Corrections or additions?
This article by Bart Jackson was prepared for the June 20, 2001
edition of U.S. 1 Newspaper. All rights reserved.
`Jeito,’ the Brazilian Way of Doing Business
It is perhaps forgivable, even understandable, that
we know little nothing of South America’s largest nation. Of late,
it has produced few international rock stars, dueling chefs, or the
sort of similar luminaries that might tempt our major U.S. media to
acknowledge this country’s existence. Yet businesses of many types
could profit from getting to know Brazil’s 170 million increasingly
prosperous consumers. The country poses challenges, but some 90
of Fortune 500 companies have already staked major claims in Brazil’s
expanding economy. The conquistadors have come and proved the country
safe for commerce. Now it’s time for small and mid-sized companies
to size up the opportunities.
The Center for Global Business’s "International Breakfast on
on Thursday, June 21, at 8 a.m. at Mercer County Community College
is designed to provide both an overview and practical steps in getting
started in this growing market. The panel includes
da Cunha, senior vice president of Lehman Brothers;
May, founder of NCR Advisory Partnership; and
president of SGI International. Cost: $25. Call 609-586-4800.
The Center for Global Business, explains
"is no academic forum, but rather a real nuts and bolts
for small and mid-size firms seeking to explore and expand." Born
in Denmark, Hansen came to America originally to pick up a Harvard
MBA in international trade, and stayed to guide several corporations
out into foreign waters. "Most foreign traders fail at the
level," says Hansen. "They don’t get enough help
To fill that gap, the Global Business Center hosts monthly business
breakfasts, each focusing on one particular country. Speakers
include an economist who explains basic trends; a consultant who tells
how to get involved; and a veteran who presents his own harrowing
"Jeito" is the Portuguese/Brazilian term that May uses as
he explains the Brazilian approach to business. It roughly translates
into "the way of doing things." Says May: "If you don’t
know it, you will be totally lost." It is not that Brazilian
methods stand distinguishably more Byzantine, corrupt, risky, or even
unfriendly. They are just distinct.
If anyone should have a firm fix on the Brazilian way, it is May.
Following a youth spent in neighboring Argentina as part of a foreign
service family, May returned to the U.S. to gather an economics degree
from Purdue and an MBA from George Washington University in
commerce. Since then, he has managed Chase Manhattan’s Brazilian
and founded NCR Partnership — a financial advisory group to aid
companies globally expanding.
Probably the most agreed upon aspect of the Brazilian economic cycle
is that it soars and plunges in sharply defined cycles. Right now
it stands poised on a cusp — quivering. Whether things will climb
or skid, depends on whose opinion you ask.
that we must hold our breath until the fall elections, but that the
current government coalition has proved itself strongly pro-business
for the past four years. The devaluation and shift to a floating
in l999, along with increased foreign investment in telecommunications
and other fields have engendered positive sentiment among domestic
businesses and their investors. Four percent growth continues
These are not the ringing praises of a statistics-besotted economist.
Granted, Viera da Cunha, a Brazilian native, did take an economics
degree at the Federal University of Rio de Janeiro and later an
Ph.D. at UCLA Berkeley. Yet his theoretical views have been tempered
by long service with the World Bank in Washington D.C., and the past
three years as senior vice president of Lehman Brothers.
"In essence," says Viera da Cunha, "Brazil, as an export
platform, has not taken off like, say, Mexico after NAFTA. But it
stands ready to expand dynamically."
May is a little less sure. He reads the 1999 currency devaluation
less rosily, claiming it put prices under real pressure. Also, as
Argentina downsizes, Brazil, a great exporter to its southern
may be dragged down with it. But May’s real fear lies with the
energy crunch. Despite recent cutbacks of 23 percent, most of the
country faces severe brownouts and blackouts far beyond the most
fears of Californians and Europeans.
"Don’t talk to me about growing consumer prosperity," says
May. "If these folks can’t plug in a television, computer,
or even a desk lamp, they just aren’t going to buy them."
On the other hand, May and Viera de Cunha agree that Brazil will
straighten out its problems, and keep the lights on. The country is
politically secure, and unemployment, now at 7 percent, has dropped
substantially. And while the historic unequal income distribution
still exists, folks on the lower end are speedily moving up. For the
sharp and adventurous, ground floor opportunities are waiting in
— for those who can learn their Jeito. Here is May’s advice for
staking out a claim.
to just take your crates and storefront down into Rio and hope to
begin selling," laughs May. "The laws are so complex, and
they just pop up at you when you least expect it." Tariffs on
electronic items can shift from 50 percent to 10 percent, depending
on the season and the port. At the very least, you will need an
native agent who can see your goods through the labyrinth of customs,
and get them shipped across the maze of roadways.
Substantial aid also lies not far from home. The Brazilian-American
Chamber of Commerce in Manhattan can line you up with banks, all the
Fortune 500 Brazilian investors, buyers, and more.
with an American company already in Brazil to expand its product line.
If you sell office furniture, you might link up a carpet firm or
service provider. The goal is to pool people and get some specialists.
Better yet, link up with a going Brazilian concern.
One of May’s clients, selling an electronic attachment that turns
a standard television into a sophisticated webTV, linked with an
retail chain to push the items through, from the harbor to their
The company also joined with an American computer provider to
it matters less what you sell," says Viera da Cunha, "than
how you sell it." The small, high-income, sophisticated market,
blended with the much wider low-income majority can afford the whole
array of goods and services. The automotive and related products boom,
for example, is unprecedented, and there is tremendous demand for
any type of clothing. Meanwhile, fine art and jewelry finds a great
many buyers. Domestic consumption on all levels is rising, but
consumers remains a problem, making it advisable to tailor your goods
to the available retail outlets.
remains a problem. For many, Brazil is synonymous with the ruin
of its Rain Forest by a capitalist elite. Viera da Cunha insists,
however, that one need not despoil the forests to prosper in Brazil.
The country remains the second largest global producer of paper and
pulp. But unlike the 1970s, when the trend was to encourage the trade
of forest for cattle grazing pasture, virtually all the pulp comes
from tree farms in the southern part of the nation.
Meanwhile, the Amazon basin in the north suffers from drug-porous
borders and ruthless guerrillas. Brazil considers the area a valued
preserve, but Viera de Cunha says, it remains unclear how the region
can be made secure, and who will pay to make it so.
links between U.S. and Brazilian banks, investing and arranging credit
is surprisingly easily. "You’re better off choosing a large
bank that has been bought out by an American institution," says
May. Even so, look for breadth.
protocols mesh with Brazil’s culture. There are few taboos and no
elaborate gift giving or extended periods of "character
exist as in China. The biggest problem is likely to be making sense
who like doing business American style."
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