2008: The "Japan-Brazil Exchange Year" as Catalyst for Stronger Ties

Japan and Brazil established diplomatic relations in 1895 with the signing of the Treaty of Amity, Commerce and Navigation. The saga of Japanese immigration to Brazil began on April 28, 1908, when 781 migrants left Kobe on the Kasato Maru for the port of Santos in Brazil. They arrived there on June 18. Today, about 1,400,000 people of Japanese extraction live in Brazil.

The century of emigration will be celebrated in 2008 by the governments of both countries as the "Japan-Brazil Exchange Year," with events spanning everything from the economy and social frameworks to culture, the arts, academic learning, tourism and sports. The Tokyo Symphony Orchestra will perform in Brazil, baseball teams from Waseda and Keio universities will compete there, and Brazil's artistic accomplishments will be featured in Japan.

After World War II, Japan was keen to reconstruct and Brazil was rich in natural resources, and this led the two countries to form deeper ties. Beginning in 1958, the two countries promoted national projects in such areas as iron and steel manufacturing and increased soybean production. However, Brazi's debt crisis in the early 1980s put the brakes on its economy and led to a "lost decade," with prices rising at hyper-inflationary rates of more than 100% per year. This dampened Japanese investments in Brazil.

But beginning in the early 1990s Brazil launched reform measures focusing on free trade, deregulation and privatization, and its Real Plan announced at the end of 1993 brought positive results and brought inflation under control. Brazil withstood negative factors affecting other parts of the world, such as the Asian currency crisis of 1997, the Russian currency crisis of 1998, and the energy and Argentine crises of 2001. In 2004, GDP growth hit the 5% mark. Today, Brazil's economy has developed to the point where it has earned a place alongside the other growing economies of the BRICs.

Economic Potential

Brazil is the largest country in Latin America, with a landmass about 22.5 times greater than Japan and a population of more than 180 million. Its economic advantages include a rich store of natural resources, comparative proximity to European and U.S. markets, and a huge domestic market. Since the 1980s, these factors have contributed to steady industrialization in such sectors as motor vehicles, aircraft, cell phones, biotechnology, computer software development and medical devices. Brazil boasts high-tech expertise and specialized human resources in cutting-edge sectors, most notably for the development of deep-sea oil and gas fields. It is also playing a leading role in global efforts to resolve environmental issues.

These factors keep boosting Brazil's annual trade surplus. Its foreign reserves stood at US$109.5 billion at the end of March 2007, and its external debt to GDP ratio declined from 19.9% in 2004 to 8.4% in 2006. Brazil has shaken off the image of a country with massive debt and high inflation, and today attracts global admiration as one of the world's most internationally competitive centers for production and export.