Brazil Looks to November

...Once a stringent price freeze was put into effect last February 28, the consumer price index began to fall...

...A minor caudillo from the northeastern Maranhao State, he started his career in 1950 as an assistant to the governor...

...It provided immediate advances in real income for workers and, significantly, did not freeze wages...

...Indeed, if Sarney's cronies belong to the Old Republic, so do most of his prominent opponents, including Senator Paulo Maluf, the ambitious and avaricious leader of the hard-core remnants of the PDS, and Leonel Brizola, gover-norofRiode Janeiro State and head of the nominally social democratic Democratic Labor Party (PDT...

...To sustain the momentum gained from freezing prices, therefore, Sarney and his associates now have to confront a much tougher task: They must again muster their political courage and make some hard deficit-reduction decisions, hoping that the ire of the public employees will count for less at the polls in November than the joy of the millions of Brazilians who never thought they would live to see inflation flattened...

...Thesort of debatethat stimulates broad citizen involvement in politics still seems to make many of Brazil's leaders—who govern more as appointed lords than as elected representatives—downright uncomfortable...

...But the leaders of his own party apparently had come to feel that Janio's time was up, and they took advantage of his absence from the country to grab a new face...

...He's honest...

...Much of that goes to pay unproductive employees of Brazil's vast web of money-losing state enterprises...

...The Piano Tropical was a masterful response...

...More than economics is at stake, however...

...He's got so much money he doesn't need to steal any more...

...The government has also introduced a new currency, the cruzado, by simply shaving three zeros off the old cruzeiro...

...If Sarney maintains his new-found popularity, he and his allies will probably try to preserve the personalized party system that has served them for so long, and will seek to contrive a political structure that keeps the Leftist parties and the militant United Workers' Federation in check...

...Neither Ermirio's lack of previous ties to the PTB nor his philosophy was an obstacle...

...Marco Maciel, Sarney's chief of staff, was a PDS senator until he led dissident party members in the establishment of the Liberal Front Party in 1984...

...the PDT is little more than a front for Brizola...

...Foreign Minister Roberto Costa de Abreu Sodre was a backer of the 1964 coup...

...New Leader, is currently a senior editor al Dun s Business Month...

...Sarney himself is of the old school...

...Although the PMDB maintains a majority of the portfolios, almost everyone to the Left of Center is gone from the government...

...Many of the country's leading political lights have seemingly been around forever, and the populace appears to be ready for new blood...

...Brizola's term as governor of Riode Janeiro is ending, buthe'sexpectedtoseek a seat in Congress to keep alive his hopes of occupying the presidential palace in Brasilia...

...Only the socialist-oriented Workers' Party, based in the industrial suburbs of Sao Paulo, offers the voters a definite program...

...The key to his clout, though, is the Piano Tropical, and every passing day its future becomes shakier...

...No matter that PTB warhorse Janio Quadras, now mayor of the city of Sao Paulo, already had plans to announce his candidacy for governor...

...There is no telling what can happen by November...

...Days before announcing the new plan, Sarney remade his Cabinet for the second time in 10 months...

...Historically, freezes reach their peak effectiveness after about three months, and by eight or nine months they are falling apart...

...Since his return from exile, his populist oratory has been the major fear of the Center, the Right and the generals...

...Too many present government leaders have dirty hands...

...At regular intervals—monthly for interest rates, semiannually for wages, with varying frequency for prices, up to thrice weekly for exchange rates— almost everything in the economy was "corrected" to accommodate the overall change in prices...

...The unexpected announcement of his candidacy for governor of Sao Paulo, and his pledge to run things in a businesslike way, has galvanized the state and propelled him to the top of the public opinion polls...

...Drivers looking to see t he time also see a sign advising, "It's time for work—Janio Quadros...

...His dramatic resignation from the decaying PDS in June 1984, and his recent volumes of poetry and membership in the Brazilian Academy of Arts and Sciences , have not been quite enough to completely dispel the image created by his past...

...Even with prices "frozen," deficit-induced demand is leading to substantial shortages throughout the economy and will, inevitably, lead to more illicit price rises than are already occurring...

...From 1981-84, while demand shriveled during a deep and painful recession, inflation did not even pause...

...The moment controls come off, pent-up demand is sure to trigger inflation anew, and the money the government is printing to meet its bills will fuel the fire...

...When arena, in an attempt to change its perception by the voters, was transformed into the no less unpopular Social Democratic Party (PDS), Sarney headed that as well...

...As Quadros himself had declared not long before his rival's announcement, "Political parties [in Brazil] are nothing but empty bottles that are always changing their labels...

...In a country not known for stable democracy or citizen participation, the senators and deputies shaping the new constitution will face crucial decisions concerning the governmental balance of power, the role of class-based and regional parties (both strongly disadvantaged under the current constitution), and the role of state administrations in the Federal system...

...That made it impossible to stop the inflationary spiral...

...the PTB is mostly Quadros' aging cronies...

...That Brazilians are tired of all the veterans and more impressed with the clean-cut, American-educated technocrats responsible for the Piano Tropical is perhaps best demonstrated by the fact that the most popular politician in the country these days is one Antonio Er-mirio de Moraes, a man utterly unknown on the political scene until two months ago...

...The PDS is really Maluf s personal vehicle...

...A man of little economic understanding and virtually no national political base, Sarney has suddenly emerged as Brazil's savior: He has mobilized housewives to patrol shops in search of illegal price increases, has successfully appealed to workers to oppose their unions' strike calls, and has gained widespread business support for his bold moves...

...Next November Brazilians will choose new state governors and a new Congress, whose principal task will be to write a new constitution...

...At the same time, the November election may be the swan song for an entire generation of Brazilian politicians...

...Brazilians by nature tend to elect conservatives, but the current government is far closer to its predecessor than one would expect, especially given that General Joao Figueiredo's regime enjoyed a level of popular disdain unparalleled in modern times...

...The parties' lack of coherent, identifiable doctrines is, in good part, a reflection of 20 years of military effort to keep Brazilians from dividing on ideological lines...

...Quadros, 79, has a long and colorful political history: He served as mayor and governor in the 1950s, and it was his resignation as Brazil's President in 1961 that set off the chain of events leading to military rule...

...Following years of a fairly constant "normal" monthly inflation rate of 9 per cent, consumer prices suddenly leaped 15 per cent last November, 13 per cent in December and nearly 18 per cent in January, threatening to induce panic and bring Brazil's two-year-old economic boom to a standstill...

...So I figured a freeze in July would make the government look good in November...

...This is forcing Sarney to raise his party's profile in the coalition, and the Piano Tropical helps do that too...

...In his present term, Quadros' biggest accomplishment has been the installation of slogans on the clocks along the city's avenues...

...Yet in this case, the dangers of waiting were equally clear...

...Maluf, whose campaign against Neves met massive popular opposition two years ago, has found little support in his current race for governor of Sao Paulo State, an office he occupied for four years during the dictatorship and surely would use as a launching pad for the presidency in 1988...

...As it happened, it made little difference that Ermlrio announced he was entering the race before he had the support of any party...

...President Jos6 Sarney's declaration of a "life-or-death war against inflation," made on national television when the Piano Tropicalwas announced, has changed the political constellation in Brasilia...

...Many of Sarney's current Cabinet members have similar roots...

...Economic interests may well lobby for the inclusion of measures reserving mineral exploitation and the supply of computers and software to companies having 100 per cent Brazilian investment...

...Not since the depths of the Great Depression have Brazilians heard such news...

...Over the years, the local machine moved him into the governor' s chair in the provincial capital of Sao Luis, then made him a senator in the powerless Federal Congress...

...and the PMDB has been bound together by its opposition to the dictatorship, rather than specific objectives...

...Unions are still free to negotiate pay hikes, with the constraint that employers cannot pass the cost along to consumers...

...Acting in February was risky...

...In the process, he has been transformed from a weak leader unable to keep a cabinet into a potent political force...

...For the moment, the dragons on the Left have been tamed...

...This idea has drawn strong objections from Brazilians who want the profits used for oil exploration to continue a headlong rush to energy self-sufficiency...

...In 1970, he became chairman of the military government's corrupt arena Party...

...The program's pitch to the Left masks a governmental turn to the Right...

...the possibility that he would win a multiparty election was the major reason the military refused to allow a popular vote for President in 1984...

...the PFL is a conglomeration of powerful local warlords who broke with the Figueiredo government not over the military's policies, but because of their loathing of Maluf...

...Such a government has no interest in understanding the sins of the past...

...If the Piano Tropical holds up, Sarney and his Center-Right government may dominate the outcome...

...cause it was obvious things couldn't go on the way they were," says a political scientist in Rio de Janeiro.''But I'd been telling my clients to look for a freeze around July...

...So far, its sole concrete proposal has been to use the healthy profits generated by Petrobras, the state-owned oil company, to offset the losses of Sider-bras, the government's steel holding company, and Electrobras, the electric generating company...

...I'm voting for Ermir-io," a taxi driver in the gritty Socialist bastion of Santo Andre told me...

...Internal dissent was making a mockery of Sarney's announced program of land reform and income redistribution...

...In addition, the document will set the rules for the first direct presidential election since 1960...

...Brizola's past stretches back even further: The brother-in-law of former President Joao Goulart, whom the military deposed in 1964, Brizola was governor of the southern Rio Grande do Sul State at the time of the coup...

...Aureli-ano Chaves, minister of mines and energy, served as Vice President in the last military government...

...The heart of the Sarney economic program is the abolition of monetary correction...

...The Brazilian Labor Party (PTB), recognizing his appeal, quickly gave him the top spot on its ticket...

...The major reason was "monetary correction," an innovation introduced by the generals soon after their 1964 coup...

...Long an important behind-the-scenes figure, Ermlrio de Moraes is the director of the Grupo Votorantim, Brazil's largest industrial group and the dominant force in the cement industry...

...It now appears that PMDB candidates will challenge PFL candidates in many state and local races in November...

...Where the Argentines have struggled to come to grips with the brutality and torture of their country's recent military rule, the Brazilians—except for the Catholic church—don't talk about the past...

...The connection with the ancien regime is so strong that Fernando Henrique Cardoso, a member of the PMDB and the coalition government's leader in the Senate, was driven to observe acidly that the "New Republic" is merely the "OldRepublic" in disguise...

...Distressed at having little to show for its years of lonely opposition to the military, the PMDB, which is far larger and better organized than Sarney's more conservative Liberal Front, has terminated the j oint electoral program he and Neves agreed upon in 1984...

...Al lasl, the President is out from under the shadow of Tancredo Neves, whose unexpected death in April 1985 left Sarney, recently chosen Neves' Vice President by the electoral college, the unenviable task of leading the transition from 20 years of military dictatorship to democratic government...

...Brazil's Socialist and Social Democratic parties could then come to have a major role in deciding how the largest Latin American nation will be ruled in the years ahead...

...Certainly this is true of those that will be participating in the November balloting...

...Sao Paulo's vocal industrial unions were increasingly unhappy as inflation ate away at real incomes...

...That means it will determine whether Sarney's term, now set to expire in 1990, should endin 1988, as most Brazilians have long assumed it would...

...If it fails and inflation re-surges, the strained coalition between the President's Liberal Front Party (PFL) and the Party of the Brazilian Democratic Movement (PMDB) may well fall apart altogether...

...The freeze is eminently sensible: Where an economy is as completely indexed as Brazil's, conventional anti-inflationary measures—reducing government spending, cutting money supply growth— have had no impact...

...As a consolation, Sarney named Celso Furtado, a well-known economist with strong Leftist ties, minister of culture...

...Despite some talk of privatization, the government has taken no action in that direction...

...Repeated statements to the contrary notwithstanding, the government has done nothing to rein in a domestic budget deficit expected to exceed $ 12 billion, or 5 per cent of gross national product, this year...

...I had expected a price freeze, beMarc Levinson, a previous contributor toTw...

...The nearly 2 million people who work for the Federal government and its companies, meanwhile, have a natural interest in opposing budget-cutting and constitute a well-organized force...