June 9 (Bloomberg) -- Brazilian soccer player Jose Carlos Garcia Leal said he was shocked when Rio de Janeiro's Botafogo soccer club made him an offer late last year that topped the$60,000 a month he was making in Japan. Garcia, known to his fans as Ze Carlos , had left Brazil three years earlier because salaries in the localleague were a fraction of those overseas. Now, a five-year rally inthe real is giving Brazilian teams the purchasing power to lureback record numbers of players from abroad. ``It's a dream come true,'' Garcia, a 27-year-old midfielder, saidafter a rain-soaked practice in Rio. ``My salary is great. And thepeople here are priceless. In Japan, they don't have the same joy.They won't even let you hug them'' after scoring a goal, he said. Garcia's situation and the real's appreciation highlight Brazil'stransformation from the edge of default to a global financial powerfunded by record commodity prices. The currency has gained 117percent against the dollar, 44 percent versus the euro and 91percent versus the yen since 2003, when President Luiz Inacio Lula da Silva took office. The world's biggest exporter of beef,Brazilian Coffee, orange juice and sugar became a net creditor forthe first time in January, earned an investment-grade rating fromStandard & Poor's in April and holds so many dollars that itplans to create a sovereign-wealth fund to invest in companies andassets outside Brazil. The country owns $149.1 billion of U.S.government debt, up from $10.7 billion at the start ofA little more than a decade after Brazil sold Brady bonds - - namedafter former U.S. Treasury Secretary Nicholas Brady , who orchestrated a restructuring plan for emerging-market nations-- cash-flush consumers in Latin America's biggest economy arebuying up everything from Louis Vuitton bags to Norwegian codfish as the real's rise makes foreign goodsmore affordable. Imports reached a record $141 billion in the 12 months ended May31, a 40 percent increase from $101 billion a year earlier andtriple the $47 billion from two years ago. Trade Deficit The downside to the surge in imports is that Brazil's current account , the broadest measure of trade, fell into deficit this year forthe first time since 2003. The shortfall reached $14.7 billion inthe 12 months through April, reversing a $13.9 billion surplus inthe year-earlier period. ``The deterioration of the current account inspires caution,'' said Marcelo Carvalho , an economist at Morgan Stanley in Sao Paulo. ``It happened veryquickly.'' Carvalho predicts the deficit will swell to $25 billion byyear-end, draining dollars from the country and ending the real'srally. He forecasts the currency, now trading near a nine-year highat 1.6310 per dollar, will weaken to 1.7 by year- end. The medianforecast in a Bloomberg survey of 19 economists is for the real toslide to 1.75 by December. Tide Turns Currency devaluations and hyperinflation in the past two decadeshad made Brazilian soccer talent cheap for international teams.Powerhouses such as Manchester United in the U.K. and Spain's RealMadrid combed soccer youth leagues in Brazil, a record five-timeWorld Cup winner whose flash and style is known across the world as``o jogo bonito,'' or ``the beautiful game.'' More than 500 Brazilian players a year on average signed contractswith foreign teams since 1989, according to the Brazilian SoccerConfederation. Brazil's four best-known stars - - Kaka, the 2007FIFA player of the year; Ronaldinho, a two-time FIFA player of theyear; Robinho; and Ronaldo -- are under contract with Europeanteams. Now, the tide is turning. Brazilian teams signed 403 players fromoverseas in the first five months of 2008, a 33 percent increasefrom the same period last year, according to the Brazilian SoccerConfederation. Garcia's $60,000-a-month paycheck in Japan was worth 162,000 reaiswhen he arrived in Osaka in early 2005. Today that salary would beworth 97,584 reais. Contracts are typically denominated in dollars. Flamengo Lures Ronaldo Ronaldo , a three-time FIFA player of the year who was born Ronaldo Luis Nazario de Lima , told Brazil's TV Globo in May that he plans on signing with Botafogo's rival team,Flamengo, after his contract with AC Milan expires this month. ACMilan paid him $21 million a year, according to Forbes magazine.Forbes estimates the 31-year-old striker, who is recovering fromknee surgery, has a net worth of $250 million. ``I'm choosing a new path for my life,'' Ronaldo, the all- timeleading goal scorer in World Cup history, said in the interviewwith TV Globo. ``I know that the doors at Flamengo will be openwhen I'm well and playing again.'' Spokesmen for Ronaldo, Flamengo and AC Milan declined to commentwhen contacted by Bloomberg News. Cafu , a 38-year-old defender who played on Brazil's last four World Cupteams, may return from Italy, where he spent six seasons with ACMilan and Roma. Cafu is in talks with Santos , the team in Sao Paulo state that signed 15-year-old Pele in 1956,according to Luis Antonio Capella, the team's soccer director. `Spontaneous' The import boom is evident outside Botafogo's practice facility inRio. On a recent afternoon, the parking lot was lined with theplayers' foreign-made cars, such as a BMW X3, Jeep Grand Cherokeeand Toyota Land Cruiser. Garcia says his salary goes further in Brazil than it did in Japan,where he longed for Brazilian barbecue and cheese bread. One of hisfirst lessons in Japan was that physical contact is kept to aminimum. When he tried to hug teammates during a game, aninterpreter told him that kind of contact was frowned upon. ``I thought that was strange,'' Garcia says, laughing. ``Theyaren't spontaneous at all. I missed that about Brazilians.'' To contact the reporters on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net Last Updated: June 9, 2008 08:20 EDT
