Privatization South American Style

By Luigi Manzetti | Go to book overview
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As in Argentina, the 1989 presidential elections found Brazil in the midst of its worst socioeconomic crisis of this century, with very high inflation, the largest level of foreign debt in the world, capital flight, a large fiscal deficit, increasing poverty and income concentration, and a ballooning domestic debt. To compound matters, the political bickering between the President and Congress, coupled with mounting reports of corruption involving the Sarney administration, brought the country to the point of ungovernability. This, in turn, tarnished the image of the democratic institutions only five years after the end of the military regime ( Lamounier 1994). As in Argentina, the stage was set for the emergence of protest candidates. As it was pointed out at the time, 'people are not interested in ideologies, what they really want is something that promises to change everything, government, parties, politicians, the source of their suffering'. 1

During the electoral campaign the political atmosphere became highly polarized. After the first round two men emerged (in accordance with the 1988 Constitutional provision, if no one wins an outright majority only the two candidates with the largest number of votes are allowed to participate in a run-off). Luis Inácio (Lula) da Silva, a former metalworker and union organizer who was the undisputed leader of the Workers' party ( Partido de Trabalhadores, PT), headed the left-wing coalition. Lula's platform was quite ideologically grounded. He refused any privatization and called instead for an expanded role of government intervention in the economy. Lula also supported increases in salaries and social benefits, heavy taxes on the rich, and a moratorium on Brazil's external debt. His opponent was Fernando Collor de Mello, an obscure governor from Alagóas, one of the poorest states in the depressed north-east of Brazil. Although coming from a family well entrenched in Brazilian politics, the young (39 years of age) and flamboyant Collor was considered the long-shot underdog when he first announced his candidacy. 2 Through a subtle television campaign facilitated by the support of Brazil's largest media network ( TV Globo), Collor portrayed himself as a political outsider and skillfully exploited popular disgust with politicians. 3 Like Menem, Collor adopted a charismatic style punctuated by slogans like 'whoever steals goes to jail'. He even went so far as to describe himself as a caçador de marajás, or hunter of overpaid political appointees and bureaucrats. At the same time, in typical populist fashion, he remained ideologically


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Privatization South American Style


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