AS Brazil's new president, Fernando Collor de Mello, opens up
South America's largest market to trade, United States and other
foreign businesses are discovering a growing number of
As part of Mr. Collor's plan to revitalize Brazil's hyperinflated
economy, a 15-year-old prohibition on the import of thousands of
products - cars, toys, appliances - was lifted in May. These and
other products bear high tariffs that are to be lowered under a
four-year program announced in June. Tariffs on some products, like
textiles and related machinery, have already been reduced. A law
banning many computer products is under review.
"In the whole world, we market other products besides our cameras
and film," says Polaroid do Brasil president George Niemeyer. "But
we haven't done so here because of import quotas. As the government
eliminates these restrictions, we intend to market the whole
With additional sales of sunglasses, videotapes, and computer
diskettes, Mr. Niemeyer expects 1990 revenues to jump to $15
million, from last year's $10 million. Eventually, the Brazilian
market could equal that of Spain, he says, where Polaroid sells $40
million a year.
Brazil has long been touted as "the country of the future." But
burdened for the last decade by inflation and the third world's
largest foreign debt, most of the potential consumer market in the
country of 145 million remains hidden. On top of that, Collor's
efforts to bring down inflation, which include tight fiscal and
monetary policies, have greatly slowed spending and pushed the
economy into a recession.
Some analysts, skeptical about the new trade policy, say vested
business interests may keep out newcomers, especially in highly
government-controlled sectors such as computer equipment.
But officials promise that their policies to free up trade and
the economy in general will at last bring Brazilian buyers and
foreign sellers face to face.
"The environment hasn't been very propitious for investment,"
says Luiz Paulo Velloso Lucas, director of the industry and trade
department of the economy ministry. But now, "the economic
environment is turning around and we are fixing clear rules for the
development of trade and investment and the insertion of Brazil into
the international economy."
Mr. Velloso expects imports to grow by 15 percent this year from
$18 billion in 1989. The US and the European Community are the two
biggest sources of Brazil's imports.
A lunch time look at Rua Oscar Freire, Brazil's most chic
thoroughfare, gives some idea of the gap that officials hope imports
will help to fill.
The street is choked with cars manufactured on local assembly
lines by Volkswagen, Ford, General Motors, and Fiat. Top boutique
windows boast stylish winter clothing, made in Brazil. Inside
fashionable restaurants, rock music pours out from locally made
sound systems. Patrons' steaming lunches have been prepared with the
aid of microwave ovens and food processers, also produced in Brazil.
The maitre d' takes a telephone reservation. A computer tallies up
each table's bill.
The scene appears not much different from one in Los Angeles or
New York, except for the fact that it's summer in the northern