When the Spanish bank Santander bought the debt-ridden, state-owned Banespa Bank in São Paulo, it was another indicator the Spaniards were re-conquering the New World.
Only this time, they’re buying it.
In the last few years the Brazilian economy has fattened up with investments –- and renewed interest –- from Spanish companies. Spain is now the second-largest foreign investor in Brazil after the United States.
Though Spanish companies invest almost $4 billion less than U.S. companies, their investments are 20 times more than they were in 1995. Spanish companies invested $20.4 billion this year in Brazilian ventures while U.S. investments totaled $23.9 billion, according to the Spanish Council of Commerce in Brazil.
Still, Spain is way ahead of Holland, which is in third place with investments totaling $8.8 billion. France is next on the list with $7.8 billion and Portugal at $7 billion.
The Spanish invested only $251 million in 1995.
These Spanish companies, which have popped up in every sector in Brazil, see room for growth, whereas their home country is witnessing “shakeouts” such as those occurring in the U.S. dot-com world.
Santander bought Banespa for $4 billion and became the fourth largest bank in Brazil.
The Spanish phone company Telefónica de España dominates the telecommunications industry in the country. Spain’s energy supplier Endesa Iberdrola is the top provider in several Brazilian states.
Foreign investors are “banking on long-term growth because in 10 or 15 years, they will grow in spite of recessions,” said Jesús Orejas, a spokesman for the Spanish embassy in Buenos Aires.
Telefónica bought several phone operators, including São Paulo’s Telesp, and is now the biggest private investor in Brazil.
It’s well known throughout the country that Telefónica’s investments have allowed for more Brazilians to have their own phone lines. (Telefónica is the parent company of Terra Lycos, which owns Wired News).
“In early 2001 there will be more than two million new phone lines in São Paulo,” said Fernando Xavier Ferreira, president of a Telefónica group in Brazil.
Most lines will be installed for households with little money, Ferreira said.
But Spain is apparently not the only country attempting to re-conquer South America.
Portugal, which only has a population of 10 million, has become the third largest foreign investor in Brazil, which has a population of 170 million.
Perhaps in an attempt to compete with Spain’s Telefónica, Portugal Telecom recently purchased Telesp Celular –- the operator of the cellular phone system in São Paulo.
Mario Cristina de Sousa, Portugal’s Economic Minister, says there will be Portuguese investments in Brazil’s tourism industry. The Portuguese economy “has reached maturity and needs to expand,” de Sousa said.
“Brazil appears to be a unique opportunity for us –- with good chance for growth and privatization,” de Sousa said.