Cardosa's
Election Win in Brazil
Gives the Most Endowed Country on Earth Another
Chance
By JONATHAN POWER
WASHINGTON DC--Brazil's general election has produced the
goods--continuation of sober government, fiscally
conservative with a social conscience. With a bit of luck
Brazil's present role as the lynchpin that could make or
break the world economy will, before too long, be regarded
as an historical anomaly. Assuming--and a lot of hard work
remains to be done--they can get their act together, the
West's Group of Seven and the International Monetary Fund
will soon extend the large loan necessary to get Brazil over
the hump of the stream of dollars hemorrhaging from the
country. (A total of $50 billion is the quite mammoth loan
talked about.) To let Brazil go on sliding down the
financial chute would be to give another shove to the
cannon-balls rolling and ricocheting round the deck of the
good ship "World Economy", with the likelihood they'll
puncture first the deck and then the hull.
Fernando Henrique Cardosa's re-election in a scandal-free
open contest, with its tangible promise of further fiscal
reform, makes outside investment and aid the direct opposite
of pouring money down a rat hole, as bankers finally decided
was the case in Indonesia and Russia. Brazil could now start
to realize its quite immense potential.
Before Cardosa came to office, first as finance minister
(where he engineered policies that set in motion a drop of
inflation from 2000% per annum to around 3%), then as
president, the land of the greatest opportunity in Latin
America was going to seed, and that before it really
bloomed. Only a generation ago Brazil was a fabulous country
of bounteous promise, preparing for an economic lift-off
that could have easily by now put it within sight of being
on a par with the U.S. and Canada. Observers classed Brazil
in the same league as Taiwan. Between them, they shared the
honours of being the fastest-growing economy of the
century.
But Brazil abjured the high road, took the low and became
a wastrel. While Taiwan continued to pull ahead, its
economic motor purring, its social problems reasonably in
hand, Brazil had minimal economic growth, high inflation and
unemployment and mass impoverishment of the peasantry. Its
political ruling class, its army heirarchy and upper
business clique were at best short-sighted, at worst riven
by corruption. In the late 1980s it elected a Kennedy-type
figure, Fernando Collor de Mello, who was going to bring new
life-- economic growth, land reform and political vitality.
In the end he bequeathed none of the above and was forced to
resign following a public accusation of financial
impropriety made by his brother.
Until Cardosa came along, Brazil in its modern history
appeared to have managed to marry the worst of feudalism
with the worst of capitalism, each feeding off the other's
less worthy characteristics. It was a terrible fusion that
created an explosion of social disintegration. Brazil's
dispossessed peasantry, burgeoning shanty towns, soaring
crime rate and growing numbers of abandoned street urchins,
regarded by the police and vigilantes as no better than
stray dogs, was the consequence.
Fundamentally, it has been the same Brazil all along; the
people do not change. It is all a question of leadership.
The country was like a sleeping princess, awaiting the frog
who after the kiss would turn into the prince. It is a
mighty nation of vast dimensions, with a population of 160
million. It is bounded by the steamy, timber-rich tropical
rain forest of the Amazon river to the north and the cool,
temperate, magnificent prairies to the south. No other
country in the world offers such geographic contrasts nor,
probably, such an abundance of raw materials and raw
opportunities.
Brazil, until recently, always lived its fantasy.
Copacabana beach, the carnival and the samba were not just
tourist brochure concoctions. They were Brazil as it really
was--the archetypal relaxed, tolerant and gregarious
society. A country that has not gone to war since 1870. A
country that, revolted by a miscarriage of justice,
abolished capital punishment in 1885. A country that, though
its black population was poor and undereducated, never had
Jim Crow laws. If you made it in Brazil, you could marry
whom you pleased and live where you liked. In short, this
country had all the potential to be one of the great pillars
of civilization in the 21st. century.
Now Cardoso has the mandate he needs--a convincing first
round win. He can start to trim the government payroll with
its wages that are quite disproportionate compared to the
private sector; he can tackle the ludicrous state pension
system that over-compensates people who retire in the prime
of life. He can push forward with land reform that if done
well could liberate the energies and potential of millions
of peasants. A successful rounded economic reform program
will make Brazil again a country that investors willingly
flock to, and make it one of the giants of the 21st. century
too.
Such is the contagion of the present international
financial crisis, saving Brazil will mean also saving Latin
America, indeed perhaps even saving the Western world
itself, from a thirties type great depression. Both Brazil
and western governments have a lot riding on the good result
of this election. It should mark the country's turnaround
and, indeed, if the western powers (including the U.S.
Congress) can pull together, mark where the rot in the
world's greatest financial crisis for fifty years was
finally brought to a stop.
October 7, 1998,
WASHINGTON DC
Copyright © 1998 By JONATHAN POWER
Note: I can be reached by phone +44 385 351172
and e-mail: JonatPower@aol.com
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