SAO PAULO, BRAZIL -- In the early years following World War II, Brazil and Japan shared a vision.
They would join forces, linking Latin America's biggest nation with Asia's most dynamic one in what seemed to be an ideal economic match. Brazil had the iron ore and other raw materials to fuel Japan's industrial boom. Japan had the technical know-how and management skills to develop large-scale mining and shipping enterprises in Brazil.
By the 1960s, the dream appeared well within reach. Hundreds of Japanese firms invested in ambitious projects -- some to channel pulp, aluminum and steel back to the Orient, others to cash in on a potentially large local market by selling consumer goods.
A special lure for Japanese companies was the presence in Sao Paulo, the heartland of Brazil's growing industrial and agricultural might, of the largest single concentration of Japanese immigrants and their descendants. These expatriates would be the bridge, it was thought, between Japan and Brazil and a convenient source of labor for Japanese multinationals getting established here.
But these hopes of a generation ago are fading, set back by business failures, cultural clashes and diverging patterns of development. While substantial Japanese interests remain in Brazil, few here talk anymore about formation of a powerful Asian-Latin axis. Its failure to take shape highlights some of the obstacles to Third World development and some of the limits to easy growth of the global economy.
In times of tension with the United States, as at present, Brazilian officials still like to threaten their American counterparts with the Japan card. "They use Japan as a club against us all the time, threatening to go with the Japanese if we don't do what they want," said a U.S. diplomat.
Some Brazilians remain convinced that their country is central to Japan's long-range strategy, particularly as a base from which Japanese multinationals can export to the rest of the Americas.
But these days, Japanese investors share with American ones concern about Brazil's political confusion and economic uncertainty. Many Japanese firms have postponed investments in Brazil, spending their strong yen on U.S. and Southeast Asian ventures.
"Foreign investors are all thinking the same way about Brazil," said Toshiro Kobayashi, general manager for the Bank of Tokyo in Brazil. "For the time being, the Japanese are waiting and seeing like everyone else."
Japanese bank regulators have been even tougher on Brazil than U.S. officials, deciding in September to downgrade bank loans in the face of Brazil's moratorium on commercial debt payments. Moreover, Japan has yet to give solid assurances that Brazil will receive a share of the $30 billion in new money announced for debtor nations earlier this year.
It is little wonder that Japan and Brazil have had their problems. Located on opposite sides of the globe, the two cultures are worlds apart.
"The Japanese are reserved, private and reflective; the Brazilians are talkative, extroverted and expressive," explained Tizuka Yamazaki, a film director in Rio de Janeiro whose grandparents emigrated from Japan in the early 1900s. "The Japanese are cautious and patient; the Brazilians emotional and impulsive."
Japan's formula for business success -- consensus and team effort -- goes nowhere in a Brazilian environment short of trained workers and accustomed to disorder, interruption and top-down management.
"Japan is a well-structured, well-instructed society; Brazil is an erratic one," said Paulo Yokota, a Brazilian with Japanese parents who has negotiated numerous Brazilian-Japanese deals. "In Japan, if you change the leader once a project starts, the project team will continue to work; in Brazil, if the leader dies, no one knows what to do and eventually the project changes entirely."
Also unsettling for Japanese businessmen have been Brazil's chronic inflation and the monopolistic structure of much of Brazilian industry. Seeking greater security, some investors entered partnerships with the state. But they, too, ended up disappointed. "Many Japanese believed in the government here as they believe in their own," said Yuichi Tsukamoto, a director of Sharp of Brazil, an electronics manufacturer. "They put their money in public-sector projects that have functioned poorly."
To bridge the gap between Oriental and Latin ways, Japanese firms had counted on the immigrants and their descendants. The first 799 Japanese reached Brazil by ship in 1908. They were the start of a massive migration in several waves, spanning half a century. It was encouraged by policies of the time: Japan's population control, U.S. restriction of Asian immigration and Brazil's recruitment of plantation workers.
Most who came were peasants. They labored initially on plantations in Sao Paulo State. Eventually, they bought their own farms, becoming a driving force in Brazil's development as a major agricultural exporter. Their offspring account for much of the nation's harvest, especially in tea, strawberries, potatoes, soybeans and tomatoes.
The immigrants and their descendants -- referred to loosely as the "Japanese colony" -- are estimated to number 900,000 or more. Most have integrated into Brazilian society, excelling in a variety of fields. But some oldtimers hold fast to traditional ways, preserving customs hard to find even in modern-day Japan.
For Japanese firms in Brazil, the colony has at times proved to be more hindrance than help. Its presence has lulled some Japanese executives into a false sense of home, insulating them from the rest of Brazilian society with Japanese restaurants, stores and newspapers.
About 200 Japanese-capital firms are reported to have failed in Brazil over the past few decades. About 300 have survived, and many of them are doing well despite the stumbling blocks. They are present in most business sectors, with chemicals and passenger cars being notable exceptions. Collectively, they constitute the second largest foreign investment group in Brazil after that from the United States.
"Japanese companies want to go the course in Brazil," said Toshiro Yamada, president of National, a maker of TV sets, audio equipment, appliances and batteries that is owned by Japan's Matsushita. "We don't stop the project until we succeed. We must succeed here."
Japanese immigration began tapering off 25 years ago. Since then, the international market also has changed, affecting the relative importance of Brazil for Japan. The two economies are no longer the complements they appeared to be several decades ago. Brazil's raw materials play less of a role in Japan's industrial mix, which is more oriented toward high-technology fields.
But a certain sentimentality continues to underlie Japan's attitude, and Brazil remains hopeful of working out new deals with its old Asian partner, possibly in such pioneering areas as biotechnology or the development of high-tech mineral alloys.