Brazil's Vital Economy Spurs Upswing In U.S. Business

<B> Brazil's Vital Economy Spurs Upswing In U.S. Business</B>

By Frank Rosci

The largest country in South America and consistently among the continent's principal economic powerhouses, Brazil has demonstrated recent signs of exceptionally strong growth propelled by a significant infusion of development capital, much of it from U.S. companies.

"In matters of business and business practices, Brazilian executives view the United States, which is by far Brazil's main business partner, as a model of how to organize and run the country's private sector," said StelaMaris Dallari, press/tourism/investment officer for the Brazilian Consulate of New York.

In 1998 alone, Brazil received $26.1 billion in U.S. dollars in direct foreign investment, of which $6.1 billion or 23.4 percent was related to the country's ongoing privatization process, the largest in modern history, said Dallari. By the end of this year, $23 billion in U.S. dollars is expected to flow to Brazil. "The lowering of trade barriers, the sheer size and potential of Brazil's consumer markets; a rate of inflation that has been kept largely in check, allowing long-term planning; and legislative measures that eliminated the limiting distinctions, including tax/cost structures, between domestic and foreign corporations have all made investment in Brazil more attractive to U.S. and other companies," Dallari said.

At present, there are more than 2,000 U.S. companies doing business in Brazil, said a trade and economics specialist at the Brazilian Embassy, Washington, D.C.

One sector that is expanding dramatically is the hotel industry, with Inter-Continental Hotels committed to building two business-oriented properties and Sol Melia Hotels is involved in constructing about 40 hotels throughout the country. Another hotel industry giant, Hyatt, plans to open its first-ever hotel in Central and South America in Sao Paulo, Brazil's main business center, in 2003.

The 470-room Grand Hyatt will be a full-service business travel and meetings property. It will feature a business center, and guest rooms equipped with dedicated lines for phone and fax, as well as speakerphones and voicemail.

Flying from the United States to Brazil aboard Varig Brazilian Airlines, the country's largest carrier, also has improved for business travelers and the airline is planning to continue easing the process. In the coming months, an airline spokesman said, Varig will move into a new terminal at Rio de Janeiro International Airport, along with other airlines of the Star Alliance, including United and Lufthansa. Named the Tom Jobim Terminal, Terminal 2 will serve international and domestic flights, thus facilitating connections for business travelers. "Finally having both services in the same terminal is a major first for Varig and the airport," the spokesman added.

Varig also has introduced business class on its domestic flights, except for shuttle service, allowing business travelers to continue their travels within Brazil in enhanced comfort. The airline has built new airport lounges in Rio and Sao Paulo, and has announced it will purchase new Boeing 737-700 aircraft and reconfigure existing planes to add more room.

In other news, the Continental Airlines-VASP Brazilian codeshare agreement, which was penned last summer, has received a favorable response. "The agreement provides business travelers with seamless travel all on one ticket, allowing passengers who must make a connecting flight to move to that flight with the same ticket," said a spokesperson. Continental offers nonstop service from Newark International to Rio de Janeiro and Sao Paulo.