This post is the English translation of a conversation with Diego D’ermoggine on Brazil, drawing ispiration from his recent post about internationalization. Diego with his humanistic culture and his juridical training, dedicated his professional life to enterprise development and marketing. He also had several experiences abroad and the most important is tied to Brazil where he lived for several years and still visiting pretty often. Today Diego helps Italian enterprises through the not easy way to Brazilian markets being also in charge for the international relationships for CEBRASSE (the Brazilian Confederation of the Services Sector he participated in founding). He is also one of the founders of the MUSEU A CEU’ ABERTO, an innovative international culture and art association. (translation by Marianna B.)
AB: Diego, how did your intercourse with Brazil start? DDE: In 1996 I went for the first time to Sao Paolo, to deliver (along with Consiel and in collaboration with the FIA-USP) an expertize on marketing innovation for TELESP which, at the time, was the monopolist telephone company in the state of San Paolo; later on, during the privatizations era, the company was acquired by Telefonica. In 1999 I moved to San Paolo as managing director of CONSIEL DO BRASIL, following its start up. Thereafter I opened my own consulting company, BRASIL MEETING POINTS, collaborating also with the organization of big exhibits with MUSEU A CéU ABERTO, a public association; with them in the years we have realised many cultural initiatives: from the great exhibit on Calabria’s Masterpieces, to the Leonardo’s machines exhibit, from the show dedicated to the beauty of the Michelangelo’s sculptures to the livornese painter Amedeo Modigliani, from the great Spanish painters up to the exhibit about Carlo Levi and so on. I had been residing in San Paolo up until 2006 when I came back to Italy, still following on many projects and thus keeping close relations with Brazil and frequently visiting the country.
AB: What was the country shape at the time, both from a business point of view and a social one? What were the most evident evolving patterns ? DDE: In 1996 Brazil was just at the beginning of the big transformation which led it in a few years to be one of the eminent economical powers in the world. Fernando Henrique Cardoso set the main premises for the development to come, thanks to some key reforms realised during his presidency: a stable and strong currency; the opening of the market (though at the same time strongly controlled); foreign investments attraction; the Banco Central / Central Bank) independence; investments in infrastructures; investments in education; social politics to release wide portions of the population from poverty (more than thirty millions of people passed from class E to the class D or C in the last ten years); the law on fiscal responsibility for public administrators; currency rigid politicies along with a rigid inflation control. We have seen the positive effects during the years and Lula himself, Cardoso’s successor, has picked up political results of this great efforts, without altering their underlying basics. Even Dilma Rousseff’s present presidency is proceeding on the same path.
AB: I know you regard “ the Brazilian miracle” as having deep historical and political roots and dating farther past Lula’s years. Can you expand on your point of view? DDE: Answering your previous question I quoted some economical, social and political deeds, whose premises had been set up by Fernando Henrique Cardoso. Lula’s ability consisted in not overturning the good things done by his predecessor but emphasising at most the social component of such political action. The Brazilian miracle is not a leap of faith but the result of contemplate politics, planned and carried on by a ruling class of great quality. We have a very well prepared ruling class with an average quite elevated instruction level and an average age of about 40/45 years with great leadership.
AB: In opposition with the enthusiastic and shallow opinions of many regarding THE rapid developement of the country, you have developed a very strict point of view about the concrete menaces to the country prosperity, Can you explain your point of view? DDE: Definitely, the corruption of a part of the politicians is one of Brazil main problems, causing the indiscriminate rise of public spending: it seems that the country is not paying adequate attention to the issue. One of the consequences to the Real devaluation is prices increase, having negative repercussions on the already slowing-down development process. Also violence lacks adequate responses bearing heavy consequences on the investments and life quality …
AB: In recent years italian perspective on Brazil was totally overturned: today even the Brazilians with Italian origines regard us with a strange paternalistic attitude and – at the same time – proud admiration for their origins. Is it so? DDE: In 1996 I first discovered the existence of a “first world” and me being – as Italian – a part of it. Nowadays, from an economical point of view, this mind-set has changed. In my opinion the difference between Brazilians with an Italian origin as opposed to the rest has an emotional connotation, but it has not any relevant social consequences. Undoubtedly Brazil and Italy could take more advantages from a big potential basin of 30 million italian descendants. Unfortunately in Brazil like in the rest of the world Italian foreign trade iniziatives are feeble, lacking coherence and coordination between companies and institutions. Just think about tourism: there is no sense in France attracting more than a thousand times Brazilian tourists a year than Italy! There is so much more we can do.
AB: You are very determined explaining to Italian businessmen that investing in Brazil is complicated and risky. So often, at the beginning, the project is undervalued. Brazil is a complex country and under many aspects more advanced than imagined … DDE: For sure. Brazilian banking system – for example – is far more advanced than the Italian one: electronic money transfers occur at real time rate; checks compensation is completed in 24 hours, services quality is excellent; 80% of the clients use internet banking. Moreover, the Brazilian “Correios” (the National Mail) delivers daily mail in 24 hours, in a country of continental extension. Some public institutions are excellent: for example the Brazilian diplomatic school is considered one of the best in the world and FAO’s General Secretary and the WTO’s new Director are Brazilian. Unfortunately most of Italian businessmen are affected by the so-called “bar-on-the-beach syndrome”; they think that doing business in Brazil is a sort of anarchical promenade. It isn’t so. Quoting Antonio Carlos Jobim, “Brazil is not for amateurs”: it offers great opportunities but also great risks; doing business requires respect, humility and it is highly reccomendable to trust experts and reliable specialists.
AB: Can you summerize three bullet-points to undertake an investment project in Brazil? Which are in your opinion the most interesting opportunities? DDE: 1. First of all, study the market and plan your actions, times and resources sufficient to sustain a long perspective. 2. Avoid the “do it yourself” attitude and rely on expert consultants that know the market. 3. Pay extreme attention in chosing the managers who will run the business. Opportunities are cross and plenty: from high-tech to industrial machinery; from franchising networks to tourism; from quality food to free time there are a lot of opportunities to succeed in such a big country.
AB: Can you report a success-case and a failure that are paradigmatic in your opinion? DDE: It’s hard to pick from many (and even renown) cases … A famous food industry (I will avoid names) is an example of success: it established form the beginning a very well planned inziative and now Brazil represents its second market world-wide. On the other side an emblematic case of failure, in my opinion, is a motorbikes producer which has sold not even a motorcycle because of the bad choice of his local partner; it all ended up in a painful controversy with Brazilian customs!
AB: Among the vast and interesting initiatives you promoted during these years I want to remind the first Modigliani exhibition ever held in Brazil and Leonardo’s casts show: they were two clamorous debuts in South America for the Italian culture! But there is more coming up, right? DDE: I’m working on a very interesting exhibit on Giuseppe Garibaldi, a character who ideally connects Italy and Brazil, and an exhibition on Francis of Assisi.
AB: Imagine Brazil in 5 years; what do you see? DDE: I see a better country on account of people social awakening and a better consciousness on civil rights. I see a less violent country. A country more aware of its role in the world. A country where I would like to go back and live, again.
AB: Rio de Janeiro and San Paulo in two words, from your point of view. DDE: I like this question … I love these two cities. They are two metropolis in the modern world. They represents – altogether – Brazil in all of its folds: natural beauty and business, oceans and skyscrapers, music and arts, great solidarity. Dionysus and Apollo in a tropical sauce. One and unique.
AB: thank you Diego.
1. the Municipal Theatre of Sao Paulo. Sao Paulo in a year hosts more than 5.000 theatre shows and has ten of the best Universities in Brazil. Cultural life and identity is one of the propellers of the present development phase.