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With a tropical rainstorm hammering down onto his practice in downtown Belo Horizonte, Gustavo Penna – one of Brazil’s most sought-after architects – waxes lyrical about his latest creation: the Edifício Zodíaco.

“This building is really crazy – it’s like you are stood on the bow of a ship,” he says, reaching for a pencil and sketching its sleek, curved outline onto a piece of A4 paper. “I think it looks like a flycatcher bird. Look at its pose. Its breast sticking out. It’s not cement and steel that make a building – it’s poetry.”

The recently inaugurated Edifício Zodíaco, which towers over the leafy, hillside neighbourhood of Santa Lúcia, is perhaps the most visible sign of a growing economic boom in Brazil’s third largest city; a sprawling metropolis nestled in the rolling mountains of Minas Gerais state, where each month sees a new luxury apartment block sprout from the ground.

Apartments in Penna’s 21-storey “ultra-luxo” building cost upwards of R$3m (€1.3m) and boast some of the most spectacular views in town. The Zodíaco is also reputedly the only building in Brazil to feature a car-lift that delivers well-heeled residents directly to their front doors.

“When the economic situation is good everyone does well – restaurateurs, drug traffickers, prostitutes,” jokes 60-year-old Penna at his office, an elegantly remodelled neo-classical townhouse that has been in his family since just after the city’s foundation in 1897. In fact, lots of people are doing well in today’s Belo Horizonte. Most visitors to Brazil are familiar with the breathtaking scenery of Rio de Janeiro and the financial clout of São Paulo. But greater Belo Horizonte, inhabited by around 4.9 million people, is becoming increasingly known as one of Brazil’s most important economic and cultural capitals; a city that is home to a vibrant arts scene, a growing number of top-notch restaurants and a government keen to attract overseas investment.

Belo Horizonte is the capital of Minas Gerais, a mineral-rich region of south-eastern Brazil that is the country’s third richest state and its second largest exporter. With a GDP of around €108bn in 2009 it is responsible for around 9 per cent of the country’s economy. While much of that wealth comes from mineral exports stripped from mountains outside the city, Belo Horizonte has been steadily increasing its share of the GDP as businesses and new industries flock to the city, attracted by government tax incentives and the presence of high-quality graduates from several of the country’s top universities.

In 2005 Google set up its Latin American research centre in Belo Horizonte, taking over the local firm Akwan Information Technologies, which was created by researchers from the city’s Federal University, UFMG. More and more pharmaceutical and biotech companies are also opening.“Belo Horizonte is not a tourist city like Rio de Janeiro or Fortaleza but I think our vocation is about business, about becoming a centre for financial services,” says Aguinaldo Diniz, director of Cedro Cachoeira, a regional textiles giant, and the president of Brazil’s textiles association, ABIT. “This sector is growing fast.”

“Belo Horizonte has the qualities of a big city but at the same time it still has the feel of a small city giving you a good quality of life but also a strong culturalconnection to the outside world,” says Manoela Beneti, who runs the design shop Grampo in the leafy neighbourhood of Sion.

While local artists often travel overseas for their careers, most return to their roots in Minas. “This brings great returns to the city in terms of a connection to art and culture. Their roots, my roots, are always here. This is the richest thing in Minas Gerais’ culture,” says Beneti.

Across town, in packed restaurants, offices, bars, studios, boutiques, construction firms and art galleries, signs of the “BH boom” are everywhere. “Belo Horizonte is a perfect place to live and to create art,” says Lô Borges, a legendary Brazilian composer and song-writer, during a break from rehearsals in the Ultra studios, which he describes as Belo Horizonte’s “Abbey Road”. “I spent 10 years living in Rio de Janeiro and two in São Paulo but I miss this soil, this earth. The city is going through a great moment, with talented people creating valuable things and people here are more and more interested in this art. There’s an effervescence. Shows are always packed. Our cultural life here is very rich.”

Six years ago Belo Horizonte’s airport had no international flights. Now there are regular flights to Portugal, Miami, Panama and Paris – a clear sign that the city is becoming more and more connected to foreign markets. “We have a favourable environment for foreign investment here,” says Daniel Manucci, a lawyer from the firm Manucci Advogados, which works with foreign investors in the region, and who is also president of the city’s Brazil-China Chamber of Commerce. “First, we don’t have a severe problem with violence and this is key for foreigners when they are defining their investments. We also have a very proactive government that is very interested in helping foreign and domestic companies develop their operations... and there is a very strong consumer market here in Minas Gerais.”

China has played a major role in local fortunes – Minas Gerais is a major exporter of iron ore and other minerals and has surfed Brazil’s recent commodities boom, shipping millions of tons of minerals to the East each year. But a radical overhaul of local politics and governance has also been key.

Jorge Duarte de Oliveira, director of Central Exportaminas, a government-funded trade promotion agency, traces the city’s rebirth back to 2003, when Aécio Neves, the grandson of former president Tancredo Neves, took over as state governor. Nearly eight years on, Neves has left power to become a senator and is widely touted as a future Brazilian president. Even political opponents praise his transformation of Belo Horizonte.

“The state of Minas as a whole has taken off under Aécio,” says Oliveira, citing a pioneering government management scheme which brought private-sector-style targets to the government and was masterminded by Vicente Falconi, Brazil’s leading consultancy guru and the head of the Belo Horizonte management training firm, INDG.

As well as putting Minas’ finances in order and breathing new life into the administration, Neves commissioned the architect Oscar Niemeyer to design an iconic new HQ for government ministries. The so-called Administrative City is located on the outskirts of Belo Horizonte, near the airport, and was designed to centralise government, cut costs and reduce pressure on the overdeveloped city centre.

In 2009 the financial crisis hit local exports hard – but trade picked up again last year. Helicopter companies report a 15 per cent jump in sales this year, while the city’s arts and fashion scenes have blossomed with growing government and private investment, drawing artists and designers from across the country and seeing design shops and galleries pop up across town. Belo Horizonte’s symphonic orchestra is now considered one of the best in Brazil.

Today’s Belo Horizonte is a city on the move and Trip Linhas Aéreas, a Brazilian airline carrier that last year moved its hub to the capital of Minas, is one of the companies taking advantage of the fledgling local renaissance. Government plans to remodel Belo Horizonte’s Confins international airport, and construct an “industrial airport” in order to stimulate a growing market for travelling business people, convinced the company’s directors to move their maintenance centre and hub to the region.

Using ATRs and Brazilian-made Embraer 175 jets, Trip now flies to more than 80 destinations across Brazil and recently opened new routes to Manaus in the Amazon and Salvador in the northeast. Evaristo Mascarenhas, one of Trip’s Belo Horizonte directors, says he expects his company to bring in around €535m this year, up from €144m in 2008.

“Belo Horizonte has been growing very steadily – and while we have city and state governments from different political parties, they have a very good synergy,” says Mascarenhas. Much work remains. Gustavo Penna is working on plans to revitalise the city’s downtown, including constructing the Varandão do Parque, an outdoor stage and café he hopes to erect in the municipal park. Is there enough money for such a massive project? He isn’t really sure. But 20 urgently needed new hotels are expected before the World Cup, which takes place in Brazil in 2014. While the state and city governments have been investing heavily in new roads, as part of a scheme called “Proacesso”, infrastructure remains below-par. Asked where he most recognises Belo Horizonte’s new wealth, Oliveira replies with a grin. “In the traffic jams at 18.00.”

However, with the World Cup on the way, local businessmen are upbeat about such problems being remedied. The state government recently announced its plans to build 7,000km of roads across Minas. “With the World Cup another load of infrastructure projects have been unveiled,” says 34-year-old Guilherme Kalil, a partner in local road building company Erkal Engenharia – and an avid poker player who is launching the Brazilian franchise of Bluff magazine out of his hometown. “Not long ago so many roads were being built that you couldn’t find workers.”

Penna, meanwhile, is gearing up to oversee the pre-World Cup remodelling of Belo Horizonte’s giant football stadium, the Mineirão. “People are happy,” he says. “There is lots going on.”

Garden arty

Drive 60km south from Belo Horizonte, along winding country roads, and you come to the gem of Belo Horizonte’s art scene – Inhotim.

Currently Latin America’s most talked-about art destination, the Inhotim is a mix of botanical garden and contemporary art gallery that houses 1,500 species of palm trees alongside galleries containing work by artists such as Hélio Oiticica, Matthew Barney and Brazilian photographer Miguel Rio Branco.

Opened in 2006, Inhotim is the brainchild of Bernardo Paz, a Belo Horizonte-born mining magnate. “In Brazil museums have not been investing in their collections,” says Júlia Rebouças, an assistant curator at the museum. “Here we started off with the idea of becoming a reference point.”

The real economy

After surviving almost unscathed from the 2008-09 recession, Brazil will face some challenges in 2011. Brazil’s currency, the real, has strengthened by almost 40 per cent against the dollar since the start of 2009, and consumer prices have risen by 5.9 per cent in the past year.

Since both inflation and the strong real are caused by growth, they are the kind of problems many governments elsewhere would die to have. But they cause some friction at home. Imports are cheaper than ever and industry has lost competitiveness abroad with a strong currency.

Brazil is also suffering from a shortage of qualified workers. The country needs 60,000 engineers a year, but only 32,000 get a degree each year (most of them are from mediocre private universities). It also lacks good infrastructure – ports, roads and airports can’t keep up with the GDP growth. Airports in Brazil are managed by an air-force-dominated state company infamous for the delays of renovation projects and bad management.

Part of President Rousseff’s appeal was her reputation as a tough manager who can get things done in the slow-motion environment of Brazilian bureaucracy. But despite all the problems, Brazil’s GDP is expected to grow by at least 4.5 per cent in 2011, having grown by 7.6 per cent in 2010. Not that bad.

By Raul Juste Lores, business and economics editor, ‘Folha de São Paulo’

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