão Preto, to professors of the faculties of Medicine and of Philosophy, Sciences and Letters of USP.

The result of these meetings, although some scattered demonstration of discontent and criticism towards FAPESP’s handling of the situation still persist in the scientific community, is a certain relief and, above all, the birth of a new attitude of the recognition for the need to confront, in a unified and organized manner, the problems that at this moment are strongly affecting the São Paulo research system as a whole. “The question of the emergency importing of supplies was well resolved and everybody became much calmer”, explains Luís Nunes, just as an example.

He says that he went to the first meeting “with a well defined idea that there was a sub-group of the community that was being threatened with heavy losses”. This was made up of the researchers who depended on perishable goods, such as radioactive material, of which large stocks could not be purchased and that had to be purchased on a monthly basis; for other researchers with seasonal projects, which simply would not progress unless the supplies were available on the defined forecast date, for example, those who need to carry out tests of a vaccine with a large number of previously invited people. “These situations have been resolved”, he emphasizes.

Even those who saw the currency crisis as “one among various factors that have contributed to the assets losses of the Foundation”, as in the case of Erney Camargo, guarantees that “everyone understood that the exchange variation imposed a shrinkage on expenditure and nobody questioned the restrictive measures. What remains is the concern that the restrictions will not be applied uniformly. We understand that privileged groups can not exist”. Camargo underlines that, if the exchange difficulties are a reality, “we have to adapt ourselves to this. The process of adaptation implied making priorities, and FAPESP acted correctly by leaving it up to the researchers to define the priorities for importing”.

Certainly, according to Nunes, some special cases for the equipment importing will pop up, which are not covered by the measure of emergency imports and they will get an examination case by case on the part of FAPESP. “I have already received a letter from a researcher whose project has urgency in importing equipment, as without it she will have to stop. This is going to have to be examined, and similar cases are going to multiply if this currency situation continues for some time”, he adds.

Solidary solutions
Apparently there is a vision spread among the São Paulo scientific community that it is facing a problem created outside of the research system. Nevertheless, it must be confronted by this community and by the different institutions that make up the research system in the state of São Paulo, on continuous battle that calls for short term solutions, and others of medium and long term.

In fact, the currency crisis that at this moment is spreading its perverse effects over the country’s research system unveils, on one hand, the problem of extreme dependency on goods and services produced outside of the country from which national scientific development suffers. And on the other hand, specifically in the case of São Paulo, the non-preoccupied attitude, reigning up until now, towards the degree of effective use of imported equipment, given a financial situation that had been comfortable for several years for research in the state.

The dependency on the abroad is today a worrying factor, FAPESP’s president underlined in an article published in the newspaper Folha de S. Paulo on the 17th of October, under the title Science, Technology and Innovation: Brazil’s Urgent Needs. In it, Vogt observed that “the country practically does not have an infrastructure for the production of the supplies necessary for the development of research, they being, for the major part, imported through contracts made in US dollars”.

Afterwards he emphasized that FAPESP’s budget in Real terms had oscillated over the last seven years between R$ 350 million and R$ 400 million, and, in dollar terms, had been reduced during 2002 by half, if compared to that of 1996. “A situation that is worsened by the currency crises, such as the one which we are passing through, which from time to time rages through the country”. Hence, considering that in this case, what is true for FAPESP in São Paulo is true for the research financing system of the country as a whole, he concluded with the words “the urgency is to invest in the nationalization of products, whether they be service goods or capital goods for science and technology and thus to contribute vigorously so that, on the one hand, it removes a bottleneck from the system, and on the other, dramatically reduces its costs”.

It was in the same direction line that Marcos Macari took, who, in parallel with his post at Unesp, is also on FAPESP’s Board. First he clarified his own position in relation to the question of the import suspension by the Foundation. “In my reading of the situation, the scientific community has to support the agency, because the suspension occurs due to a concern with the preservation of the institute’s assets”, he said. In relation to the series of meetings that FAPESP has been promoting concerning this issue, Dr. Macari thinks that the scientific community really needs to be informed about the processes of decision that go on in development agencies. Without the information, he argues that “the community feels it has the right to see things in the way it feels fit”.

However, when casting a wider eye over the problem, what he observes that “our scientific advance is dependent on the advanced technology of the developed countries over which we have no control”. For the pro-rector, “unfortunately, we do not have in our country an industrial park manufacturing research equipment and we have only just begun an incipient process of manufacturing reagents”. He is convinced that the problem has to be dealt with politically, because it is vital that companies that produce equipment and supplies materials install themselves in the country, in order to reduce the vulnerability of Brazilian research.

Macari understands that, anyhow, this is an objective that demands time and defends the idea that in the medium term, policies for maximizing the use of the equipment centers in existence be adopted. “FAPESP could adopt a policy along these lines. There is no point in having equipment of  US$ 30,000 or US$ 40,000 in one room and the same thing in another. It is clear that there has to be specifications, standardization, but the same piece of equipment can be, in many cases, shared by two or three research groups, something that is current practice in countries such as Britain, from which I’ve just returned. “He believes that in a time of crisis it is better for one to learn from the situation than to pass acid criticism and sentences: “We have to preserve our Foundation”.

The idea of the sharing of equipment is also defended by the pro-rector of research at Unicamp. “I think that the mechanism of importing has to be re-structured. And sharing equipment has to be given incentive as a necessary practice”, sums up Fernando Ferreira Costa. It is a natural tendency for the researcher, he adds, to want to have total control over the research equipment. “But if there is a piece of equipment with a certain degree of shortage of use, why buy another? If a piece of equipment of a previous generation works well, should the latest generation be bought?” It is clear that if a piece of equipment loses its utility, he argues, another is necessary.

“Common sense has to rule these decisions and this is not always the case”, he emphasizes. Still in the field of the importing scheme, Costa includes, as an alternative to be studied, the purchasing of large lots, resulting in cost reduction. Among the ideas raised to face this moment of crisis, Luís Nunes also highlights as interesting the one opposed by Nestor Schor from Unifesp, which is the setting up of a data bank of imported products to be made available in the São Paulo research system. “This way, if a researcher has excess of a product a colleague is short of, the former may supply what is needed to the latter.”

Brazil-São Paulo understanding
The subtle message that seems to be behind Macari’s words, especially when defending the equipment sharing, is that the São Paulo scientific community has to understand that it does not find itself so strong and safe from what is happening in science and technology throughout the country, to the extent that it cannot even admit a revision of the generous criteria with which traditionally FAPESP was able to attend to the demand for research resources. Indeed, this is practically the same thing that is said Dr. Costa, in clearer words: “Over the last ten years FAPESP has been an agency that satisfied all of the needs of the scientific community of São Paulo. If the current situation, such as that of the imbalance in the exchange rate, creates a different scenario, with difficulties that previously didn’t exist, the community and FAPESP need to confront it as the partners that they are. And believe that the community will understand this and react in this manner”.

The first sign that the São Paulo scientific community received that it is not outside that which is happening to the national system of science and technology was the increase in FAPESP’s conditions for grants concession, begun last year, which will result in some reduction in the number of concessions forked out by the Foundation. The reaction was of a certain irritation by the community, but little by little the majority of the researchers began to understand what was taking place. “The professors have a clear notion of the fact that a reduction had been occurring in the concession of grants for São Paulo, on the part of federal agencies, which has ended up affecting all of the system”, comments Costa.

In fact, the portion from the National Council for Scientific Development (CNPq) for grants and scholarships in São Paulo has been dropping for years (in grants from 39.2% of the agency’s concessions in 1995 to 29.9% during 2000, in accordance with the CNPq’s Statistical Report, swimming against the current of demand. For example, there was not a collapse in the grant system in the State because FAPESP was able to, year after year until 2000, to go on filling the progressive gap left by the federal void. According to the annual reports of the Foundation, and taking as a year base that of 1994, when 1,282 new grants were conceded by the Foundation, the expansion of the number of new concessions reached some 306.5%, during the year 2000.

With this, the percentage of 30% for grants within FAPESP’s annual budget, which historically the institution considered to be the maximum to maintain equilibrium in the system, based on a balance between research assistance and scholarships, was heavily overtaken. Consequently, measures were needed to reestablish this balance. So during 2001, considering the total of scholarships conceded in relation to the same year base (1994), an expansion of 214.3% was reached. In the case of the research assistance, also taking as the year base 1994, when 2,172 scholarships were conceded by FAPESP in their various modalities, the expansion was of 65.9% in 2000, with the concession of 3,604 new scholarships, and of 42.8% in 2001 with some 3,102 new concessions.

The notion that we need to re-think the São Paulo system jointly with the national system of science and technology is, without a doubt, clear in the article already cited by Vogt, who along the presidency of FAPESP, has a vice-presidency of the Brazilian Society for Progress in Science (SBPC), the entity representative of the national scientific community.

Here he lists, among the urgencies in science, technology and innovation in the country, the implementation of a law to guarantee the continuity of the federal resources for this area, the autonomy of the financial management of CNPq, of the Coordination of the Training of Personnel at Upper Level (Capes) and of the public system of tertiary level education in the country, and also the need to guarantee the autonomous functioning of the research support foundations, the FAPs, where they exist, and the creation of these agencies in the states that that they don’t exist.

At the end of all of this is what is being proposed is investment in the nationalization of the production of goods for science and technology, among other measures to guarantee a model consistent with the scientific and technological development of the country. The case of FAPESP, he said at the certain point “is illustrative of the urgent need to reorganize the system of the financing of research in Brazil”.