Brazil

Large factions of Brazilian society are deeply religious and some believe that this is a blessed land. Brazil's most recognizable figure - Pele aside - is Rio de Janeiro's magnificent statue of Christ. The Cristo Redentor appears to bless its admirers with outstretched hands.

Some inhabitants are unmoved by such symbolism. Reginaldo, a characteristically reckless Rio taxi driver, paints a very different picture of his countrymen and their icon, "The statue is not extending its arms in a blessing," he said. "Christ is just waiting for the Brazilians to do some work so he can applaud."

A closer look at the events of this last decade, and for Reginaldo's sake, the road ahead, suggests that applause is long overdue. In recent years, Brazil has implemented many far-reaching policies. If these go according to plan, the country should prosper in years to come.

In 1992, for example, the country opened its markets and lifted many barriers to imports. This had the desired effect of freeing consumers and businesses alike as they gained access to foreign goods and components. The influx of foreign investment, much of it in formerly closed sectors of the economy, was impressive.

Similarly, the government opened Brazilian borders to other Latin American countries in an attempt to create a regional free trade zone. Sadly, this has seen only limited success since Brazil's biggest neighbor, Argentina, has fallen into an economic quagmire.

All the same, the foundations have been laid for the future: the Mercosur trade zone consumer market currently stands at more than 232 million and this new trade zone surely holds great potential for Brazilian businesses.

President Cardoso's neo-liberal government has also made great strides towards ridding the country of its corrupt institutions. Reforms initiated in 1995 aimed at making state bodies more transparent have been instrumental in restoring some of the population's confidence in its lawmakers.

State employees are now more accountable than ever for their actions. Tough fiscal responsibility laws even ensure that money embezzled by corrupt government offices is reimbursed by the offending office.

These laws apply to all in equal terms. From Sao Paolo's Town Hall to offices deep in the Amazon, everyone is accountable. Some, needless to say, have had to tighten their belts.

So why is the country still struggling? The answers lie within a foreign debt problem that refuses to go away and a currency that remains too sensitive to external events.

"Brazil's dependence on external factors is a handicap in the short-term," said Japanese Ambassador Katsunari Suzuki. "The level of dependence is much higher here than in other countries because of the external debt. As a result, the country tends to be affected heavily by day-to-day developments in the external world.
Katsunari Suzuki, Japan's ambassador to Brazil.

"The events of September 11th last year, for instance, hit the country quite hard," he continued. "Circumstances beyond Brazil's influence inevitably affect short-term performances."

Suzuki is not alone in his view that Brazil's difficulties could be short-lived. Many in the business world feel that the country's natural riches will eventually ensure long-term prosperity. Some also voice their surprise at the financial markets' relentlessly negative attitude toward Brazil's currency, the real. They accuse money market speculators of holding an unfair bias against the Brazilian currency.

"Medium- and long-term prospects for Brazil have always been very bright. A short time ago, the country was being hailed as a potential major power for the 21st century," he said.

Suzuki feels that Brazil is misunderstood by the financial community, "We are now two years into the 21st century and Brazil is experiencing problems. As a result of this, people tend to look at this country with unnecessary pessimism," he said. "But a close inspection of Brazil's economic performance throughout the 20th century shows that the rate of growth in every decade bar the 1990s was, in fact, quite impressive."

Suzuki is keen to see an increase in trade between Brazil and Japan. The Japanese have been immigrating to Brazil for close to a century and business relations have been through many more ups than downs. Continued Japanese investment is proof that there is still considerable money to be made.

Not surprisingly, Suzuki sees further success in the future, through capitalizing on Brazil's natural resources. "At the latest stage of our bilateral relations, the oil sector is growing, particularly through partnerships with Petrobras," he said. "The company needs foreign investment to continue to be successful, and Japan is a major source of financing in the fields of offshore oil exploration and exploitation.

"Last year, The Japan Bank for International Cooperation prepared a package of about US$5 billion in financial support for Petrobras. I am convinced that this sector will be at the forefront of our bilateral relations for some time," he said.

But oil is not the only Japan-related field to show promise. In the development of iron ore mines, in the steel sector, and in paper and pulp production, Japan has been developing strong bilateral ties with Brazil since the 1960s. There is plainly much more to come.

From a Brazilian point of view, it's easy to envisage that these and other sectors could be strengthened to benefit the country on its domestic and export markets. With a population of around 170 million people, rich mineral resources and a highly educated top echelon of workers, very little could stop Brazil from succeeding.

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