ITAGUAI, BRAZIL — ThyssenKrupp's towering steel factory going up near Rio de Janeiro resembles a medieval cathedral -- and stands as a latter-day shrine to the belief that Brazil's economy will withstand U.S. financial turmoil.
Brazil's stocks and currency whipsawed wildly last week along with U.S. markets, recalling the gyrations that preceded financial crises in the 1990s when meltdowns in Mexico, Russia and Thailand sucked this country's economy down with them.
But as the U.S. financial system seemed to teeter on collapse, few here seemed too concerned. Like other emerging countries that learned the bitter lessons of the 1990s, Brazil's economy is much stronger this time around, more diversified and better able to withstand global shocks -- including the economic ups and downs of its powerful neighbor to the north.
President Luiz Inacio Lula da Silva in fact felt confident enough Friday to take a few pokes at the United States, saying in effect that in terms of financial crises, the shoe is on the other -- meaning American -- foot.
"A few years ago, if the United States coughed, Brazil got pneumonia," Lula said at a gathering in the northern city of Mossoro. "Now we have diversified, we don't depend so much on one or two countries. . . . Ask [President] Bush about the crisis because it's his, not mine."
Brazil's growing appeal to investors from around the world is a convincing endorsement of his confidence.
In addition to Germany's ThyssenKrupp, two other international steel companies, Baosteel of China and Dongkuk of South Korea, are building multibillion-dollar steel plants in partnership with Brazilian iron ore producer Vale. They are investing to produce steel for export to Asian markets -- but also to supply Brazilian manufacturers struggling to meet accelerating domestic demand for motor vehicles, appliances, housing and public works.
They are at the vanguard of foreign companies rushing in to position themselves for what many see as a structural change in Brazil's economy. That change, already underway, centers on the emergence of a middle class, booming consumption and reduced poverty.
Amid last week's market panic, for example, Hyundai of South Korea, Suzuki of Japan, Whirlpool and Sheraton Hotels of the United States each announced new large-scale projects or expansions here. Chinese, Portuguese and Scandinavian wood pulp manufacturers are all contemplating major factories.
