Great times ahead for the Northeast

Apparently cleaned from its endemic corruption, the Brazilian northeast
seems ready to take its place in a modern and developed new Brazil. An American
company is building a theme park in the area with Brazilian folklore characters.
And even Disney is thinking about installing there its Tropical Disneyland.

Carlos Emmanuel da Fonseca Barreto

For many years, the northeast portion of Brazil has been considered, the black hole of the country. Many
past governments invested millions of dollars in infra-structure projects which were never finished because some of
the funds were funneled into the pockets of corrupt-politicians, or because inflation increased the final price of the
projects so much that there was not enough money to finish the work.

The northeast has also been a region with innumerable political scandals. The impeached ex-President Fernando
Collor de Mello comes from there. So does the so-called gang “Anões do Orçamento” (the dwarves of the government
budget) who robbed millions of dollars. More recently, the federal government had to intervene in Bahia’s Banco
Econômico which after many years of financing political campaigns had accumulated a series of bad debts.

The region is home for many political demagogues still very active on the national political arena. People like the
ex-congressman, ex-governor, ex-president and presently the leader of the Senate, José Sarney and the many times
ex-governor, ex-congressman and presently Senator Antônio Carlos Magalhães (ACM). Add to them Calmon de
Sá, Econômico’s owner, twice Minister of Commerce and Industry, former Banco do Brasil’s president.


There are many signs, however, that this Brasil
(old Brazil) is over. Many of these swindles have been
disclosed and the parties involved exposed to public opinion that will judge them on the ballot. That makes for a very
promising future for the northeastern Brazil, with high levels of expectation from private entrepreneurs.

Recently the region has been receiving great amounts of private investments and the state governments are doing
their jobs to attract such investments to the region. Last March, a seminar promoted by the
Exame magazine gathered a group of seven state governors and 500 people between entrepreneurs and politicians. The one day seminar
debated over the means to eliminate the obstacles that still exist for developing the Northeast.

One of the main focus of the seminar was to explore what the region has in abundance: natural beauty. According
to the World Trade Organization (WTO), in 1995, tourism generated $563 billion worldwide, and among the
emerging economies, Brazil’s revenue from tourism reached $2.1 billion (ranked 11). The amount is not great given the
1995’s Brazilian gross domestic product (GDP) of $680 billion. Nevertheless, the WTO registered a 5 percent increase
from 1994 revenues.

The president of TAM Airlines, Rolim Amaro, stated that “in 1994, 213 thousand tourists were brought to the
northeast from other parts of Brazil.” Amaro believes that after the tremendous increase in 1995, the inflow of tourists only
from the rich regions of southern Brazil will reach 1 million travelers in 1996. Furthermore, the two major Brazilian
airlines, VARIG and VASP, offer several international flights connecting the northeastern capitals to Europe, the United
States and Asia. And many other major world airlines like Air France, Lufthansa and Alitalia flies to the northeast as well.

A long time believer in the region’s potential is the ex-formula one pilot, Nikki Lauda, who through his Lauda Air
offers weekly flights from Europe to beautiful Porto Seguro (Bahia) since the late 1980s. Besides Porto Seguro, other
major tourist destinations are Salvador and Itaparica (Bahia), Maceió (Alagoas), Recife and Olinda (Pernambuco),
João Pessoa (Paraíba), Natal (Rio Grande do Norte), and Fortaleza (Ceará).

Yet, it is off the coast of Bahia and Pernambuco, Abrolhos and Fernando de Noronha respectively, that paradise
rests. The two archipelagos are filled with submarine caves, 1500s wrecked caravels, colorful reefs, and a diversified
marine life. It is a diver’s dream. The area needs infra-structure however. The Banco do Nordeste do Brasil (BNB), to
boost investments from local entrepreneurs, raised the credit lines available from $900 million in 1994 to $2.9 billion in
1995. Furthermore, the Cardoso government has promised an increase of resources to the local economy through
the BNDES (National Bank for State Development).

Meanwhile some businessmen are jumping at the opportunity to catch the wave of increasing profits in the
region. Suarez, a contractor company from Bahia for example, has two ongoing projects for new resort hotels with
340 apartments on the capital Salvador and on the Itaparica Island, right off the coast. Furthermore, the Keynoox
Company from Miami is building a theme park after Brazilian folklore figures in Fortaleza, and another American, Wet’n
Wild, is constructing an aquatic park in Salvador.

The region’s vast virgin coastal beaches of white sand and blue water, and the all-year sunny weather creates the
perfect environment for the new world’s playground. Besides, the charming and pleasant people of the region makes the
place a welcome tourist attraction. The Disney Company has been researching the Brazil’s northeast for its new
Tropical Disneyland Park, a sure success.


The president of Abril Group and editor of magazines

Veja and Exame, Roberto Civita, stated during the seminar
that “we are going to show the world that the Northeast is not only potential, but a reality.” Tourism could become
the Northeast’s new economic cycle. In 1995, the region’s GDP of $99 billion grew 9.8 percent while the country
grew by 5.4 percent. In the past few years, 1,017 new industries set up production plants in the area generating 300
thousand new jobs, and another 100 thousand will surge in the wake of 250 ongoing industrial projects in the region.

The Northeast already hosts some of Brazil’s biggest multinationals, like Aracruz Cellulose and the Odebrech
Group. Odebrech is a construction giant present in every continent, and with projects in 21 countries, including the
United States (builder of California’s north-south aqueduct). Furthermore, some of Brazil’s most profitable plants are
located in the Northeast (i.e., the Vicunha Group and Grendene Shoes). However, the scant population is another one of
the problems in the region. The per capita income of $2,500 is half of the country’s $5,000, illiteracy rate reaches 37
percent while 18 percent in the rest of Brazil, and life expectancy is 64 in the Northeast and 67 overall. The governor of
Ceará, Tasso Jereissati, advocated during the seminar that the northeast does not need government subsidies. “The
success of the region depends much more on the Real Plan (Brazil’s economic stabilization program that cut inflation to
20 percent per year) than on subsidies from the central power,” he stated.

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