SAO PAULO (Reuters) - If Brazil’s business leaders could vote in Venezuela’s election next month, they would cast their ballots for Hugo Chavez’s political heir, acting president Nicolas Maduro.
They never supported the anti-capitalist bluster of Chavez, who died of cancer last month, but they hope to hold on to lucrative contracts for food exports and construction projects that he signed with Brazil’s former leftist leader Luiz Inacio Lula da Silva and his successor, Dilma Rousseff.
“In the near term, a Maduro win would be best,” said Jose Augusto de Castro, head of Brazil’s Foreign Trade Association.
Brazil, the world’s seventh largest economy, has emerged as regional powerbroker in Latin America with moderate center-left policies that it hopes can influence more stridently left-wing neighbors such as Venezuela.
With Brazil’s economy slowing to a crawl, the last thing its entrepreneurs want to do is forfeit growing markets.
Over the past decade, Brazil’s exports to Venezuela soared by 533 percent to some $5 billion, making it Brazil’s second largest market in Latin America after Argentina, both major buyers of Brazilian manufactured goods. Economists say Brazil’s investments in Venezuela are around $20 billion.
Venezuela, an oil producing nation that imports some 70 percent of its food, is now the third largest consumer of Brazilian beef and an important buyer of its chicken.
Key infrastructure projects launched during the 14 years of Chavez’s government, from the Caracas metro expansion to bridges across the Orinoco river that divides Venezuela, are run by Brazilian firms like Odebrecht.
Polls ahead of Venezuela’s April 14 election should relieve Brazilians with commercial interests there. One independent survey shows Maduro, who as Chavez’s former foreign minister is already known in Brazil, with a 14.4 percent lead over his opponent, Henrique Capriles.
“Many see his election as favorable to Brazil’s presence in Venezuela,” said Pedro Silva Barros, an economist at Brazil’s Institute for Applied Economic Research (IPEA) in Caracas.
“Businesses are working with this scenario.”
Chavez’s close ties with Lula protected Brazilian firms from Venezuela’s frequent nationalizations, foreign exchange controls and barriers to repatriating profits that scared competitors out of the oil producing OPEC nation.
“We have a good relationship with Venezuela and Chavez’s death should not harm business there,” said Ricardo Santin, market director at Brazil’s Poultry Union.
Odebrecht’s presence is so strong that Chavez even joked that he had tried to convert the firm’s president to socialism. The company has 8,000 employees in Venezuela, with nine projects, including a 2.15 megawatt dam in the Amazon.
Andrade Gutierrez, another Brazilian construction firm, has its largest project on the continent in Venezuela: a $3.8 billion steel plant.
While businesses from other countries see Venezuela as a hostile environment, the willingness of Brazilian companies to do business there can be explained in part by the backing they get from Brazil’s state BNDES development bank, which absorbs part of the risk by providing financing for projects.
Despite the close ties, Chavez’s death has generated some uncertainty for deals that haven’t been finalized yet.
In his last visit to Brazil in July 2012, Chavez bought six E-190 planes from Embraer for $271 million. The option for Embraer to sell an additional 14 planes for $630 million is still up in the air.
The most ambitious uncompleted project is the Abreu e Lima oil refinery in northeast Brazil. Eight years after Chavez and Lula signed off on the project to symbolize their alliance, Venezuela’s state-run PDVSA still hasn’t put up the 40 percent financing promised to Brazil’s Petrobras.
Some in Brazil’s business community say Maduro lacks the charisma needed to take the relationship to the next level and close such deals. They expect Maduro to basically continue Chavez’s policies, to the benefit of Brazil.
“If you look at the economic returns, a Maduro victory would - in theory - be better for Brazil,” said foreign trade lobbyist de Castro.
Writing by Caroline Stauffer; Editing by Anthony Boadle and Andrew Hay