Why insist on playing with fire, which is precisely what this
    government and its so-called allies are doing when so much time and effort are wasted on a
    nearly pointless cabinet shuffle, while vital matters at hand go unresolved?
    By Brazzil Magazine

    Seven editions in three years of existence have confirmed the São Paulo
    Morumbi Fashion as the most important display for fashion in Brazil. The latest exhibition
    held in the Pinacotheque of the Ibirapuera Park from July 4 to July 7 to show the 2000
    Spring-Summer collections from the main national labels counted on British supermodel Kate
    Moss, whose girl-next-door looks and humility made her the toast of the party. But this
    reinforcement wasn’t needed.

    White was the color of choice and inspiration was sought in the romanticism and
    childhood of the ’80s. Dresses were of all lengths. When color was needed the favorites
    were yellow and orange. There were even sunglasses with yellow lenses.

    Fashion writers were curious to see what Alexandre Herchcovitch—one of the most
    respected fashion designers—had to show. They were not disappointed with his complex
    style and use of transparencies and whites mixed with orange tones. Herchcovitch, who used
    to be an enfant terrible creating among other eccentricities the pants that let
    pubic hair show, was back though much better behaved. He seems to have adhered to haute

    M. Officer went for the shocking effect and the show-it-as-it-is look by eliminating
    the dressing room and making its models change clothes on stage, among the hangers that
    are known as araras (macaws) in the fashion world, making the act of denuding part
    of the show. The revealing spectacle—with futuristic wardrobe for the models—was
    a joint effort by stylist Carlos Miele and iconoclast pop artist Nelson Leirner, whose
    work is representing Brazil in the Venice Biennial, one of the world’s most important art

    Inspired by erotic British photographer David Hamilton and his nymphets,
    Ellus present a collection it called "sexy innocence" with lots of worn jeans,
    white shirts and T-shirts. It was Ellus who hired Kate Moss to model with exclusivity for
    the company. But Brazilian Renata Maciel shone as brightly as the British model.

    The fashion industry in Brazil has come of age. There are 22 companies generating $300
    million in businesses a year while creating 1.4 million jobs. Many Brazilian models and
    designers are also getting international attention, among them designer Ocimar Versolatto
    who has made a name for himself in Paris. Beverly Hill’s Giorgio has signed a $500,000
    exclusive contract with Brazilian Fause Haten to sell his clothes in the U.S. Gisele
    Bündchen and Isabeli Fontana are two of the best-known models overseas. Fontana was
    chosen by Vogue as a promise for the new century.


    For five months the public was subject to a publicity barrage touting the virtues of
    the privatization of telephone services in Brazil. Famous and pretty faces, catchy jingles
    and TV spots talked about a new era of free competition and better communications. But
    when it came time for a first taste of the promised goods it was chaos.

    July 3, a Saturday, the day the new long distance service started, only 6.2 million
    calls from a total of 29.7 million were completed. During the following days the situation
    got even worse. On Wednesday, President Fernando Henrique Cardoso intervened, giving an
    ultimatum of three more days for the problems to be fixed, first making sure that this was
    the time the companies themselves thought was necessary to normalize the situation.
    Normalize seems like such a strong word. The telephone blackout brought to light a little
    known fact of the Brazilian communications world: not completing a connection half the
    time you try is considered normal.

    For a whole week, people trying to call long distance became frustrated from having to
    listen to busy signals, recordings announcing the impossibility of completing the call,
    and sometimes paying to talk to a person in another city or even another state than whom
    he intended. The government blamed the new concessionaires while they pointed the finger
    at each other and at the government.

    The private telephone companies knew how risky the switch would be. Not only was there
    not enough time for all the needed tests, but the firms were also having trouble getting
    knowledgeable technicians to do the work. Embratel, the state long-distance carrier, which
    continues to offer its services together with the private firms, is accused of rushing
    things. Despite holding the monopoly of all long distance, Embratel had to distribute 70
    percent of this market to the regional telephone companies and they seemed eager to get
    out of that deal. The government company also wants to have a lead on its service before
    January 2002 when competition will be wide open with regional firms being allowed to
    handle long distance calls to areas outside their concession territory.

    For several months residents of São Paulo, where almost half of the country’s
    telephone calls are made, have been fuming at Telefónica, the Spanish conglomerate that
    took over the system in 1998. The new company was quick in adding two million lines to the
    five million already in operation in the city to supply a population hungry for
    telephones, but the addition was accompanied by several problems including constant busy
    signals, crossed lines and lines that went dead for days.

    Their sloppiness resulted in fines. And Telefónica—together with the Rio
    concessionaire—had to fork out $1.7 million. The federal government is again
    threatening million dollar fines that might reach as high as $23 million against those
    responsible for the most recent snafu. These companies are also being pressured through
    the state and local Procons, consumer protection agencies, to pay damages to their
    customers who lost business or had other losses due to their inability to make calls soon
    after the switch.

    Embratel has been mentioned as the biggest sinner of them all. Despite all the problems
    of privatization it’s believed that it will democratize telephone in Brazil. It’s expected
    that by the year 2002 there will 33 lines for every 100 Brazilians instead of the 13 that
    are available today.


    Washing machines were still a novelty and most Brazilians were happy—or didn’t
    know better—with the traditional funny-smelling bar soaps used to wash their clothes
    when Unilever—an Anglo-Dutch conglomerate—introduced OMO to the country. That
    was in 1957. Brought from England, clothes detergent OMO was an abbreviation for Old
    Mother Owl and the packaging itself contained a drawing of such a bird. Since then OMO has
    become the hands-down favorite laundry detergent in the country representing half of the
    400,000 tons of laundry soap produced annually in Brazil.

    More than that, Gessy Lever, the Brazilian subsidiary of Unilever, dominates 80% of the
    laundry detergent market with names like Ala, Minerva, Campeiro, Brilhante, and naturally,
    OMO. Procter and Gamble comes in second with 12%, selling Bold, Pop, and Ace. The rest of
    the market is shared by Arisco (3.5%), Sanbra (2.2%) and all the others (3.7%). The
    overwhelming OMO leadership has endured some competition in the past, but most of the
    products simply disappeared while others only were able to get some modest space on the
    supermarket shelves.

    Intent on changing this equation Procter and Gamble is gambling heavily that it can
    compete with Unilever in Brazil and in the neighborhood. (Unilever has over 500
    subsidiaries in 90 countries and is one of Europe’s largest multinationals selling more
    than Sony, Nestle, Coca-Cola and also outselling its main competitor American Procter
    & Gamble.) To be able to do this the Yankee company has launched Ariel simultaneously
    in Brazil, Argentina, and Chile.

    Ariel is already the soap leader in all of Latin America with 35% of the sales in the
    area. This offensive has renewed Gessy Lever’s determination to remain the top-seller in
    Brazil and the company is increasing its already significant marketing expenses to
    guarantee that this happens. Procter & Gamble says it will be spending $120 million
    dollars in marketing to guarantee the success of its product. Five million free samples of
    the product have already been distributed.

    Will the American company succeed? They seem to be ready to spend on marketing at least
    as much as the competition. They have an annual budget of $30 million for this purpose. In
    an interview with economy magazine Exame, Antônio Kriegel, Gessy Lever’s
    detergents director, talked about the mood and intentions of his company: "We intend
    to make them have the biggest losses in the history of Cincinnati," in a reference to
    the city in which Procter and Gamble is headquartered.

    Things don’t bode well for 150-year-old P&G. Their ten-year presence in Brazil has
    been a succession of gross mistakes. It has changed chairmen four times in one decade.
    They were not able to buy Anakol, which produces Kolynos, the toothpaste leader in Brazil
    and on the other hand bought Phebo, an upscale but obsolete toilet soap. They also tried
    unsuccessfully to sell a diaper that was too sophisticated and expensive for the Brazilian


    They don’t make deals like that, not in Brazil anyway. The largest beer maker in the
    country gobbled up the second place creating in the process the third largest beer company
    in the world in a $4.5 billion deal, the biggest ever in the country. Together they will
    have 71.6% of the Brazilian beer market, which has provoked shouts of "monopoly"
    from the public, but mainly from the smaller competitors that have names like Schincariol
    and Kaiser.

    Welcome to globalization Brazilian style. Due to the passion these beers arouse in
    consumers, the recent announcement that Brahma and Antarctica would share the same board
    of directors under the name Ambev (American Beverages) led some to compare the acquisition
    to their favorite soccer team being bought by its main adversary. Both companies are
    centenary institutions. While Companhia Antarctica Paulista was founded in 1885, by a
    group of friends from São Paulo, Companhia Cervejaria Brahma was created three years
    later in Rio by Swiss Joseph Villiger.

    Brahma employs 9,700 people, produces 4.3 billion liters of beer yearly, has 28
    factories and had $42.2 million of profit in the first quarter of 1999. On the other hand,
    Antarctica has 6,800 workers, makes 2.1 billion liters of beer a year, has 22 factories
    and had a profit of $9.95 million in the first quarter. Brahma is already the world’s 8th
    largest beer maker and Antarctica the 15th. Combined they will lose in size only to
    American Anheuser-Bush and Holland’s Heineken.

    For decades, Brazilians willing to drink a beer had to answer the question:
    "Antarctica or Brahma?" More recently the choices increased, but both continued
    to be overwhelmingly the favorites. Brahma and Antarctica have been engaged in an ad war
    since the beginning of the century. That fight got louder in the ’50s and nastier in
    recent years. Many celebrities were used to sing the virtues of both sides.

    When Brahma launched it Malzbier in 1914 the beverage was presented as "especially
    recommended to nursing moms." Antarctica started to sell its Guaraná soft drink in
    1921, something that was copied by Brahma six years later.

    This decade the dispute between Washington Olivetto’s W/Brasil ad agency, which had the
    Antarctica account, and Eduardo Fischer’s Fischer, Justus, on the Brahma side made school.
    The war was never so heated as during the 1994 soccer World Cup in the U.S. when the
    stadiums were invaded by fans of both beers. Brahma was presented as "Number 1"
    while Antarctica was "The National Preference." Another rivalry had to do with
    Carnaval. Brahma has been sponsoring the Carnaval in Rio while Antarctica chose the
    Salvador (state of Bahia) one.


    Curiously, the idea to merge the companies came from a man who drinks only mineral
    water, abstaining completely from beer or soft drink. He is 59-year-old Jorge Paulo
    Lemann, the chairman of Brahma. Lemann was naturally looking overseas. The international
    vocation of the new company can be seen in the fact that it was born with three names to
    fit diverse markets. It will be called Companhia de Bebidas das Américas, in Brazil;
    Compañía de Bebidas de las Américas in Latin America and American Beverage Company in
    the United States and the rest of the world.

    Brahma had everything going for it. After introducing streamlined and modern concepts
    of management it had a 30% increase in profits in 1998 while Antarctica suffered a 20%
    decline. Convincing Antarctica to accept the merger was not easy though. Many had tried
    unsuccessfully in the past, including American Anheuser-Busch whose best deal was to
    secure a partnership with the beer company—this arrangement will end now—mainly
    due to what was seen as arrogance by the Yankees.

    Brazilians are not big beer guzzlers. While Germans drink 140 liters of beer per capita
    a year, and Americans consume 80 liters, Brazilians survive with 50 liters. On another
    front Brahma and Antarctica are also soft drink producers, each one producing 1.2 millions
    liters of soda a year. Combined they represent 14.6% of the soft drink market, which is
    still no serious competition for Coca Cola (46.5%). Pepsi has miserly 4.8% share.

    The merger will not happen before the Cade (Conselho Administrativo de Defesa
    Econômica—Administrative Counsel of Economic Defense) studies the case—it has
    120 days to do this—but nobody believes there will be a veto, since President Cardoso
    has already hailed the merger and encouraged other similar deals. He also will be the one
    to sign the final authorization.

    World’s Top Ten Beer
    Producers in 1998

    Production in millions of hectoliters

    Anheuser-Busch (US) 121.3
    Heineken (Holland) 79.1
    AmBev (Brazil) 64.0
    Miller (US) 52.9
    SAB (South Africa) 43.0
    Interbrew (Belgium) 36.8
    Carlsberg (Denmark) 33.7
    Grupo Modelo (Mexico) 30.0
    Kirin (Japan) 29.2
    Foster’s (Australia) 28.7



    Earnings: $5.73 billion

    Actives: $4.5 billion

    Employees: 17 mil

    Factories: 50

    Production in liters: 8.9 billion

    Beer and chopp (as draft beer is called in Brazil) has inspired
    some of Brazil’s greatest composers, who not only imbibed the potion as well as sang about
    it. While Paulista (from São Paulo) composer Adoniran Barbosa only drank Antarctica, some
    icons of bossa nova like Tom Jobim, Vinicius de Moraes, and João Gilberto were
    Brahma guys. Caetano Veloso and Chico Buarque de Hollanda even wrote a famous ditty in
    which they celebrate the Brazilian way of life and Brahma:

    Vai Levando

    Caetano Veloso and
    Chico Buarque

    Mesmo com toda fama
    Com toda Brahma
    Com toda cama
    Com toda lama
    A gente vai levando
    A gente vai levando
    A gente vai levando essa chama

    Mesmo com todo emblema
    Todo problema
    Todo sistema
    Todo Ipanema
    A gente vai levando
    A gente vai levando
    A gente vai levando essa gema

    Mesmo com nada feito
    Com a sala escura
    Com um nó no peito
    Com a cara dura
    Não tem mais jeito
    A gente não tem cura

    Mesmo com toda via
    Com todo dia
    Com todo ia
    Quando não ia
    A gente vai levando
    A gente vai levando
    Vai levando
    Vai levando essa guia

    Keep on going

    Even with all the fame
    With all the Brahma
    With all the bed
    With all the mud
    We keep on going
    We keep on going
    We keep on taking this flame

    Even with all the emblem
    All the problem
    All the system
    All Ipanema
    We keep on going
    We keep on going
    We keep on taking the gem

    Even with nothing done
    With the room dark
    With a knot in the chest
    With a straight face
    There is no way
    We have no cure

    Even with all the road
    With the whole day
    With all the going
    When not going
    We keep on going
    We keep on going
    Keep on taking
    Keep on taking this way

    The merger has made some people recall with nostalgia a phrase attributed to Vicente
    Matheus, the late president of the Corinthians soccer club: "We would like to thank
    Antarctica for having sent us these little Brahmas." The same phrase wouldn’t be
    funny at all today, just a portrait of a new reality.


    A Proud

    It was in Cuernavaca, Mexico, the same city that became famous in the beginning of the
    20th century for being the center of Emiliano Zapata’s uprising for agrarian reform, where
    Brazilian leftist revolutionary and House Representative Francisco Julião chose to live
    and ended up dying on July 10, 1999 from a heart attack at age 84 while in the kitchen
    preparing spaghetti—his favorite dish—for a friend. Accused of subversion, the
    lawyer and leader of the Peasant Leagues—together with Pernambuco governor Miguel
    Arraes—was jailed, stripped of his political rights and forced into exile after the
    1964 military coup.

    He used to defend agrarian reform forcefully arguing that it had to be done "by
    law or by force." Julião went into exile to Mexico City and stayed there until 1979
    when he was amnestied by the military regime. Back to Pernambuco he once again tried
    unsuccessfully to be elected a representative. His old friends from the left abandoned him
    and Julião, disappointed, in 1987, once again headed to Mexico.

    The Peasant Leagues originated in the little town of Vitória de Santo Antão in the
    interior of Pernambuco state in 1954. Peasant José Ortêncio, who with 140 other families
    leased the Engenho Galiléia farm, created with his colleagues the SAPP (Sociedade
    Agrícola de Plantadores e Pecuaristas de Pernambuco—Agricultural Society of Planters
    and Cattle Raisers of Pernambuco). Harassed and roughed up by the police they looked for
    help among their House Representatives. Francisco Julião from the PSB (Partido Socialista
    Brasileiro—Brazilian Socialist Party) offered his support. He had been elected to the
    post of deputado federal (House Representative) first in 1950.

    The press started calling the new organization led by Julião Peasant League since it
    looked like a similar movement from the ’50s, which had that name. Their main demand in
    the beginning was merely that peasants got minimum wage and that women were paid the same
    as men. By 1962 the movement had spread to 13 states under the leadership of Julião. The
    next year they created the Conferência das Ligas Camponesas do Brasil and had planned a
    national congress for 1964, but then the military took over in April and the leagues
    became extinct.

    At the time, despite laws on the books assuring their rights to wages, peasants were
    "hired" through a method called "regime de cambão", in which
    the landowner acquired the worker for a low price in an auction similar to those used to
    sell black slaves in the past. The hired hand was then forced to work just for food during
    ten days.

    Julião was writing his memories and kept on writing them until the day before his
    death. The first volume, which tells how the Peasant League started, is finished and
    should be published at the end of the year. He had moved to Cuernavaca three years ago
    where he lived with his Mexican wife Marta, whom he had met soon after going into exile.
    Both were divorced and had children from their previous marriages. He, six; she, ten.

    500 Years

    Tourism minister Rafael Greca, cried when he heard the country duo Chitãozinho &
    Xororó singing "500 Anos" (500 Years) on the phone. He had asked the successful
    singer-composers in March to write the official hymn for the celebration of the 500 years
    of the discovery of Brazil, which will be celebrated in the year 2000. And they were
    giving him a first taste of the completed work.

    Paulo Debétio and Paulinho Rezende wrote the lyrics for "500 Years." The
    song talks about the wanderings of a cowboy throughout the country’s history starting with
    the arrival of Portuguese Pedro Álvares Cabral to the state of Bahia in 1500 up to the
    Independence of Brazil in 1822.

    The news about the moved minister brought plenty of attention to the tune, most of it,
    however, negative. Other composers complained about the way the choice was made without
    using a competition or a commission of notables to pick the winner.

    Rio Assemblyman Chico Alencar, who also teaches history and is one of the co-writers of
    the upcoming multivolume book A Redescoberta do Brasil (Brazil’s Rediscovery), criticized
    what he called the "official and jingoistic" tone of the composition. Talking to
    Rio’s daily O Globo, Tom Jobim’s partner, Paulo César Pinheiro, didn’t think it was
    important to get an official song: "From Pixinguinha up to now we have excellent
    compositions that can be used for the date. I cite for example "Aquarela do
    Brasil" ("Brazil"), Ari Barroso’s masterpiece. Anyway, a competition would
    have been the best way."

    Chitãozinho & Xororó credited the criticism to jealousy from composers who are
    not as popular as they are and to prejudice against the sertaneja genre of music
    that they do. "Everyone has his own space," they said. "If the minister
    invited us it was because he likes our work. This is our merit, something we conquered
    throughout our career."

    500 Anos

    O meu país é uma arena
    Onde eu bebo água fresca
    Nas cacimbas do sertão
    Sou berranteiro andarilho,
    sou matreiro
    Sou peão, sou boiadeiro
    na poeira desse chão
    E lá se vão 500 anos de galope
    Não duvide que eu tope
    Contar tudo que eu já vi
    No meu cavalo por esse
    Brasil afora
    Eu passeio pela história
    Do Oiapoque ao Chuí
    Eu vi chegando caravelas
    do futuro
    Lá no meu Porto Seguro
    Quando o sol trazia luz
    Vi bandeirantes atrás
    de ouro e diamante
    Nos lugares mais distantes
    Da terra de Santa Cruz
    Andei nos pampas
    Vi a Guerra dos Farrapos
    E por um triz eu não escapo
    No meu ligeiro alazão
    Vi Tiradentes, vi Antônio
    Lampião, índio guerreiro
    Padre Cícero Romão
    Eu vi Zumbi, nego arisco
    dos Palmares
    Feito uma oração
    De um cavaleiro, escutei
    um grito forte
    De independência ou morte
    À beira de um riachão
    Eu sou o tempo
    Fui eu que mudou
    os ventos
    Mas já são outros 500
    E eu vou cantar noutra canção

    500 Years

    My country is a
    giant arena
    Where I drink fresh water
    In the backlands’ cisterns
    I am a boisterous wanderer,
    I am cagey
    I am peon, I am cowboy
    in the soil’s dust
    There we have 500 years of gallop
    Don’t you doubt that I dare
    Telling all I have seen
    On my horse
    throughout Brazil
    I walk through history
    From Oiapoque to Chuí
    I saw caravelles from the
    future arriving
    There in my Porto Seguro
    When the sun brought light
    I saw fortune soldiers looking
    for gold and diamond
    In faraway places
    Of the Holy Cross land
    I walked on the pampas
    I saw the Ragtag War
    And I barely escaped
    On my swift sorrel
    I saw Tiradentes, I saw Antônio
    Lampião, warring Indian
    Father Cícero Romão
    I saw Zumbi, elusive black
    from Palmares
    As a prayer
    From a knight, I heard
    a mighty shout
    Of independence or death
    On the banks of a brook
    I am the time
    I am the one who changed
    the winds
    But this is another story
    And I will sing it in another song


    How much would it cost to eradicate poverty in Brazil? The government was curious to
    know and a little more than a year ago ordered a study from a consortium of private
    companies and universities led by the firms Bozz, Allen & Hamilton, Bechtel
    International, and ABN Amro Bank. The preliminary findings are coming in and according to
    the surveyors the price tag to wipe out poverty is equivalent to the Brazilian GDP: $800
    billion, to be laid out in eight years. Experts from the Budget and Management Ministry
    have already added, however, that the Brazilian social debt is inestimable. The study also
    proposes the development (at a cost of $165 billion) of 350 regional projects. But the
    federal government would cover only 18% of their costs, with the rest coming from states,
    municipalities and the private sector.

    According to the Cardoso administration’s Pluriannual Plan, which covers the 2000-2003
    period and is being presented in August to Congress, the government intends to spend 12.5%
    of the GDP in the social area, what would represent roughly $100 billion. The government
    has established some goals for the next few years including the end of illiteracy by 2003.
    While on average children in Brazil stay five years in school this should increase to
    eight years by the year 2007.

    At the same time Brazil has been in the middle of a debate around an idea by the
    president of the Senate Antônio Carlos Magalhães to create a tax to fight poverty.
    President Fernando Henrique Cardoso himself joined the battle saying that the idea is
    impractical and that he had presented a similar project to tax large fortunes 10 years ago
    when he was a senator. To the scorn voiced by Luiz Inácio Lula da Silva, PT’s (Partido
    dos Trabalhadores—Workers’ Party) honor president, who called the senator’s proposal
    a "marketing ploy", Magalhães responded: "He lives off peoples’ misery and
    poverty. I want to eradicate all this."

    According to the Prodasen (Centro de Informática e Processamento de Dados do Senado
    Federal—Information and Data Processing Center of the Federal Senate) there are at
    least 12 bills dealing with the subject being studied at the moment, some for as long as
    10 years.

    Down But Up

    In another front of poverty, changes in the methodology used by the UN have downgraded
    Brazil’s position in the world’s rank of development despite the fact that all the
    economic and social indexes have improved since 1995 when the previous report was
    conducted. The just-released index, which classifies countries according to their GDP,
    education and health, removed Brazil from the company of the developed nations where it
    was placed last year. Brazil now belongs to the second of the three groups in which the
    174 countries analyzed are divided. Based on data from 1997, the country comes in 79th
    place with a 0.739 HDI (Human Development Index), placing it between Saudi Arabia and
    Peru. The country is now considered to have medium human development. Brazil occupied 62nd
    place in the previous report when it had a 0.809 HDI.

    From 1995 to 1997 the per capita income adjusted for ability to buy in Brazil has
    increased from $5,928 to $6,480. During the same period life expectation grew from 66.6
    years to 66.9 and the literacy rate increased from 83.3% to 84%.

    And, surprise, dispelling the notion that the Brazilian private sector does not invest
    in social programs, a new study conducted by Ceats/USP (Centro de Estudos em
    Administração do Terceiro Setor, da Universidade de São Paulo—Center of Studies in
    Administration from the Third Sector of University of São Paulo) shows that 56% of the
    companies doing business in the country have social and community programs. The work,
    however, shows also there is plenty of room for more to be done since 43% of the firms
    confessed to doing nothing in the social area.

    While 61% of the multinationals invest in social work, and 56% of the private domestic
    companies to the same, only 42% of the public concerns reserved any money for social
    efforts. Children’s’ issues are the favorite area in which these resources are used. The
    Ceats/USP study reveals that 40.29% of all the projects deal with education. In second
    place comes health, consuming 26.01% of the resources.

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