www.japantoday.com Saturday, February 22, 2003 at 10:00 JST

RIO DE JANEIRO — A plastic mask of Iraqi President Saddam Hussein is one of the top two hits at this year's carnival in Rio de Janeiro, industry officials said Friday.

The factory that makes the masks estimates sales of the masks will exceed 5,000 units.

A mask of Brazilian President Luiz Inacio Lula da Silva is this year's number one hit, with sales estimated at around 15,000 units.

One mask costs about 3 real, or about 80 cents, at stores selling carnival articles in the downtown area.

Shopkeepers say locals buy Saddam Hussein masks to wear and have fun with during the carnival celebrations, not to support or criticize the Iraqi leader.

"People do not buy these masks for political reasons," said factory owner Armando Valles, 77.

The Saddam Hussein mask has outsold the masks of U.S. President George W Bush and Osama bin Laden, the big hits of the carnival in 2002.

Wearing masks of locally and internationally famous people is a long-standing tradition of Rio de Janeiro's carnival festivities, which begin next Friday. (Kyodo News)

www.forbes.com Reuters, 02.20.03, 11:24 AM ET

Food  Latin America   By Teresa Cespedes LIMA, Peru, Feb 20 (Reuters) - Brazilian beer giant AmBev <AMBV4.SA>(nyse: ABV - news - people) faces an uphill battle as it squares off against Peru's Backus y Johnston <BKJi.LM><BKJa.LM>, which controls almost the entire beer market in this poor nation, analysts said. AmBev announced this week it would spend $38 million in Peru in the coming year to set up a brewer and distribution network, which would be online by the first half of 2004. "AmBev has a tough road ahead because it is entering a (country) where one brewer controls 99 percent of the market and has well developed distribution channels," Centura SAB brokerage beer analyst Gabriela Galvez told Reuters. Colombia's top brewer, Bavaria <BAV.CN>, owns 51.55 percent of Backus' common voting shares. Venezuela's Cisneros Group owns 22.3 percent, while Peruvian group Bentin has 15 percent of Backus. The rest is held by small Peruvian shareholders. Banco de Credito analyst Victor Hugo Soto said the arrival of AmBev, the world's fifth-largest brewer, in Peru could be part of a strategy designed to crack Bavaria's domination of the Andean region. "I think their idea is to approach, from Peru, Bavaria's hold in Panama, Colombia, Ecuador and Peru to be able to, at a later date, negotiate with the Colombians," Soto said. AmBev sells popular brands Brahma and Antarctica in Brazil, and also has market share in Argentina, Paraguay, Bolivia, Uruguay and Venezuela. Backus, worth an estimated $1.5 billion, reported an 83-percent jump in 2002 earnings to $62.3 million compared with the previous year. Interest in the top brewer in Peru's $400 million beer market triggered a row last year involving Backus stakeholders Bavaria, Cisneros, and fellow Venezuelan group Empresas Polar. That battle was settled in December 2002 when Polar sold its 24.6-percent stake to Bavaria, which is a partner of Cisneros in a Colombian television station, for some $568 million. According to AmBev, people in Peru -- a poor country where more than half the 27 million population lives on $1.25 or less a day -- drink an annual average of 22 liters per person, much lower than Brazil's per capita 50 liters. Backus makes top Peruvian beers Pilsen, Cristal and Cusquena, among others. "Backus' brands are well positioned and there is also the whole issue of acquired tastes," said Banco Wiese Sudameris analyst Guillermo Kaelin. "Consumers are loyal to brands and flavors ... In Peru, Corona and Heineken don't get the same reception (as Peruvian beers)," Galvez said. Analysts also said that AmBev's entry could set off a price war in a market seen as ripe for growth. AmBev head Magim Rodriguez told local newspaper Gestion this week that beer prices in Peru "were a little high for people's buying power."

www.miami.com By Andres Oppenheimer Posted on Thu, Feb. 20, 2003

SAO PAULO - Six weeks after taking office, Brazil's leftist president Luiz Inácio Lula da Silva is doing better than many had anticipated: His popularity rating is higher than ever, the media treat him like a rock star, and many people here see him as an upcoming regional leader.

But will Brazil's political euphoria last? Or will South America's most powerful country soon lapse into a crisis of unfulfilled expectations?

Judging from what I heard here, da Silva's honeymoon will last longer than the usual 100 days. But there are several factors -- including a possible U.S. war against Iraq, and growing unemployment rates -- that may soon take some of the glitz away from Latin America's first elected leftist government in decades.

First, let me give you the facts. The percentage of Brazilians who believe da Silva is doing a good job has risen to a whopping 84 percent, higher than that of any recent Brazilian president, according to separate surveys by the Vox Populi and CNT-Sensus polling firms. By comparison, da Silva was elected with 61 percent of the vote.

So far, da Silva has successfully allayed fears that he would scare off investors with his radical rhetoric of the not-so-distant past. A lifelong socialist who founded the Workers Party 22 years ago, da Silva until recently called for severing ties with international financial institutions, and not paying Brazil's foreign debts.

Perhaps seeing what has happened in neighboring Venezuela, where President Hugo Chávez's incendiary speeches against the ''oligarchy'' have triggered massive capital flight and created 2.5 million new poor, da Silva is following pretty orthodox economic policies. At the same time, he has launched a nationwide campaign to eliminate hunger, and says he is pursuing a more independent and assertive foreign policy.

''He has done very well,'' U.S. Ambassador Donna Hrinak told me in an interview, reflecting the view of most foreign diplomats in Brazil.

EFFECTS OF A WAR

On the downside, a war against Iraq could hurt Brazil, economically and politically.

Brazil still imports 15 percent of its oil, meaning that a rise in oil prices could complicate the country's efforts to

meet its foreign debt payments. In addition, a war-linked world recession would affect Brazil's exports, and further dry up foreign loans and investments. In times of uncertainty, lenders tend to stay away from emerging markets.

Politically, there is a danger of a rift with the Bush administration over a possible war with Iraq. Despite a successful first meeting in Washington with President Bush last year, da Silva -- who is as prone to shoot from the hip as his U.S. counterpart -- has already angered U.S. officials by stating that Bush is ''obsessed'' with Iraq.

On the domestic front, da Silva is facing growing opposition from the radical wing of his party. Still, he seems to be gaining more support in Congress from centrist parties than he may lose in the event of a break with the Workers Party's ultra-leftist wing.

''The fight with the radicals is excellent for Lula,'' said Fatima P. Jordao, a sociologist and consultant to several polling firms. ``It places him at the center of the political spectrum.''

POSSIBLE BACKLASH

Da Silva's biggest problem may be a possible backlash from unfulfilled expectations. While 78 percent of Brazilians expect unemployment to drop, according to the Vox Populi poll, economists say unemployment levels may actually rise. Many jobless people who had given up hope are now starting to seek work, buoyed by the country's upbeat mood. That would drive up Brazil's 12 percent unemployment rate because, like many other countries, Brazil measures its unemployment rate by the number of people who seek work.

Ambassador Hrinak is optimistic that da Silva will do well. The success or failure of the da Silva presidency will have major repercussions in all of Latin America, she says.

''If he can combine sound economic management, with effective attention to social programs, this sends a powerful message to the hemisphere,'' she said. ``And if he can't do it, then what does it say to other progressive parties about waiting 22 years to come to power? Will they actually do that?''

I agree. One of the best things that could happen to Latin America would be if other leftist parties emulated da Silva's model, and gave up violence and totalitarian utopias. Conversely, one of the worst scenarios would be if da Silva fails, and groups such as Colombia's leftist guerrillas or the radical coca growers in Bolivia use Brazil's example to argue that fighting for social justice in the political arena is a waste of time.

So let's hope that da Silva continues on his present course. I'm not terribly optimistic that he will manage to maintain his current popularity, but I'm convinced that it's in everybody's interest that he does.

news.ft.com By Jonathan Wheatley in Sa~o Paulo Published: February 16 2003 22:04 | Last Updated: February 16 2003 22:04

The owners of Gazeta Mercantil, Brazil's biggest financial daily, were close to an agreement on Sunday to sell 50 per cent of the newspaper to a Brazilian businessman, a source close to the talks said.

Under the deal, which may be announced on Monday, German Efromovich, whose interests include a shipyard and an air taxi company, would take a 50 per cent stake in Gazeta Mercantil, possibly through the formation of a new company together with Gazeta Mercantil's owners, led by Luiz Fernando Levy.

Gazeta Mercantil has long been in similar talks with Recoletos, the Spanish media group controlled by Pearson, which also owns the Financial Times. It has also held talks with Brazilian and US media companies. Negotiations are said to have foundered on the question of majority ownership.

Gazeta Mercantil has come under increasing pressure from debt in recent years. Staff have gone unpaid for months at a time, and payments to suppliers have been delayed, along with taxes and social security contributions. The company's net debt is said to be of the order of R$150 million ($41 million). Mr Efromovich is understood to have offered about R$80 million for fifty per cent of the company.

Mr Efromovich's bid may yet be challenged by Nelson Tenure, another Brazilian businessman who recently took control of Jornal do Brasil, a Rio de Janeiro-based daily. Last year Mr Tenure took over an unpaid debt owed by Gazeta Mercantil to Bank of America. He claims that Gazeta Mercantil's default on the debt gives him the right to control of the newspaper.

Consolidation of Brazil's media industry is expected to continue following the approval last year of a law allowing Brazilian and foreign companies to own up to 30 per cent of media groups. Ownership had previously been restricted to Brazilian private citizens.

Another Spanish group, Promotora de Informaciones, publisher of daily newspaper El Pais, is said to be interested in buying Brazilian assets, as are the Cisneros Group of Venezuela and Rupert Murdoch's News Corp.

www.alertnet.org 14 Feb 2003 00:00

BRASILIA (Reuters) - The United Nations Food and Agriculture Organization on Friday urged rich countries and financial markets to step up efforts to feed the world's estimated 840 million hungry people.

"We must work out how to secure the involvement of developed countries ... and how to integrate the private sector and financial markets in combating hunger," Jacques Diouf, director general of the Rome-based FAO, said during a visit to Brazil's capital.

At the present rate, it will take 150 years to get rid of world hunger, he said, urging governments to change political priorities and focus on feeding the hungry.

Diouf was in Brasilia to sign a $1-million technical aid agreement for leftist President Luiz Inacio Lula da Silva's "Zero Hunger" program.

Launched early this month in the northern state of Piaui, one of the country's poorest, some 716 families will each be given $14 to buy food in a pilot project.

"Brazil sets an example," said Diouf, adding that the FAO supported Lula's proposal to create a fund to combat world hunger and poverty.

"We shall use President Lula's proposal to establish a political and moral base for an international alliance against hunger," he said.

Brazil has the world's 9th largest economy and is rich in natural resources, but wealth distribution is among the worst in the world. Nearly one-third of the country's 170 million people live on less than $1 a day and are undernourished.

Diouf estimated that out of the world's 840 million hungry people, 799 million were in developing countries and 30 million in Central Europe and countries of the former Soviet Union. The rest were in developed countries.

He said that current aid programs were trimming the number of hungry people by 2.5 million annually.

"If this trend continues we will succeed in eliminating hunger in 2150," Diouf said.

He said that real progress will only be made when hunger becomes a political problem.