Novos dados sobre Brasil

[Walter Morales]

BACKGROUND NOTES
BRAZIL
September 1994



OFFICIAL NAME: FEDERATIVE REPUBLIC OF BRAZIL

PROFILE

Geography

Area (1994): 8,511,965 sq. km. (3,290,000 sq. mi.). Cities
(1994): Capital--Brasilia (pop. 1.8 million). Other cities--
Sao Paulo (11 million), Rio de Janeiro (6 million), Belo
Horizonte (2.3 million), Salvador (2 million), Fortaleza (1.8
million), Recife (1.4 million), Porto Alegre (1.4 million),
Curitiba (1.4 million). Terrain: Dense forests in northern
regions, incl. Amazon Basin; semiarid along northeast coast;
mountains, hills, and rolling plains in the southwest (incl.
Mato Grosso); and coastal strip. Climate: Mostly tropical or
semitropical with temperate zone in the south.

People

Nationality: Noun and adjective--Brazilian(s). Population
(1994 est.): 155 million. Annual growth rate (1994): 2.1%.

Density: 17.6 per sq. km. (45.6 per sq mi.). Ethnic groups:
Portuguese, Italian, German, Japanese, African, Indians,
principally Tupi and Guarani linguistic stock. Religion: Roman
Catholic (80%). Education: Literacy--81% of adult population.

Health: Infant mortality rate--58/1,000. Life expectancy--66
yrs. Work force (1993, 64.5 million): Agriculture--35%.
Industry--25%. Services--40%. Trade union membership--about 6
million.

Government

Type: Federative Republic. Independence: September 7, 1822.

Constitution: Promulgated October 5, 1988. Branches: Executive-
-president (chief of state and head of government) popularly
elected to a single 5-year term. Legislative--Senate (81
members popularly elected to 8-year terms), Chamber of Deputies
(503 members popularly elected to 4-year terms). Judicial--
Supreme Federal Tribunal.

Political parties (with congressional representation):
Brazilian Democratic Movement Party (PMDB), National
Reconstruction Party (PRN), Liberal Front Party (PFL),
Democratic Social Party (PDS), Democratic Workers Party (PDT),
Workers Party (PT), Brazilian Labor Party (PTB), Liberal Party
(PL), Brazilian Socialist Party (PSB), Communist Party of
Brazil (PC do B), Progressive Renewal Party (PPR), Progressive
Party (PP), Popular Socialist Party (PPS). Suffrage:
Compulsory from 18-70. Subdivisions: 27 states, federal
district (Brasilia), PPR (Progressive Renewal Party), PP
(Progressive Party), PPS (Popular Socialist Party). Defense:
2.6% of 1990 government budget. Flag: A yellow diamond on a
green field; a blue globe with 23 white stars and a band with
"Ordem e Progresso" centered on the diamond. The globe
represents the sky and the vastness of the states and capital,
and green and yellow signify forest and mineral wealth.

Economy

GDP (1993): $456 billion. Annual real growth rate (1993): 5%.
Per capita GDP (1993): $2,998. Natural resources: Iron ore,
manganese, bauxite, nickel, uranium, gemstones, oil.
Agriculture (11% of GDP): Products--coffee, soybeans,
sugarcane, cocoa, rice, beef, corn, oranges, cotton, wheat.
Land--17% arable, cultivable, or pasture. Industry: Types--
steel, chemicals, petrochemicals, machinery, motor vehicles,
consumer durables, cement, lumber, shipbuilding. Trade (1993):
Exports--$38.7 billion. Major markets--US 21%, Argentina 9%,
Japan 6%, Netherlands 6%, FRG 5%, France 4%, Italy 4%.
Imports--$25.7 billion. Major suppliers--US 24%, Argentina 9%,
FRG 9%, Japan 8%, France 4%. Official exchange rate: "Real"
0.92 = US$1 (Aug. 1994; Rate stable). Foreign direct investment
and reinvestment in Brazil (registered with Central Bank as of
June 30, 1993): $41.9 billion. Sources--US $13.6 billion
(33%); FRG $6.1 billion (14%) Japan $4.0 billion (9%) U.K. $2.3
billion (5%), Canada $1.7 billion (4%), Switzerland $1.7
billion (4%).


PEOPLE

With an estimated population of nearly 155 million, Brazil is
the most populous country in Latin America and ranks sixth in
the world. Most of the people live in the south-central area,
which includes the industrial cities of Sao Paulo, Rio de
Janeiro, and Belo Horizonte. Urban growth has been rapid; by
1991 the urban sector represented 75.47 percent of the total
population. Increased urbanization has aided economic
development but, at the same time, has created serious social
and political problems in the major cities.

Four major groups make up the Brazilian population: the
Portuguese, who began colonizing in the 16th century;
indigenous Indians of Tupi and Guarani language stock; Africans
brought to Brazil as slaves; and various Europeans and Asian
immigrant groups that have settled in Brazil since the mid-19th
century. The Portuguese often intermarried with the Indians;
marriage with slaves was common. Although the basic ethnic
stock of Brazil was once Portuguese, subsequent waves of
immigration have contributed to a rich ethnic and cultural
heritage.

>From 1875 until 1960, about 5 million Europeans emigrated to
Brazil, settling mainly in the four southern states of Sao
Paulo, Parana, Santa Catarina, and Rio Grande do Sul. In order
of numbers, after the Portuguese, the immigrants have come from
Italy, Germany, Spain, Japan, Poland, and the Middle East. The
largest Japanese community outside Japan is in Sao Paulo.
Despite class distinctions, national identity is strong, and
racial friction is a relatively new phenomenon.

Indigenous full-blooded Indians, located mainly in the northern
and western border regions and in the upper Amazon Basin,
constitute less than 1 percent of the population. Their numbers
are declining as contact with the outside world and commercial
expansion into the interior increase. Brazilian government
programs to establish reserves and to provide other forms of
assistance have been in effect for years but are controversial
and oft-times less than efficacious.

Brazil is the only Portuguese-speaking nation in the Americas.
About 80 percent of the population belongs to the Roman
Catholic Church, although many Brazilians adhere to Protestant
sects and to spiritualism.

As its geography, population size, and ethnic diversity would
imply, Brazil's cultural profile and achievements are
extensive, vibrant, and constantly changing. Popular culture
predominates, with a thriving popular music industry,
relatively active cinema, and a highly developed television
empire, producing an enormous number of soap operas
("telenovelas") that have found a world market. The visual
arts, especially painting, are lively, while literature and the
theatre, although important, play a less prominent role in this
fast-moving, media-oriented society. Soccer is the national
sport, Brazil having won the World Cup in 1994; volleyball and
auto racing are also closely followed.

Traditionally, Brazilian culture has developed around regional
subjects with the country's northeast normally identified with
national themes, both nativist and Afro-Brazilian, while the
urban centers of Sao Paulo and Rio de Janeiro have demonstrated
a tendency toward a more international, and European-oriented
expression. With the spread of television pushing toward a more
integrated national culture, these tendencies have diminished
somewhat but remain central to understanding the uniqueness of
this vast nation.

HISTORY

Recent archeological discoveries suggest that Brazil may have
been inhabited as long as 40,000 years ago. Additional research
must be undertaken before these hypotheses, which may push the
history of Western Hemisphere human occupation back as many as
20,000 years, are universally accepted. In addition, there is
continuing speculation that Brazil may have been visited by
15th century Portuguese explorers who sailed widely in the
South Atlantic, trading with Africa and settling the Azores and
Madeira Islands.

Brazil was formally claimed in 1500 by the Portuguese navigator
Pedro Alvares Cabral. It was ruled from Lisbon as a colony
until 1808 when the Portuguese royal family, having fled from
Napoleon's army, established the seat of government in Rio de
Janeiro. Brazil became a kingdom under Dom Joao VI, who
returned to Portugal in 1821, leaving his son, the prince Dom
Pedro, as regent. The prince successfully declared Brazil's
independence on September 7, 1822, and became emperor with the
title of Dom Pedro I. His son, Dom Pedro II, ruled from 1831 to
1889, when a federal republic was established in a quick and
timely military coup by Army Marshal Deodoro da Fonseca.
Slavery had been abolished a year earlier by the acting Regent
Princess Isabel while Dom Pedro II was in Europe.

>From 1889 to 1930, the government was a constitutional
democracy, the presidency alternating between the dominant
states of Sao Paulo and Minas Gerais. This period ended with a
military coup that placed Getulio Vargas, a civilian, in the
presidency; Vargas remained as dictator until 1945. From 1945
to 1961, Eurico Dutra, Vargas, Juscelino Kubitschek, and Janio
Quadros were elected presidents. When Quadros resigned in 1961,
he was succeeded by Vice President Joao Goulart.

Goulart's years in office were marked by high inflation,
economic stagnation, and the increasing influence of radical
political elements. The armed forces, alarmed by these
developments, staged a coup on March 31, 1964. The coup leaders
chose as president Army Marshal Humberto Castello Branco,
followed by retired Army Marshal Arthur da Costa e Silva (1967-
69), Gen. Emilio Garrastazu Medici (1969-74), and Gen. Ernesto
Geisel (1974-79). Geisel began the political liberalization
process, known as "abertura" (or opening) which was carried
further by his successor, Gen. Jose Baptista de Oliveira
Figueiredo (1979-85). Figueiredo not only permitted the return
of politicians exiled or banned from political activity during
the 1960s and 1970s but also allowed them to run for state and
federal offices in 1982.

An electoral college, however, consisting of all members of
Congress and six delegates chosen from each state, continued to
choose the president. In January 1985, the electoral college
voted Tancredo Neves from the opposition Brazilian Democratic
Movement Party (PMDB) into office as President. However,
Tancredo Neves became ill in March and died a month later. His
vice president, former Senator Jose Sarney, became president
upon Neves' death.

Brazil completed its transition to a popularly elected
government in 1989, when Fernando Collor de Mello won 53
percent of the vote in the first direct presidential election
in 29 years. In 1992 a major corruption scheme was unveiled by
a Congressional committee and the press which led to the
resignation of President Collor de Mello hours before Congress
found him guilty in an impeachment trial. Consistent with the
Brazilian constitution, Vice President Itamar Franco took
office and will govern for the remainder of his term in office
culminating in the 1994 presidential elections.

GOVERNMENT

Brazil is a federative republic with broad powers granted to
the federal government. A Constituent Assembly drafted a new
constitution in late 1988. At the national level, the
constitution establishes a presidential system with three
branches--executive, legislative, and judicial.

The president is assisted by a vice president (elected with the
president), a presidentially appointed cabinet, and specialized
administrative and advisory bodies.

The bicameral National Congress consists of 81 Senators (three
for each state and the federal district) elected to 8-year
terms, and 503 Deputies elected at large in each state to 4-
year terms. The elections are based on proportional
representation weighted in favor of less populous states. The
next congressional elections are scheduled for October 1994.

The apex of the judicial system is the Supreme Federal
Tribunal. Its 11 Justices, including the Chief Justice, are
appointed by the president to serve until age 70.

Brazil is divided administratively into 27 states and a federal
district, Brasilia. The framework of state and local
governments closely parallels that of the federal government.
Governors are elected for 4-year terms. A federal revenue
sharing system is in place since the 1988 Constitution which
provides states with considerable resources.

The Federal District, which moved from Rio de Janeiro to
Brasilia in April 1960, is governed by a governor and a vice
governor, both of whom will be chosen in direct elections in
1994.

PRINCIPAL GOVERNMENT OFFICIALS

President Itamar FRANCO
Vice President Vacant
Foreign Affairs Celso AMORIM
Ambassador to the US Paulo Tarso FLECHA DE LIMA
Ambassador to the UN Ronaldo SARDENBERG
Ambassador to the OAS Luis Agosto de ARAUJO CASTRO

Brazil maintains an embassy in the United States at 3006
Massachusetts Avenue NW, Washington, DC 20008 (Tel. 202 745-
2700). Brazil maintains consulates general in New Orleans, New
York, Chicago, and Los Angeles, and consulates in Miami,
Houston, Dallas, San Francisco, and Atlanta.


POLITICAL CONDITIONS

Following the 1964 military coup, the 13 existing political
parties were abolished, and two political organizations, the
pro-government National Renewal Alliance (ARENA) and the
opposition Brazilian Democratic Movement (MDB), were formed. In
1979, under a government-sponsored bill approved by the
congress, the two-party system was abolished, and a multiparty
system was allowed to reemerge. In 1994, more than 20 political
parties participated in the campaign. The major parties are:

PMDB

Brazilian Democratic Movement Party (Partido do Movimento
Democratico Brasileiro). The country's largest party, the PMDB
is a loosely-knit coalition of politicians from across the
political spectrum. It elected federal deputies in all 27
states and the federal district in 1990.



PFL

Liberal Front Party (Partido da Frente Liberal). The PFL is the
country's second largest party and the largest on the center-
right. The PFL is strongest in small and medium-sized towns,
particularly in the impoverished northeast and Amazon regions.
The PFL was founded in 1985 by dissidents of the military-
created Democratic Social Party who opposed the presidential
bid of Paulo Maluf.

PSDB

Brazilian Social Democracy Party (Partido da Social Democracia
Brasileira). Formed in 1988 by dissidents of the PMDB, the PSDB
espouses a center-left social democratic agenda. PSDB leaders,
including Fernando Henrique Cardoso, support a free market
economy with greater government involvement in such social
areas as health care and education.

PT

Workers' Party (Partido dos Trabalhadores). Formed in 1979, the
PT is Brazil's "European-style" leftist party, with a clearly
defined ideology, strict party discipline, a hierarchical
structure, and an extensive grassroots organization. It is
strongest among intellectuals, organized labor, and the
economically disadvantaged. It draws considerable support from
the liberation- theology wing of the Catholic Church and from
the four-million member labor confederation, the Sole Workers
Central. The PT is headed by party founder Luis Inacio Lula da
Silva, a presidential candidate in 1989 and 1994.

PPR

Progressive Renewal Party (PPR). Formed in early 1993, the PPR
represents a merger between Paulo Maluf's former Democratic
Social Party and the Christian Democratic Party. The party is
based primarily in the more industrialized south and southeast
and includes many former supporters of Brazil's military
government. The PPR is a center-right party that generally
supports free market reforms.

PP

Progressive Party (PP). Founded in 1993, the PP is the result
of a merger between the Renovating Workers' Party and the
Social Workers' Party, two splinter center-right parties formed
in 1990 to support the gubernatorial campaigns of several local
politicians. The PP claims to support market-oriented policies
and is strong in a handful of states, such as Parana, and the
Federal District.

PDT

Democratic Workers Party (Partido Democratico Trabalhista). The
PDT is a populist party founded by Leonel Brizola in 1980. The
PDT is strongest in Rio de Janeiro and Rio Grande do Sul,
states where Brizola served as governor. Much of its support
come from urban and rural poor. PDT members usually stress a
greater role for the government is tackling Brazil's pressing
social problems.

PTB

Brazilian Labor Party (Partido Trabalhista Brasileiro). The
PTB, founded in 1945, is a populist party that no longer has a
major national leader or following. Its appeal is limited to
several western states, such as Mato Grosso do Sul and Roraima.

PL

Liberal Party (Partido Liberal). The PL is a center-right party
that is popular among small businessmen at the state and local
level in Sao Paulo and Rio de Janeiro. The party advocates a
minimum role for the state in economic affairs and is a staunch
proponent of a flat tax on businesses and individuals.

PRN

National Reconstruction Party (Partido da Reconstrucao
Nacional). Formed in 1988, the PRN was Collor's personal
vehicle for his 1989 presidential bid. Following Collor's
impeachment in late 1992, PRN membership in Congress dropped
considerably.

PPS

Popular Socialist Party (Partido Popular Socialista
Brasileiro). The PPS is the former Brazilian Communist Party,
renamed in 1992 in the wake of the collapse of the Soviet
Union. The PPS espouses Marxist doctrine but frequently
cooperates with other center-left parties.

PC do B

Communist Party of Brazil (Partido Comunista Brasileiro). The
PC do B has avoided modifying its Soviet-style
platform since the end of the Cold War. It has
participated, though minimally, in the 1989 and 1994 electoral
coalitions formed to support the PT presidential candidate.

PSB

Brazilian Socialist Party (Partido Socialista Brasileiro).
Founded in 1946, the PSB, a leftist party with one senator and
11 deputies, also supported Lula in 1989 and 1994 and is
expected to elect Miguel Arraes governor of Pernambuco again in
1994.

Brazil also has several dozen small parties, some of which
(e.g. National Mobilization Party--PMN, and the Social
Christian Party--PSC) command a following in a handful of
states.


ECONOMY

Brazil is a country rich in resources and natural advantages.
To date, however, its economic performance has lagged behind
its potential. Economically, it is a country of contrasts
ranging from sophisticated economic centers around Sao Paulo to
relatively undeveloped trading outposts in the Northern region.
Industrial development has been concentrated in the
southeastern states of Rio de Janeiro, Sao Paulo, Parana, and
Rio Grande do Sul but is now expanding to include the northeast
and center west.

In 1993, Brazil's gross domestic product (GDP) totaled USD 456
billion, with an estimated per capita GDP of USD 2,998. During
the 1950s, GDP rose at an annual rate of more than 6 percent.
It slowed from 1963 to 1965 but averaged above 11 percent
annually during the 1968-1973 "economic miracle." Growth slowed
between 1974-80 and from 1981 to 1983 was either negative or
nominal. In 1984, the economy began to improve again, and
during 1985-1986, GDP grew more than 8 percent per year. After
slowing in 1987, growth dropped in 1988 to a negative -0.1
percent but climbed again in 1989 to 3.3 percent. By 1991
growth slid to 1.1 percent and in 1992 to -0.9 percent. In
1993 economic growth surged to 5.0 percent; official figures
estimate that growth for 1994 will reach 3.0 percent.


AGRICULTURE, INDUSTRY, AND NATURAL RESOURCES

About one-half of Brazil is covered by forests. The largest
rainforest in the world is located in the Amazon Basin and is
so impressive in character and extent that the entire Amazon
region is identified with it. Recent migrations into the Amazon
and controversial large-scale burning of forests areas placed
the international spotlight on Brazil. The government has since
reduced incentives for such activity and has begun to implement
an ambitious environmental plan.

Eastern Brazil has tropical and semideciduous forests and soil
of limited agricultural value; the nutrients in the small
amount of humus usually are exhausted after only a few years of
farming. The softwood forests of the southern highlands still
provide a substantial portion of the construction timber used
in Brazil. However, fears that these forests are being cut down
so fast that they are in danger of extinction within the next
few decades have led the industry to move north. Major timber
supplies for domestic and export markets now come from the
tropical hardwoods of the Amazon. The thorn forests of the
northeast interior contain dry, cactus-infested, drought-
resistant vegetation, its sparseness due as much to overgrazing
and overcultivation as to the unreliability of rainfall.

In Central Brazil, the states of Mato Grosso, Mato Grosso do
Sul, Goias, and parts of Minas Gerais and Sao Paulo contain
substantial areas of grassland, with only scattered trees.
Unlike the plains of North America, the Brazilian grasslands
are less fertile, and large areas of these grasslands are best
suited to pastures.

The agricultural sector employs 35 percent of Brazil's
population and accounts for about 11 percent of its GDP and
almost 40 percent of the country's exports. Except for wheat,
Brazil is largely self-sufficient in food. It is the world's
leading exporter of coffee, orange juice concentrate and
tobacco; and the second largest exporter of sugar and soybeans.
During the past decade, in an effort to expand its agricultural
exports, Brazil began opening new regions to cultivation. The
most important of these are devoted to soybean production in
Mato Grosso and Bahia, and, more recently, Minas Gerais and
Goias. Brazil also has expanded cultivation of sugarcane, the
raw material used to produce ethyl alcohol fuel that powers 40
percent of the nation's cars.

Brazil's power, transportation, and communications systems
generally have kept pace with development, but, in recent
years, facilities in some areas have not met demand due to lack
of investment and maintenance funds. The country has a large
and increasingly sophisticated industrial base, producing basic
industrial products such as steel, chemicals, and
petrochemicals and finished consumer goods and aircraft. A
computer industry is also emerging. Within the past decade,
industry has been the greatest contributor to economic growth.
Today, it accounts for nearly 36 percent of GDP and 75 percent
of exports.

Brazil is one of the world's leading producers of hydroelectric
power, with a potential of 106,500 megawatts. Existing
hydroelectric plants provide 90 percent of the nation's
electricity. Two large hydroelectrical projects, the 12,600-
megawatt Itaipu Dam on the Parana River--the world's largest
dam--and the Tucurui Dam in Para in northern Brazil are in
operation.

Proven mineral resources are extensive. Large iron and
manganese reserves provide important sources of industrial raw
materials and export earnings. Deposits of nickel, tin,
chromite, bauxite, beryllium, copper, lead, tungsten, zinc, and
gold, as well as lesser known minerals, are exploited. Oil
exploration is less urgent now than it was in the early 1980s,
because of Brazil's reduced dependence on imported oil from the
Middle East and because of lower world prices. High quality
coal, especially of the coking grade required in the steel
industry, is in short supply.

Brazil's first commercial nuclear reactor, Angra I, located
near Rio de Janeiro, began operating in early 1982. Site
preparations began the same year for the Angra II and III. With
a combined capacity of 1,245 megawatts, these are the first of
eight nuclear plants envisioned under the 1975 nuclear accord
between Germany and Brazil. However, continued troubles with
Angra I and scarce funds have slowed construction of nuclear
plants, limiting expansion for the foreseeable future to the
two reactors already under construction. Brazil also is engaged
in research to master the nuclear fuel cycle.

The Brazilian government has undertaken an ambitious program to
reduce dependence on imported oil. Imports previously accounted
for more than 70 percent of the country's oil needs but now
account for less than 50 percent. In addition to developing
hydroelectric, nuclear, and coal resources, Brazil has become a
world leader in the development of alcohol fuel derived from
sugarcane. Brazilian automotive gasoline is a mixture
containing up to 22 percent ethyl alcohol. Its auto
manufacturers began large-scale production of 100 percent
alcohol-powered cars in 1979, and today more than three million
are on the road. Alcohol production has not always kept pace,
however, leading to alcohol shortages in 1989-90. Alcohol
subsidies were reduced in the early 1990s, and car makers have
begun to increase production of gasoline-powered automobiles.

ECONOMIC STRATEGY

Following the 1964 coup, the Brazilian government focused on
two major economic goals, high growth rates and control of
inflation. Sustained economic growth continued into the 1970s.

By the late 1970s, escalating oil prices, governmental
indebtedness, and high interest rates brought the Brazilian
economy to a virtual standstill. Throughout the 1980s, these
problems were attacked through a number of programs emphasizing
reduced government expenditures and subsidies and income tax
increases. Nevertheless, budget deficits have persisted. The
combined public sector deficit in 1993 was at least two percent
of GDP.

In 1985, the Sarney administration brought inflation to a halt
by freezing all prices and ending indexation of wages and other
facets of the economy. Real wage increases led a consumer
spending boom which created shortages and tight profit margins.
This plan collapsed in November 1986, and inflation soared to
an annualized rate of 580% in December 1986. Inflation
remained out of control through the 1980's. It peaked with a
hyperinflationary period of 6800% on an annualized basis in
1989.

In addition, high levels of imports so reduced foreign exchange
reserves that interest payments on foreign loans were suspended
in February 1987. Foreign indebtedness rose to USD 112 billion
(about USD 18 billion is held by U.S. commercial banks), the
largest of any developing country. In the late 1980s, debt
service claimed most of Brazil's balance of payments, and
periodically the federal government suspended some forms of
debt service, including a de facto moratorium on payments to
commercial banks in September 1989. In April 1994, after
several years of intense negotiations, Brazil reached a
settlement with its commercial bank creditors. Its debt to
official (Paris Club) creditors had been resolved earlier, but
some arrearages remain.

In the Spring of 1990, President Fernando Collor introduced
measures to stabilize and liberalize the economy. The initial
phase of the program, which focused on drastically reducing
liquidity and cutting inflation, appeared to achieve its
objectives. Inflation slowed nearly to zero within the first
month, rising gradually to about 10 percent monthly by August.
Collor put into place the administrative machinery to implement
an ambitious privatization program and opened Brazil's markets
to foreign goods.

On July 1, 1994 Brazil introduced its fifth currency in seven
years -- the "Real." The new currency was introduced as part
of an economic stabilization plan designed to curb once-again
rampant inflation, which reached an annual level of nearly
5,000 percent at the end of 1993. Other facets of the plan
include balancing the budget, privatization of state-run
industries and strict monetary controls. It is believed by
many economists, however, that long-term stabilization will
require further structural reforms as well as revision of the
Constitution.

Foreign direct investment represents a relatively small but
important part of Brazil's capital base. The share of foreign
direct investment and reinvestment registered with the Central
Bank's Investments Office totaled USD 8.7 billion, largely in
manufacturing and finance. The Constitution restricts the entry
of new foreign investors in the financial services area,
although U.S. and other foreign institutions established before
the prohibition continue to have a prominent role. The
Constitution also contains provisions that restrict investment
in petroleum and minerals exploration, health care, chemicals,
biotechnology, and new materials.

TRADE AND INVESTMENT

Brazil's industrial development strategy through the 1980s was
based on a policy that combined import substitution, foreign
investment, and government participation in and regulation of
the economy. This policy contributed to significant growth and,
in the late 1980s, to large trade surpluses. The country
recorded a USD 19 billion surplus in 1988 and USD 16 billion in
1989--a remarkable turnaround from the deficits experienced at
the beginning of the decade. Surpluses for 1992 and 1993 were
USD 15 billion and USD 13 billion respectively.

FOREIGN RELATIONS

Traditionally, Brazil has been a leader in the inter-American
community and has played an important role in collective
security efforts as well as in economic cooperation in the
Western Hemisphere. Brazil aligned with the allies in both
World Wars and, during World War II, its expeditionary force in
Italy played a key role in the allied victory at Monte
Castello. It is a party to the Inter-American Treaty of
Reciprocal Assistance (Rio Treaty) and the Organization of
American States (OAS). In recent years, Brazil has given high
priority to expanding relations with its South American
neighbors and is a founding member of the Amazon Pact and the
Latin American Integration Association (ALADI), the successor
to the Latin American Free Trade Association (LAFTA) and
Mercosul uniting Argentina, Uruguay, and Paraguay.

Brazil is a charter member of the United Nations and
participates in many of its specialized agencies. It holds a
two year Security Council seat through the end of 1994. It has
contributed troops to UN peacekeeping efforts in the Middle
East, the former Belgian Congo, Cyprus, Mozambique and Angola.

As Brazil's domestic economy has grown and diversified, the
country has become increasingly involved in international
politics and economics. The United States, Western Europe, and
Japan are primary markets for Brazilian exports and sources of
foreign lending and investment. Brazil's dependence on imported
petroleum has resulted in more intensive political and economic
ties with Middle Eastern countries. In the 1970s, Brazil
expanded its relations with black African countries. In 1986,
it introduced a proposal at the UN General Assembly to
establish a Zone of Peace and Cooperation in the South
Atlantic. As an indication of Brazil's broader international
role, trade with other developing countries increased from 9
percent of the total in the 1970s to nearly 30 percent in 1993.

In the past year, Brazil has also bolstered its commitment to
nuclear non-proliferation through the signing of a full scale
nuclear safeguard agreement with the International Atomic
Energy Agency (IAEA) and through ratification of the Treaty of
Tlatelolco.

The Brazilian Government has diplomatic relations with the
USSR, China, all of the Eastern and Central European countries,
and Cuba, but not with Cambodia or North Korea.


U.S. - BRAZILIAN RELATIONS

The United States was the first country to recognize Brazil's
independence in 1822. Brazil's 19th-century leader, Emperor Dom
Pedro II, admired Abraham Lincoln and visited the United States
during the 1876 cenntenial. President Roosevelt and Truman made
earlier visits; President Carter visited in 1978, President
Reagan in 1982, and President Bush in 1990. President Sarney
visited the United States in 1986, and President Collor came to
Washington in 1991.

In the 1950s and 1960s, Brazil received about USD 2.4 billion
in U.S. economic assistance--USD 1.4 billion under the auspices
of the U.S. Agency for International Development (AID) and the
remainder under PL 480 (Food for Peace) and Peace Corps
programs. After 1972, U.S. programs stressed training Brazilian
in technology and physical and social sciences (in the United
States), especially at the graduate level. Some 14,000 persons
were trained by AID during this period, 22,000 from all U.S.
Government sources. In view of Brazil's impressive economic
development and its increased ability to obtain loans and
technical assistance from private and multilateral sources,
U.S. assistance programs were phased out in the 1970s, major
AID activities in Brazil ended in 1979, and the Peace Corps
program was ended in 1980. Currently, AID maintains a small
advanced developing country program that emphasizes cooperation
on environment, health and family planning and responds to
endemic disease, emergencies, and natural disasters.

The United States is Brazil's most important commercial partner
and largest investor. The U.S. share of Brazilian trade
averages 23 percent, and two-way trade amounted to USD 13.3
billion in 1993. Brazil's lack of intellectual property
protection (especially patents in certain areas) led to
frictions with the United States and other major trading
partners. These came to a head when the United States named
Brazil in formal trade actions on two occasions under U.S.
trade law. The U.S. objective was to stimulate negotiations as
well as appropriate action by the Government of Brazil to
protect intellectual property rights. For its part, Brazil is
critical of the United States for high U.S. tariffs on products
of interest to Brazil such as steel and orange juice. Recent
efforts by both sides have begun to reduce the tensions arising
from these issues.

Bilateral agreements between Brazil and the United States
include a treaty of peace and friendship; an extradition
treaty; a joint participation agreement on communication
satellites; and, scientific cooperation, civil aviation, and
maritime agreements. Brazil and the United States exchange
professors under Fulbright and other academic programs and
carry out university cooperation projects.


PRINCIPAL U.S. OFFICIALS

Ambassador Melvyn Levitsky
Deputy Chief of Mission Mark Lore
Defense Attache Col Layton Dunbar, US Army
Economic Counselor Paul Wackerbarth
Commercial Counselor Richard Ades
Political Counselor Theodore Wilkinson
Science Counselor Roy Simpkins
Public Affairs Counselor (USIS) Carl Howard
Consul General in Rio de Janeiro David Zweifel
Consul General in Sao Paulo Philip Taylor

The U.S. Embassy in Brazil is located at Avenida das Nacoes
Sul, Quadra 801, Lote 3, Brasilia, DF, CEP 70403-900 (Tel. 061
321-7272, Telex 061-1091). U.S. Consulates General are in Rio
de Janeiro and Sao Paulo. Consulates are at Porto Alegre and
Recife. Consular agents are in Manaus, Sao Luis, Belem, and
Salvador da Bahia. Branch offices of the U.S. Information
Service (USIS) are located in Brasilia, Rio de Janeiro, Sao
Paulo and Recife. Branch offices of the U.S. Foreign
Commercial Service are located in Brasilia, Sao Paulo, Rio de
Janeiro, Belo Horizonte and Belem.
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' ' ' . FALL IS HERE, and rain keeps falling in Portland, OREGON
'_'__.____ ' ' . . "PORTLAND 24 HOUR RAINFALL TOTAL OF 4.24 SET AN
'/ / | \ \ ' ' . ALL TIME RECORD SINCE 1940."
~~~~~|~~~~~ ' .REST OF THE NIGHT...SCATTERED SHOWERS. LOW IN THE
' | ' MID 40S..SLIGHT CHANCE OF A THUNDERSTORM.
| /~~~ ' MO,TU,WE,TH,FR,SA,SU MORE OF THE SAME ....
L. {@ @ ' ' ' So, that means that I will be inside most of the
\\ \ > ' ' week and you can reach me at wal...@psg.com or
\\_|~ ' wal...@pccvm.bitnet