Debt and Democracy in Brazil

...Sarney, by contrast, had been a stalwart supporter of the military regime throughout most of his 30-year career in public life...

...Tancredo had wrought magic by ousting the 20-year-old military regime from within, convincing a majority of the indirectly elected Electoral College tohandhimandhis opposition party the national reins in January 1985...

...The PDT has attempted to broaden its appeal by identifying itself with the recent success of the Socialist parties in Western Europe, yet continues to be seen as mostly a political machine for the ambitious governor of the state of Rio de Janeiro, Leonel Bri-zola, and has scant support elsewhere in Brazil...

...Tancredo alone, with his vast experience and enormous popularity, bolstered by the dramatic street demonstrations for Diretas Ja (Direct Elections Now) in 1984, could command a consensus sufficient to confront Brazil's massive troubles—or so the logic went in political circles here...

...He also began renegotiating the terms of Brazil's external debt with foreign—largely American, of course—bankers and the IMF, winning a 90-day reprieve on part of the $ 16 billion in interest alonedue in 1985...

...Under the administration of previous President Joao Figu-eiredo, these had soared to an annual inflation rate of about 260 per cent, external debts of $100 billion (among the world's highest), an internal public debt of $20 billion (about one tenth of the entire gross national product), and falling agricultural and industrial production...

...It would leave to private sector leaders the chore of trying to resolve private strikes, like the bitter walkout in April and May of hundreds of thousands of Sao Paulo metalworkers, led by radical labor leader Luis Inacio de Silva...

...The government will indemnify current owners of redistributed parcels through a formula now being devised...

...Meanwhile, a blizzard of political reforms swirled through the nation's Congress at a pace that surprised even some members of the government, and a sheaf of additional proposals emerged from the President's office at the Palacio de Planalto...

...The new law would permit public sector strikes, which are now illegal, such as the ones that have broken out involving the postal service, transportation, schools, and hospitals...

...In the difficult weeks of Tancredo's hospitalization this impression seemed to be confirmed...

...in other words, without any consensus...

...Especially in the light of the concern many had that Jose Sarney would simply serve as a caretaker figure until direct presidential elections could be held a few years down the road, his performance thus far has been impressive...

...They included the introduction of direct elections for municipalities in 1986, and for president in 1988—actually the latter date remains subject to doubt, given a raging debate on the timing of the elections for Sarney's successor...

...Yet just as land reform could prove a Pandora's box, the democratic institutions being put into place could produce a paralysis as they allow the deep, longstanding divisions within the Brazilian body politic to be aired for the first time in 20 years...

...This convention, assured of acceptance from the moment Sarney's request became public, will be charged with writing a thoroughly new constitution for Brazil, erasing once and for all the rigid 1969 constitution imposed by the military government of General Costa e Silva...

...Whether the new government will ultimately master the twin challenge of debt and democratization, however, may depend on long-term political developments only beginning to take shape...

...Then there are the truly Leftist forces to contend with—the Workers' Party (PT), the Democratic Workers' Party (PDT), and the two Communist parties...

...Tancredo had carefully picked a balanced cabinet of moderates, Center-Left politicians and a few outright conservatives: His clear intention was to reassure all sectors of opinion while instituting decisive political changes and implementing a relatively mild austerity designed to deal with Brazil's gigantic trade and financial problems...

...He had switched loyalties in 1984, gallantly joining the opposition after military-backed candidate Paulo Salim MaluFs election seemed assured...

...Labor Minister Almir Pazzianotti has sought approval of a new law governing strikes, in a partial attempt to cope with the more than 40 major walkouts that have hit private and public enterprises since April...

...Sarney eschewed nearly every decision, prompting complaints that Brazil's government had become a "ship without a rudder...

...In addition, the government urged a special $1.5 billion expenditure to shore up the economy and living conditions in the drought-ridden, traditionally neglected Northeast region, where recent flash-floods did not improve the agricultural situation but did leave three quarters of a million residents homeless...

...The government Tancredo Neves boosted into power, and whose course Sarney is trying hard to maintain, drew its unity from general opposition to the military regime that preceded it, rather than from a single shared vision of the Brazilian society that would follow...

...By late May Sarney's ministers had gone farther, embracing social policies and calling for deep-seated changes that are likely to provoke controversy...

...At present, 1 percentofBrazil'sland-owners control 45 per cent of the total cultivatable land, a situation that has persisted since colonial latifundia, or large estates, were created...

...Alliances between these and other political formations have provoked vivid discussion, but no solid proposals have surfaced to date...

...The present majority in Congress that is supporting Sarney's government, for example, consists essentially of the Center-Left Party of the Brazilian Democratic Movement (PMDB), formerly the main opposition group, and the Liberal Front Party (PFL), made up largely of traditional conservatives who, a la the President, swung over to the opposition primarily to end military rule...

...For the moment, though, the potential of the Leftists remains an unknown...

...Brazil's status as a new and troubled democracy, plus its obvious inability to fund interest and amortization payments for this year from a projected trade surplus of merely $11 billion, had bought time to seek new terms and an extended payback period...

...But the fervent opposition of powerful landowners to such reforms may eventually provide the first serious test of Sarney's administration...

...conservative politician from the Northeast state of Maranhao...

...The radical Sao Paulo metal workers who form the bulk of the PT's membership have earned the scorn of moderates across the country for their usual hardline stance, exhibited during the April and May strikes...

...Finance Minister Francisco Dornelles moved to control price hikes in key sectors, limit future budget increases, and revise taxes that hindered production...

...They will have a chance to play an active role under the democratized rules of a new constitution...

...Should these parties gain support from industrial or agrarian workers in the 1986 constitutional convention elections, taking votes away from the dominant PMDB in the process, Sarney's hope of strengthening the Center-Left coalition forged by Tancredo Neves would be threatened...

...Indeed, the path to substantive political progress and economic recovery seems to be opening up: In early June, the news that the May inflation had fallen to 7.8 per cent (on a monthly basis) raised everyone's spirits...

...The Communists are considered fringe groups with little influence, although pundits are quick to point out that the Communist Party received 10 per cent of the votes in 1946, its last appearance on the ballot...

...The minimum wage was nearly doubled, raising some eyebrows despite the fact that this still left real wages lagging behind the past decade's inflation...

...Creating such a vision, and winning support for it through the democratic process now falling into place, are therefore the critical tasks facing Brazil's responsible leaders...

...Sarney aims to increase the equity of the landhold-ing system and improve agricultural production—thought to be impeded by existing circumstances—through the distribution of land to at least 7 million peasants...

...Perhaps most important, Sarney asked Congress to convene a new constitutional convention in 1987, and hold elections for its members in the fall of 1986...

...Once the congressional leadership forged by Tancredo and a weary, reform-hungry public signaled their willingness to stand behind Sarney, though, things began to happen...

...The first steps, having been major planks of Tancredo's campaign, enjoyed a high degree of political consensus...

...Sarney himself became the main proponent of the reforms, on the stump and on television...

...Sarney has boldly tackled land reform, too, a thorny issue throughout Latin America that even fairly unscrupulous Left-wing regimes have found themselves incapable of handling...

...But the PFL and the PMDB hold fundamentally different views on Brazil's future...

...and the legalization of "clandestine" Leftist parties—notably the Brazilian Communist Party and its Maoist cousin, the Communist Party of Brazil...

...SARNEY'STWIN CHALLENGE Debt and Democracy in Brazil bybrianlzimbler Rio de Janeiro President Jose Sarney's government, in office only since this past March 15, is off to a flying start: Brazil is coming to new terms with its foreign creditors and the International Monetary Fund (IMF), inflation is down, and popular enthusiasm is running high for the planned reforms that will dismantle the authoritarian machinery employed by the country's military rulers during the last two decades...

...Theshift proved enough toearnhim the vice presidency alongside Tancredo...

...Nonetheless, democratization could ultimately bring the long-repressed Left to the fore in national politics, which would jeopardize the moderate economic policies Brazil's international creditors so strongly favor...

...Or democratization might simply result in a variety of forces competing for power in a manner that leaves the course of national policy unsteady, if heavily debated...

...The new Brazilian government intends to implement the Land Statute of the mid-1960s, passed by the military rulers of the time but never put into effect, with the help of additional legislation...

...Following the game plan sketchily outlined by Tancredo, Sarney's government began to tackle the economic mess it had inherited...

...revision of the laws that had restricted the activities and organization of political groups within Congress...

...When the less-than-charismatic Vice President Sarney took over, initially as acting president and then formally as president, most observers did not expect agreat deal...

...the extension of voting rights to the illiterate...

...it did not affect the public's perception of him as a somewhat bland, essentially Brian L. Zimbler, a previous contributor to the NL, is at present a Rotary International scholar studying Brazilian politics in Rio de Janeiro...

...The big landowners have traditionally dominated politics in such key regions as the South and the Northeast, whose support Sarney will need to secure the passage of other economic and political measures designed to restructure the country...

...It took him several weeks to exert real authority even after Tancredo died, partly because the nation lay near-prostrate with grief and partly because of his own doubts about his ability to do the job...

...On the face of things, the Nova Republica appears to have surmounted both the early shock of transition to civilian rule and the added tremors caused by the death on April 21 of much-mourned President-elect Tancredo Neves, who never recovered from an operation to remove an intestinal tumor performed shortly before he was to be inaugurated...

...That document contains such unpopular authoritarian provisions as Institutional Act Number 5, granting the government almost unlimited police powers...