FIVE YEARS OF THE REAL PLAN

Processed Food	Var %
Yogurt Soft Drink Beer Cheese Cookies Chicken Pork Beef Fish	90.7 88.5 65.3 53.9 50.0 43.2 33.4 29.1 4.6

Products that previously were only consumed by the middle and upper classes, such as cookies, yogurt and cheese, today are accessible to those with lower incomes.

With the increase in earnings and the maintenance of purchasing power, the worker is able to replace lower quality products, such as low quality meat, with higher grades of meat. The consumption of beef has grown 29% over the last four years, an average growth of more than 6% a year.

The Brazilian population is already well supplied in terms of basic appliances, such as stoves, radios, television sets and refrigerators. With the Real Plan, access to those goods has improved even more, a consequence of both the increase in the population’s purchasing power and the reduction in real prices, which was partly due to greater competition, both among the producers and among the merchants.

The Real Plan also provided an expansion in the supply of financing, with longer payment terms and installments fixed in Reals. As a result, the level of consumption increased not only among lower-income families, but also among the middle class.

Under the Real Plan, the growth of investments, as well as income re-distribution and access to credit for the lower income population, contributed to a significant increase in cement consumption, which was also stimulated by the phenomenon of do-it-yourself home building. The consumption increased 58%, which corresponded to an average growth of 12.2% a year between 1994 and 1998.

Basic Infrastructure	New Homes Served 1993-1997*
Water supply (general networkl)	3.96 million
Sewage (collection networkl)	2.20 million
Daily Collection of Garbage	5.27 million
Electric Leght	4.80 million
Telephone	4.04 million

The stabilization promoted by the Real Plan enabled the Government to increase investment in the social area. There was a significant growth in the percentage of new private homes provided with basic infrastructure services.

Between 1993 and 1997, significant improvements in the quality of Brazilian homes occurred: almost four million new homes were supplied with water; more than two million were provided with sewerage; and almost five million new homes gained access to electricity.

Following the implementation of the Real Plan, more than five million new homes were served by garbage collections and, until 1997, four million families had new phone lines installed.

There was a substantial fall in the price of telephone service. The fixed telephone lines, which cost an average of R$ 1,117,63 in August 1994, dropped to R$ 54,67 in June 1999, an amount that represents only 5% of the preceeding cost.

From 1994 to 1998, there was an 18% increase in the installed capacity for the generation of electricity, that is, an annual growth rate of 4.2%.

The investments expected in pipelines for 1999 in the Northeast shall be greater than the total invested up to 1995. Compared to 1998, the increment should reach 25%.

The availability of water (desalinization in the Northeast) in the period 1995-1999 was equivalent to 13.5 times the availability achieved up to 1994.