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BRASILIAIncredible as it may sound, the worlds most striking capital city of the future is about to turn 50. And while Brasilia prepares tgreet middle age with perhaps a few wrinkles and a slightly larger midriff than first planned, it retains the stunning beauty thatmade it the architectural pinup girl of the 20th century.

Does life begin at 50?

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Brasilia was born as a bold statement of New World determination to build aetter future.As the iconic capital prepares to celebrate its 50th anniversaryext year, it grapples with problems and successes that its founders nevermagined and is seeking new ways to grow as a center for high-tech business.

he years have been kind but also a little cruel.Most importantly, Brasilia has outgrown itsouthful single-mindedness. No longer is it justseat of government tucked away in the trop-s. Today, Brasilia is carving out a new role ascenter for international investment in a ma-r emerging nation, particularly in informationchnology (IT) and related sectors of the newnowledge-based economy. Financial services,gistics, and tourism are also on the list.

Born of hope, Brasilia was always a childthe future. In 1891, the countrys first

publican constitution set aside 14,400uare kilometers in the central altiplano fornew federal district. By moving the capitalty to the interior of Brazil, the governmentught to spread development and integratee U.S.-sized nation, both geographically andolitically. But the dream gathered dust foralf a century. Then, in 1956, a brash newyes-we-can president named Juscelinoubitschek said do it, and the new city was

arved out of scrubland and woodland 900lometers northwest of the then capital, Rioe Janeiro. Inaugurated in 1960, it was onlyartly finished modernity amidst mud.

The world knows Brasilia mainly for thetur istic architecture of Oscar Niemeyer. Hisork features swooping concrete curves taper-g into delicate columns, often set dramati-

ally against water. Few 20th-century buildingsan surpass the modernist beauty of theamaraty Palace, which houses the foreigninistry and is a series of arcs in a reflectingool, or the crown-like Metropolitanathedral, particularly when lit up at night.

But equally seminal, and in the long run moreproblematic for the citys evolution, were therevolutionary concepts of principal urbanplanner Lcio Costa. Costa envisioned Brasiliaas an egalitarian city where the different socialclasses comprising a population of a half mil-lion people would live together in a spaciousgarden environment planned down to the lastblade of grass. Cars would flow smoothlyalong strategically placed arteries, without traf-fic lights. There would be no congestion.

In a way it has worked, but not as Costadreamed. In a sense, Brasilia has indeedbecome a classless society, but only because justabout everyone who lives there is rich or atleast economically comfortable. Poorer peoplecommute into Brasilia by bus or train from ahost of satellite cities 20 kilometers or morefrom the postcard city center. Meanwhile, thefederal district has become home not to theimagined half a million people but to 2.5 mil-lion, or even 3.5 million if you count the townsof the contorno , lying just over the border inthe state of Gois.

Many of these surrounding townshipsstarted life as desperately poor slums, butover the years they have acquired their ownshare of middle-class prosperity, in part dueto overspill from Brasilia.

With the benefit of hindsight, this explosivegrowth looks to have been inevitable. Tens of thousands of peasants trekked to Brasilia inthe early days to work in civil constructionand wanted to stay. Fifty years later, thenational capital still attracts poor Brazilians,in particular from the drought-plagued north-

east. Even the simplest public-sector jobbrings lifetime security and benefits unimag-inable for a sharecropper. Of course, manymigrants never achieve such nirvana, butsome do, and others or their children goto college and move up in society.

Curiously, all this migration makes the cap-ital a true democratic melting pot within theracial and cultural potpourri that is Brazil.Politicians and hangers-on come from allstates, and the intelligentsia hails predomi-nantly from the south and southeast. However,theyre outnumbered by migrants from thenortheast and their descendants. As a result,the capital reflects the real Brazil more than,say, Rio or So Paulo does.

But in one fundamental way, Brasiliaresembles no place else in the country: It is rich.The vast spending power of the federal govern-ment, the federal district government, and theirwell-paid, well-perked employees fuels a hugelocal service economy in everything from gasstations and restaurants to law firms and ITcompanies. The figures are impressive. The fed-eral district as a whole, even counting thepoorer satellite cities, enjoys a per capitaincome roughly double that of the richeststate, So Paulo, and more than four times thenational average. Brasilia has relatively morecomputers, broadband access, and mobilephones than any other state, and it rankshighest in terms of higher education, literacy,and longevity. All this prosperity gives Brasiliaa United Nations Human Development Indexranking that rivals Germanys and leaves therest of Brazil far behind.

DOES LIFE BEGIN AT 50 ?

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Interview

Peninsula Press talks with Jos Roberto Arruda,governor of the federal district

What message would you like to send t henew U.S. president about Brasilias plansto become an investment center withinLatin America?First, I hope that when President Obamacomes to Brasilia, the first thing he notices ishow much it resembles Chicago, which heloves. He will see similarities in the architec-ture, the population, the young people, the stu-dents, and at certain times of the year, even theclimate. I think Obama will be surprised at thedegree of development he sees in Braziliancities and, in particular, Brasilia. I know hesheard a lot about Rio de Janeiro, with its beau-tiful beaches, and Salvador, with its strong

African roots, but Brasilia synthesizes all of Brazilian civilization. This is where all ourregional cultures come together. ...To knowBrasilia is to know Brazil in microcosm. Imvery optimistic about Brazil-U.S. relations, inparticular during the Obama administration,because hes a new and different president whohas changed the profile of American politics,and Brasilia has the same role in Braziliansociety. It has changed the profile of Braziliansociety.

You have spoken of your plans to developBrasilia as a major air logistics center. Howdo you plan to increase the number ofdirect international flights to the capital?We have discussed this with the U.S. ambas-sador, seeking to show him that flights between Brasilia and Miami, Washington,D.C., and New York would be very profit -able. There used to be flights on theseroutes in the past. Today there are five directflights a week to Lisbon, operated by TAP,and they are always full. I have no doubt thatdirect flights to the United States would also

be successful. I hope that the U.S. ambassador can help discuss this with the U.S airlines and also Brazilian companies thatoperate internationally.

How can you leverage Brasilias status as adiplomatic center to further your plans forthe city and attract investment?Having the World Cup in Brazil in 2014 willbe an important opportunity for international investors, with the construction of stadiums and rapid transport systems, for example. Of course, the economic crisis hasbeen a bit of a damper, but it should all getback to normal in a few months. I hope thatthe U.S. government sees that in addition to thetraditional investment of the World Bank andthe Inter-American Development Bank (IDB)there could be greater collaboration betweenU.S. and Brazilian companies. Sometimes iamazes me to see that major business groupsfrom Spain, Portugal, and France haveinvested in Brazil more than U.S. firms haveRight now, we have 1,700 public works projects under way in the federal district.

Jos Roberto Arruda, governor of thefederal district, sees a natural link betweenthe United States new president of change and the city that has changedBrazil. He hopes the two countries willsoon benefit from direct flights betweentheir major cities and greater collaboration

between U.S. and Brazilian companies.

Obama has changedthe profile of Americanpolitics. Brasilia haschanged the profile of Brazilian society.

Today Brasilia is preparing toreinvent itself as an economiccenter in its own right. The fed-eral government is carefullyassessing the capitals econom-ic, social, and geographicalstrengths and weaknesses, inparticular in terms of attractingforeign investment. Variouspublic companies CleanEnergy Brazil, or CEB, andEletronorte in energy, CAESB inwater and waste water, theBanco de Brasilia in finance,Brasiliatur in tourism, and theMetr rail company arelocked into the planning. Forgetheavy industry; think first of IT-based activities, biotech,and alternative energy, sectorswhere the above-average educa-tional level and presence of anexcellent university in Brasiliaare natural advantages.

To this end, the federaldistrict government signed ahalf-million dollar agreement atthe end of 2008 with the UnitedStates Trade and DevelopmentAgency (USTDA) to fund afeasibility study for the estab-lishment of a multi-sector tech-nological park in the capital.

The government also wishesto leverage Brasilias strategiclocation in the heart of Brazil.At one time flying south tonorth in Brazil meant changingplanes in Rio. But now SoPaulo serves as the major airhub for the busy southeast,while Brasilias airport connectstravelers with most of thecountrys major cities as wellas international destinations,particularly in South America.

At the same time, Brasiliahas slowly gained importanceas a potential hub for the

nations rail network slowly,because Brazil is a vast countryand constructing new railroads isexpensive. The existing rail linefrom Brasilia south to So Paulowill eventually be joined byanother line running southeast toBelo Horizonte, Rio de Janeiro,and various Atlantic ports. Andfinally, the North-South Railway,now under construction, willjoin the Brasilia-So Paulo corri-dor just west of the capital.Running through vast newfarming areas in the states of Tocantins and Gois, theconnection will constitute amajor addition to the nationalrail freight network.

But Brasilia also looks west-ward, as part of a region that isa gateway to the huge newagricultural areas of central-western Brazil. It was no coinci-dence that Mitsubishi chose tobuild a factory in the small cityof Catalo, due south of Brasilia, to manufacture thepickups and Pajero SUVs sobeloved by the nations rich soyfarmers.

Tourism also holds obviouspotential, thanks to the capitalscopious hotels, museums, andconvention facilities. AndBrasilia will most likely hostgames in the 2014 World Cup.But officials also see the federaldistrict evolving into a SouthAmerican financial center.Outsiders might view that aspi-ration as a long shot; bankshave for years been driftingaway from Rio and BuenosAires and congregating in SoPaulo. However, as theBrazilian capital approaches 50,the yes-we-can spirit of itsfounder still reigns supreme.

Founding FatherBrasilia began as a vision inthe mind of one man

Juscelino Kubitscheck (1902-76), who served as presidentof Brazil from 1956 to 1961.Born the son of a travelingsalesman, JK worked as aurologist and an army

aptain before coming to power with the slogan fiftyears of progress in five. The new president promisedpid industrialization and threw himself into the projectbuilding the new national capital, as well as promoting

oser links with the United States and investment inrazils nascent automobile industry. In 1964, however,e military took power and accused JK of corruption

nd receiving support from communists. The junta soonripped the ex-president of his political rights. Theontroversial Niemeyer-designed monument in his honor,hich some ideologues argue resembles a sickle, wasuilt in 1981, overlooking the city he founded.

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Q&A

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Its difficult to compete with the genius of OscarNiemeyer, but over the years Brasilia has addedsome exceptional works by other architects.The striking blue Dom Bosco Sanctuary wasdesigned by Carlos Naves, a student ofNiemeyers, and is named for an Italian priest whosupposedly prophesied in 1883 that a city wouldbe built where Brasilia now stands. More recently,the 1,200-meter-long Juscelino Kubitschek Bridge, designed by Alexandre Chan, wascompleted over Lake Parano.

ThisiconicsculpturebyBrazilianartistBrunoGiorgi(1905-93)iscalledTheCandangos ,whichis sometimesmistranslatedinEnglishasTheWarriors .It facesthe PlanaltoPalace,officeofthepresident,and honorsthepoormigrantlaborerswhobuilt Brasilia.Candango wasoriginallya pejorativetermusedbyAfricanslavesto describetheirPortuguesemasters,butitisnowthe namegenerallygiventothe laborerswhobuiltthenewcapitalandby extensiontothe cityspioneerinhabitants.ThestatuestandsinthePraados TrsPoderes(PlazaoftheThree Powers). Itrepresentsthe threebranchesof government(executive, judicial,and legislative),whosebuildingsfaceoneanotheracrosstheplaza.

rasilias TV Tower is a city landmark, andsidents love to bring their visitors to itsewing platform. Now the capital is switching

over to digital TV (to bebroadcast from a newtower) and hopes tobecome a center for thetechnology in Brazil.But the digital drive goesmuch further. Thecornerstone of thisdevelopment is theDigital CapitalTechnology Park.Located just outsideBrasilia, this 123-hectarerural site will attract IT,telecommunications,

enetic research, and other advancedchnology companies interested in

ollaborating with government agencies andniversities. Federal district officials want toeate 20,000 high-tech jobs through 2014.hey also have ongoing programs to teachasic computer literacy to the generalopulation and hope to blanket the city with

WiFi Internet.

The spectacular MetropolitanCathedral is more than justa stunning shape thestained-glass roof is aboutas different from that of anytraditional church as can beimagined. The cathedral is nowundergoing a US$10 millionrenovation sponsored byPetrobras, the state oil company.

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BRASILIADigital city

Critical MassBest businessenvironment in Brazil(World Bank 2007 ranking)

Highest income per capitain Brazil (34.510 USD)

Highest life expectancyrate (75 years)

Lowest illiteracy rate(3.4% in Brasilia)(11.1% national average)

Highest Internetconnectivity (29.7%)

Homes with waste-waterservices (90.8%)

175 embassies and26 internationalorganizations

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Lookingfromthe TVTower,downtheMonumentalAxisandtheEsplanadeof theMinistriestothe twintowersofCongressTheNationalFlagMast, seenthroughyet anotherspectacularbuilding AttorneyGeneralsOfficeTheMetropolitanCathedralInsidethecathedralAstrikingcombinationof sculptureand architecture

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What Crisis?

While the rest of the world worries about securing jobs, trade, andinvestment in the immediate weeks and months, Brasilia is busythinking about its second half century. Is this a sign of false confidence?

BRASILIALOOKS TOTHE FUTURE

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Brasilia may seem unique, but itshares one basic problem with moretraditional cities: traffic congestionand the need for mass-transitsolutions. With roughly a half millionpeople in Brasilia proper, and another2 million commuting daily fromsatellite cities up to 25 kilometersfrom the center, the snarl of cars andbuses was becoming impossible.Foreseeing the looming crisis, thefederal district started building anunderground metro in 1991.This subway system now stretches 42kilometers, with 21stations, andaverages 160,000 passengers per day.Planned expansion will take it to 29stations and 300,000 passengers perday by 2010. A dozen new trains willreduce peak waiting time from fourand a half to three minutes.But that is still not good enough.At the start of this decade, thefederal district had 500,000automobiles. Now it has1 million, and that figure is likelyto double sometime between2012 and 2014. If that sounds likea planners nightmare, consider thefollowing: The entireplano piloto (Brasilia proper) is designated as aUNESCO World Heritage Site andcovered by a preservation order.We cant create new expresswaysor arteries; we have to manage withwhat weve got. We cant evenmake streets wider, said JosGaspar de Souza, president of theBrasilia Metr. We cant do whatParis did in the 19th century, forexample, and open up new avenuesthrough the whole city.

At the same time, incredibly, Brasiliaalready faces urban decay. The W3 isa main avenue running through thecity. It was originally the primelocation for shopping and services inthe capital. But much of the bettercommerce has fled to giant glitzyshopping malls, unimagined whenBrasilia was planned in the 1950s,leaving the W3 at risk. The solution isa light-rail transit system to revitalizethe avenue, which will link up withthe metro.A further planned Metr expansionwill run the metro out to the airportin time for the 2014 World Cup, forwhich Brasilia hopes to serve as oneof the host cities.How is all this construction being paidfor? The IDB and French DevelopmentAgency are financing the light-railproject, while Brasilia Metr itself isfinancing much of the metro systemexpansion, in part with loans fromthe federal governments BrazilianDevelopment Bank (BNDES). But, saysde Souza, the metro is open toprivate investment, for exampleby combining stations and shoppingmalls. And partial privatization,such as private operation undergovernment ownership,is a future possibility.Spending can also be recouped byselling government-ownedbuildings and land next to newstations. At a planned metro stationin the satellite city of Samambaia, astrip will be left for future high-risedevelopment. Selling these lots willpay for the metro extension, deSouza says.

Eye on Metr

Jos Gasparde Souza

PresidentMetr

Valdivino Oliveira, finance secre-tary of the federal district, arguesnot: Brazil is suffering lesseconomically than most devel-oped countries, and within Brazilthe federal district is suffering lessthan most states. Our consump-tion here is driven by the greatmass of public-sector employees,who have job security andconstitutional protection againstsalary reduction. And our percapita income is very high, com-pared to the rest of the country.

Nevertheless, while the heavypublic-sector presence in the localeconomy might be welcome at thismoment of global turmoil, plan-ners see more private investmentas the way forward. Its alreadyhappening, as Brasilia graduallyshifts away from a virtually 100percent government-based econo-my. In 2008, the public sector gen-erated 62 percent of the federal

districts gross domestic product a marked decline from 67 per-cent in 1999.

The 40,000-square-meterlaboratory recently announcedby Medley, a large Brazilianpharmaceuticals company, isexactly the kind of high-tech,low-environmental-impactinvestment Brasilia is looking for.It will leverage the advantages of the capital, such as its well- edu-cated population, excellent univer-sities, available greenfield land,proximity to government agencies,and high standard of living.According to government offi-cials, Ach, another majorBrazilian pharmaceuticals labora-tory, is due to open a site in thefederal district in 2011, as is softdrinks giant PepsiCo.

Brasilia has its biggest hopes,however, pinned on IT invest-ments. Microsoft and Indian giant

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Tata already have offices in the area,either directly or via local partners.Many more such companies maybe attracted by the idea of a planneddigital city in the capital theobject of a recent agreementbetween the federal district govern-ment and the USTDA. Accordingto a statement by the USTDA,The park will offer commonservices and resources to high-tech-nology and research-and-develop-ment companies and encouragecooperation between universities,research institutions, and the privatesector. The government is lookingfor private investors to move theproject ahead.

The logistics, tourism, and dis-tribution industries also stand togain from international investment.Wal-Mart and French supermarketchain Carrefour are presentalready. Opportunities also exist incommercial and residential realestate, in part because Brazil suf-fered no real subprime lendingcrisis. Organizaes Paulo Octavio,a major local developer, recentlyinaugurated a US$100 million res-idence hotel and a US$200 millionhotel and office complex. The firmis also participating in a public-private partnership to build 8,000low-cost houses using constructiontechnology from Mexico.

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World CupMost soccer fans are dreaming of the 2010 finals in SouthAfrica. But many Brazilian city officials have their sightsset on 2014, when the worlds most-watched sportingcompetition will take place in Brazil. The final list of hostcities for 2014 has not yet been announced, but Brasilialooks certain to be among those chosen. And that meansbig-time investment in stadiums, hotels, and logistics.Brasilias Man Garrincha stadium named fora football legend will be reborn as a multi-usearena costing up to US$400 million. Other investmentsinclude plans to expand the citys metro-railsystem to the stadium.The one investment planners cant guarantee is the result:When Brazil last hosted the World Cup, in 1950, it lostthe final match 2-1 to Uruguay in the specially builtMaracan Stadium in Rio.

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DEFEATINGTHE CHALLENGEOF DISTANCE

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USAOffice1050ConnecticutAvenue,NW.10th floor,Suite1000 WashingtonDC20036-USATel+12027721090Fax+12027723101SpainOfficePaseode laCastellana,95.15Planta28046Madrid-SpainTel+34914185032Fax+34914185055www.peninsula-press.cominfo@peninsula-press.comEditor-in-ChiefStellaKlauhsRegionalDirectorRafaelMuozProjectDirectorMarieJung

ResearchDirectorGregKunstlerEditorialAssistantChristopherDalbyWriterBrianNicholsonCreativeDirectorMartaConceioPhotographyLuizFernandes,Brasilia-Tur,iStoSXC,PeninsulaPress

CAESB, Brasilias state-run water and sanitationcompany, has won awards for social andenvironmental quality. Now its seeking foreigntechnology and hopes to win favor with internationalinvestors for major projects.

FernandoRodrigues

Ferreira LeitePresident

CAESB

Whatareyourmajorchallenges?Here in the federal district we have achieved virtuallyuniversal coverage, but projections showed we would facea water shortage in 2011 or 2012. This, despite the fact thatwe have been working hard to reduce daily consumption,which is now down to 190 liters per person from around220 liters per person in 2000. We have two major water-intake projects ready to go to tender. These will practicallydouble our supply and certainly see us through the next 30years. Also, we want to offer the standard of living we haveachieved here to other regions of Brazil; some 50 millionBrazilians still lack access to good-quality water on tap.

How can foreign investors help?We plan to invest $1 billion reais through thenext three years (around US$500 million/yearat current exchange rates). Some 10 to 15 percentof this funding will come from our own resources,and another part will be loans from institutionslike the BNDES and IDB (we have a US$100 millionprogram starting now with the IDB). But we alsowant to break new ground and use a system basedon asset leasing, where a private company makesall the investment and sells us a service over,say, 15 years. It wouldnt be a traditionalpublic-private partnership. We have also triedparticipating in foreign tenders, in Mexicoand Peru, in partnership with Spanishand German companies.

Whataboutacquiringtechnology?Our policy is to constantly seek out partnerships fortechnological development and to absorb experience.Right now, we are negotiating with the governmentof Israel, because we know that Mekorot has done a lotof development in the area of reducing losses. We alsorecently signed a three-year agreement with theUniversity of Brasilia and four German universitiesin the area of water resource management.

YoucanalsosupplytechnologyCAESB has succeeded in achieving virtually 100 percentcoverage because we have developed technology thatsappropriate to the Brazilian reality in other words, itslow-cost. Now we receive delegations, mainly from Africaand South America, interested in seeing what weve done.

Q&A

Last year, the country attracted 5 millionforeign visitors who spent US$6 billion.Argentines took top place, followed by750,000 Americans. But excluding businesstravelers, only a handful of these individualsventured inland to the capital. Also, no matterhow much Brazil spruces up its hotels, cleansits fabulous beaches, and teaches cab drivers asmattering of English, the country faces onemajor and basically insurmountable problem:Its too far from the Western world. Accordingto the World Tourism Organization, 70 percent

of vacation flights are less than five hours.London to So Paulo is twice that. Truth is,were fighting for 30 percent of the market,Barretto said.

Recognizing that hard fact is an essentialstarting point when strategizing on how to pro-mote tourism. It means Brazil has to convincethe potential visitor that its worth the extrahours of discomfort on an airplane to travelthere. In 2008, the country launched a cam-paign in New York, with follow-up promo -tional events in London, Spain, Buenos Aires,

Chile, and Peru. Brasilia hopes that in additionto its well-known architectural delights, it canattract visitors interested in upscale niche inter-ests like ecotourism and bird watching; the citysits amidst the savannah of the central altiplanoand is a gateway to central-western Brazil,which is exceptionally rich in birds.

One great hope for attracting tourism toBrazil and Brasilia, in particular, is the 2014World Cup soccer competition. The month-long, 32-nation playoffs attract hordes of fans, 1 million of whom traveled to Germany

for the championship in 2006. According toorganizers, the final match in Berlin betweenFrance and Italy drew a worldwide TV audi-ence of 715 million. The 2014 Cup is ourgreatest window of opportunity this century topromote Brazil, Barretto said.

Twelve Brazilian cities will host games.Brasilia plans to invest heavily in hotels andinfrastructure and will learn from Germanyhow to structure these investments so that theyhave maximum value for the local populationonce the event is over.

omoting international tourism in Brasiliavolves a two-pronged approach: First get

eople to come to Brazil, then lure them took beyond Rio, Salvador, and the Iguaualls. Together, federal and Brasiliaurism officials are trying to do just that.

We want to show the world the multiplecets of Brazil. Its a complex country thatfers various experiences, said Tourism

Minister Luiz Barretto.

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