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| Brazil squares up to economic storm | Brazil squares up to economic storm |
| (about 1 hour later) | |
| By Gary Duffy BBC News, Sao Paulo, Brazil Times are getting tough for Brazil's manufacturers | By Gary Duffy BBC News, Sao Paulo, Brazil Times are getting tough for Brazil's manufacturers |
| Heading off into the skies above the state of Sao Paulo - a brand new aircraft produced for a customer in the United States. | Heading off into the skies above the state of Sao Paulo - a brand new aircraft produced for a customer in the United States. |
| As it prepares to mark its fortieth year of production, Brazil's Embraer has become one of the largest manufacturers of commercial jets in the world | As it prepares to mark its fortieth year of production, Brazil's Embraer has become one of the largest manufacturers of commercial jets in the world |
| More than 20,000 people work for Embraer in Brazil, but the company has spread to other parts of the world. It employs 1,720 people in Portugal, 634 in the United States and 304 in China. | More than 20,000 people work for Embraer in Brazil, but the company has spread to other parts of the world. It employs 1,720 people in Portugal, 634 in the United States and 304 in China. |
| Embraer's $21bn (£12bn) global order book is a buffer of sorts against the recent economic turbulence, but in an industry such as this there is no room for complacency. | Embraer's $21bn (£12bn) global order book is a buffer of sorts against the recent economic turbulence, but in an industry such as this there is no room for complacency. |
| "I must say there is no comfort zone in such an aggressive industry as the aeronautical industry," Horacio Forjaz, executive vice president of Embraer says. | "I must say there is no comfort zone in such an aggressive industry as the aeronautical industry," Horacio Forjaz, executive vice president of Embraer says. |
| "More recent events that took place in the financial world really concern Embraer." | "More recent events that took place in the financial world really concern Embraer." |
| Sharp falls | Sharp falls |
| The company is holding its nerve, but overall the outlook for Brazil's economy is less promising, with lower growth predicted for next year. | |
| We are extremely worried about the harvest Cesario Ramalho da Silva, president of the Brazilian Rural Society It is in the Sao Paulo stock exchange - known as the BM&F Bovespa - that the recent financial crisis has had its most visible impact in Brazil | We are extremely worried about the harvest Cesario Ramalho da Silva, president of the Brazilian Rural Society It is in the Sao Paulo stock exchange - known as the BM&F Bovespa - that the recent financial crisis has had its most visible impact in Brazil |
| In May, the index was at a record high. At one point during the recent market turbulence it had fallen by 50%. | In May, the index was at a record high. At one point during the recent market turbulence it had fallen by 50%. |
| It is a contrast with earlier this year when Latin America's biggest economy was growing at between 5% and 6%. | It is a contrast with earlier this year when Latin America's biggest economy was growing at between 5% and 6%. |
| At the time, this country, rich in natural resources from sugar to soya, was enjoying the profits of a booming commodities market. | At the time, this country, rich in natural resources from sugar to soya, was enjoying the profits of a booming commodities market. |
| Could do better | Could do better |
| Brazil was doing well some economists say, but not yet doing its best. | Brazil was doing well some economists say, but not yet doing its best. |
| The banking system is strong, and the economic indicators in the economy are much better Rubens Barbosa, business consultant and Brazil's former ambassador to the UK and the United States | The banking system is strong, and the economic indicators in the economy are much better Rubens Barbosa, business consultant and Brazil's former ambassador to the UK and the United States |
| "Brazil´s rate of growth, 5%, is about half of what China is," says Roberto Troster, a partner with consultancy Integral Trust in Sao Paulo. | "Brazil´s rate of growth, 5%, is about half of what China is," says Roberto Troster, a partner with consultancy Integral Trust in Sao Paulo. |
| "Considering our infrastructure and market conditions, it is slow for a country of Brazil's potential," he says. "Brazil was doing better than in the past but we still had a long road to travel." | "Considering our infrastructure and market conditions, it is slow for a country of Brazil's potential," he says. "Brazil was doing better than in the past but we still had a long road to travel." |
| Now, watching the scale of recent economic events, agricultural producers are concerned about the future. | Now, watching the scale of recent economic events, agricultural producers are concerned about the future. |
| "We are extremely worried about the harvest," says Cesario Ramalho da Silva, president of the Brazilian Rural Society. | "We are extremely worried about the harvest," says Cesario Ramalho da Silva, president of the Brazilian Rural Society. |
| "We are still going to harvest. At what price are we going to sell it? To whom are we going to sell? Are we going to achieve the same level of exports? I don't know. These are the big questions." | "We are still going to harvest. At what price are we going to sell it? To whom are we going to sell? Are we going to achieve the same level of exports? I don't know. These are the big questions." |
| Chinese dependence | Chinese dependence |
| Tougher times lie ahead, yet analysts say Brazil is better placed than ever before to ride out the storm. Brazil's leaders are taking action to deal with the financial crisis | Tougher times lie ahead, yet analysts say Brazil is better placed than ever before to ride out the storm. Brazil's leaders are taking action to deal with the financial crisis |
| "The banking system is strong, and the economic indicators in the economy are much better," business consultant and Brazil's former ambassador to the UK and the United States, Rubens Barbosa, says. | "The banking system is strong, and the economic indicators in the economy are much better," business consultant and Brazil's former ambassador to the UK and the United States, Rubens Barbosa, says. |
| "We have more than $200bn in reserves, and our foreign trade is diversified. Our trade with the United States is around 15 %, with Europe around 20-22%. | "We have more than $200bn in reserves, and our foreign trade is diversified. Our trade with the United States is around 15 %, with Europe around 20-22%. |
| "Our partners are in the emerging market countries and in the developing world. | "Our partners are in the emerging market countries and in the developing world. |
| "We will be much more dependent on what happens in China than in Europe and the United States." | "We will be much more dependent on what happens in China than in Europe and the United States." |
| Not recession? | Not recession? |
| Nonetheless, business leaders in Brazil are also nervously watching developments. Brazilian shares have halved in value this year | Nonetheless, business leaders in Brazil are also nervously watching developments. Brazilian shares have halved in value this year |
| The government is making $2bn available to help exporters hit by falling demand. | The government is making $2bn available to help exporters hit by falling demand. |
| However retailers here say they are holding on to a new found sense of confidence. | However retailers here say they are holding on to a new found sense of confidence. |
| "Even with the serious international crisis that we are experiencing - and there will be harder times for us - we are only talking about lower growth in Brazil," Emerson Kapaz, of the Institute for Retail Development, says. | "Even with the serious international crisis that we are experiencing - and there will be harder times for us - we are only talking about lower growth in Brazil," Emerson Kapaz, of the Institute for Retail Development, says. |
| "It is difficult to see on the Brazilian horizon the country entering a recession," he says. | "It is difficult to see on the Brazilian horizon the country entering a recession," he says. |
| "It is only a slower rate of development." | "It is only a slower rate of development." |
| Imprudent talk? | Imprudent talk? |
| On a wider international stage, Brazil is irritated that existing structures do not give sufficient weight to the voices of developing countries. | On a wider international stage, Brazil is irritated that existing structures do not give sufficient weight to the voices of developing countries. |
| "If we do not want to be dragged down by this crisis, isolated measures will not be enough to protect our national interests," President Luiz Inacio Lula da Silva said recently. | "If we do not want to be dragged down by this crisis, isolated measures will not be enough to protect our national interests," President Luiz Inacio Lula da Silva said recently. |
| "We need to make ourselves heard collectively in the discussions when decisions are taken on subjects that have a global impact." | "We need to make ourselves heard collectively in the discussions when decisions are taken on subjects that have a global impact." |
| And across Latin America the debate is still going on about how the economic crisis will play out here. | And across Latin America the debate is still going on about how the economic crisis will play out here. |
| Writing in Newsweek, the former Mexican foreign minister Jorge Castaneda said President Lula had been imprudent to talk initially of recent events as "Bush's crisis". | Writing in Newsweek, the former Mexican foreign minister Jorge Castaneda said President Lula had been imprudent to talk initially of recent events as "Bush's crisis". |
| And he was scathing about the "silly ideas" that have been circulating about the possible impact of the crisis in Latin America, the most dangerous of which he said had suggested the region would be largely impervious to the recent crisis. | And he was scathing about the "silly ideas" that have been circulating about the possible impact of the crisis in Latin America, the most dangerous of which he said had suggested the region would be largely impervious to the recent crisis. |
| Mexico, Chile, Brazil and Uruguay should manage just fine, emerging with only bruises and scrapes, he argued. Colombia and Peru would weather the storm, though suffering greater harm. | Mexico, Chile, Brazil and Uruguay should manage just fine, emerging with only bruises and scrapes, he argued. Colombia and Peru would weather the storm, though suffering greater harm. |
| But he warned of "severe damage" for Venezuela, Bolivia, Ecuador, Central America and the Caribbean. | But he warned of "severe damage" for Venezuela, Bolivia, Ecuador, Central America and the Caribbean. |
| Brazil will be relieved to be at the more optimistic end of this scale. | Brazil will be relieved to be at the more optimistic end of this scale. |
| Can cope | Can cope |
| Yet, within Brazil the newspapers are beginning to feature more ominous headlines about potential threats to infrastructure projects, and the implications of scarcer credit for the harvest in 2009. | Yet, within Brazil the newspapers are beginning to feature more ominous headlines about potential threats to infrastructure projects, and the implications of scarcer credit for the harvest in 2009. |
| People on the streets may soon be feeling the impact of recent events, with credit deals harder to get and more expensive. | People on the streets may soon be feeling the impact of recent events, with credit deals harder to get and more expensive. |
| Even so, a few years ago a crisis like this might have been devastating for Brazil. The hope and expectation now is that the impact will be much less severe. | Even so, a few years ago a crisis like this might have been devastating for Brazil. The hope and expectation now is that the impact will be much less severe. |