Lost in space: a military vision of Brazil in space finds itself grounded by budget realities. (Aerospace).

Alcantara's 20,000 inhabitants live solidly in the past. A collection of crumbling, colonial-era homes perched on a verdant bluff on Brazil's tropical northern coast, the town is still difficult to reach by road. A schooner from Sao Luis, across the bay, brings supplies, gossip and mall. People fish and farm to get by. Horse-drawn carts and fishing boats are the main form of transport. Cows nibble grass on an unkempt main square.

That remoteness, much like the United States' sunny but lightly populated space coast in Florida, or Russia's famed Baikonur cosmodrome in Kazakhstan, attracted Brazil's military leaders of the 1970s, who wanted to put their country at the forefront of the final frontier--space exploration. The air force expropriated 62,000 hectares of land and beaches on the thinly populated peninsula two degrees south of the equator, the planet's line of maximum surface speed, so rockets could launch with less fuel.

A giant rocket base was built a few miles from Bitterness Street--so named for the African slave trade once plied here--and Tranquility Road. Brazil was to become the first Latin American country to put its own satellites into orbit. The government laid out roads, a launch pad, control room and barracks, shooting for the stars from a tiny 17th-century town.

Twenty-two years and US$300 million later, capturing a share of the billions now spent launching commercial satellites remains wishful thinking, and the spaceport is now barely used. Although Alcantara has hosted several hundred sub-orbital rocket launches, including 36 projects for the United States, no payload from Brazil has made it into orbit.

Satellite vehicle launches in late 1997 and 1999 malfunctioned; a third failed to leave the ground. Meanwhile, the number of suppliers competing to join the effort has shrunk by two-thirds. More recently, Brazil backed out of the International Space Program after federal budget woes and foreign debt slashed spending on space.

What happened to Brazil's space industry? It got orphaned, participants say, by politics and a lack of money. "The space industry depends basically on government investment and the problem is that these investments have been scarce," says Walter Bartels, director of Brazil's Association of Space Industries. "Instead of using economic stability as a means to grant additional funding, it became the end of any investment."

Empty pockets. Ninety-five percent of the $10 million aerospace budget in 2000 went to former state aircraft maker Embraer, now the fourth-largest civil aircraft manufacturer in the world. Defense projects soaked up 4.5%. Just 0.5% ended up in the space program.

When the space industry association was founded in 1993, it attracted 30 companies interested in supplying components. Today that number is 10. "Private companies are running away from this business because the process to receive incentives takes too long, and the capital return takes even longer," says Rafael Quintanilba, an investment analyst at Banco Espirito Santo in Rio de Janeiro. "Moreover, who will want to invest in a market without clear rules? It urgently needs to be regulated."

Things should have been different. During the 1970s military boom era known as "Great Brazil," the government began building the world's longest bridge--a 14-kilometer span between Rio de Janeiro and Niteroi--and the world's largest hydroelectric dam, the 77-million-megawatt Itaipu project on the border of Brazil and Paraguay. Bulldozers pushed the Trans-Amazon Highway far into the jungle. Engineers drew up blueprints for a network of 10 nuclear power plants.

By the end of the '80s, the military predicted confidently, Brazil would join the world's space powers, too, launching Brazilian-made satellites on Brazilian-made rockets. The military thought Brazil's space program would help the inward-looking country achieve a degree of technological independence, presumably leading to homegrown computer and arms industries, nuclear plants and satellite technologies.

Starting in the early '80s, though, Brazil ran out of money, a victim of rising oil prices and a foreign debt crisis. Today the nuclear power program consists of just two plants, chunks of the Trans-Amazon are blocked by jungle and the launch pad in Alcantara is nearly abandoned.

One of the few companies still affiliated with Brazil's space industry group is Equatorial Sistemas, a 25-employee supplier of satellite propellants. "Brazil has a cheap and qualified work force, but it's all in the government's hands," says Equatorial Sistemas' 57-year-old president, Cesar Guizoni, a soft-spoken engineer. His company waited five years to sign a $1.3 million contract in December with Brazil's Space Agency. "If they don't have the political will," Guizoni says, "nothing will happen."

In the late '90s, hoping to revive the Great Brazil era, the government tried a rent-a-pad concept. Global revenues from the private launch business--not counting tens of billions of dollars from the economic impact of satellite design, construction and support--is $2 billion a year, says the U.S. Federal Aviation Administration. More than 27 satellites will be launched each year through 2011, it says.

Missing the boat. By April 2000, Brazil had agreed to allow U.S. companies and their clients to launch commercial spacecraft at Alcantara. In return, Brazil OK'd safeguards to prevent it from gaining access to the technology of its U.S. clients and passing that information on to third countries.

Asia leads the world with eight active launch pads, mostly in China, while the United States has five commercial sites and six federally operated pads. The European Space Agency operates the only other launch pad in Latin America, the Guiana Space Center in French Guiana.

What seemed to be the perfect solution--estimates at the time were that it could bring in $30 million a year--became instead a headline-making political hot potato. Leftist parties in the Congress raised their eyebrows at the limits imposed by the United States. A series of amendments were attached to the agreement, but Congress has yet to approve it.

"Brazil cannot lose the chance to jump into this market," Defense Minister Geraldo Quintao said in a defense policy seminar speech in August.

Brazil also says it cannot provide an external payload pallet, a component designed to support small experiments outside of the International Space Station program. Brazil's budget for participation in the international effort was $120 million, spending scheduled to include five additional items to be supplied. But the pallet alone costs $140 million. The country is sending a delegation to the United States to renegotiate.

Meanwhile, on Brazil's once-vaunted space coast, locals wonder what it was all for. "It is not that I don't admire all the technology put here," says Heidimar Guimaraes Marques, 74, sipping a beer in one of the city's few restaurants. "But I think that all that money could have gone to education and health, our basic needs."

Don't count on a revival soon. Brazil's poverty makes it hard for politicians to justify new investment in space. Meanwhile, the program needs at least $20 million per year, double the current funding, says Luis Carlos Moura Miranda, director of the government-run National Institute for Space Research.

True believers die hard. "I have no alternative than to be an optimist," Moura says. "I can't run this business if I don't believe in the future."