Ludwig Bellows for Brazilian Aid

Daniel K. Ludwig, one of the world's wealthiest industrialists, recently appealed for-or rather demanded-financial assistance from the Brazilian government. In a harshly worded 17-page letter, Ludwig warned the government that if aid was not forthcoming, he would suspend his controversial timber project in the Javri region of the Brazilian Amazon (Multinational Monitor, May, 1980).

Ludwig has invested over U.S.$600 million since 1967 in his forestry operations, kaolin processing plant and rice fields at Jari. At present, he says he cannot continue with such outlays of funds, and has called on the Brazilian government to foot $5.5 million annually in housing and other social services for the 30,000 people who live and work on his lands.

"If the government is not able to attend to Jari's legitimate solicitations for aid, our situation, then, is hopeless," Ludwig wrote, promising a gradual "paralysis" of the Jari project.

The letter raised a storm of protest from government officials and the Brazilian press, largely because of its bullying tone. "The government doesn't operate under threats," said Cesar Cals, Minister of Industry and Commerce.

Brazilians also resented the very suggestion that the country owed Ludwig assistance, particularly because Ludwig continually boasted of his ability to finance his project himself, and has used his vast wealth to exercise extraordinary power in the Jari region.

The respected Brazilian daily, Journal do Brazil, expressed this commonly held view in a recent editorial: "The risko is his, for good or bad ... If Jari fails, this is a problem for Mr. Ludwig's own personal economy. And the Brazilian state cannot and should not finance Mr. Ludwig's risks."

The Brazilian government initially dismissed Ludwig's demands. "The government is not going to invest its resources to save any projects," said Octavio Bonfim, spokesperson for the Presidential Palace, soon after the letter was made public.

Currently, however, Brazil is giving Ludwig more consideration. At presstime, late October, the National Security Council was discussing the matter in great detail.

The outcome is in doubt. The Jari project is one of Brazil's largest employers, and it earns more foreign exchange than any other enterprise in the Amazon region. Brazilian observers fear that if the government refuses to meet Ludwig's demands, it will risk alienating other foreign investors and bankers. It is a risk most Brazilian officials feel the country can ill afford, given its present debt of more than $50 billion.