IT has been one year since an unknown politician took over the
Brazilian presidency from a deposed Fernando Collor de Mello.
Honesty and decency were Itamar Franco's most commendable
credentials. At the time, that was enough. Outraged by the
corruption and influence-peddling scandal surrounding Mr. Collor's
administration, Brazilians took to the streets, demanding the
ouster of their country's first democratically elected president
The question now is whether Mr. Franco's honesty and decency are
still enough. They have not been sufficient to beat inflation,
which was 35 percent in September, the highest since Collor
dramatically devalued the nation's currency in March 1990. By so
doing, he temporarily stemmed what was then the worst inflation in
Brazilian history. Today, monthly inflation is higher than annual
inflation in Argentina, Chile, and Mexico.
"There's apathy and disillusionment in the country after the
people participated in that popular movement to take Collor out,"
says Carlos Alberto Grana, a secretary-general of CUT, Brazil's
largest labor union. "Franco's government is like lukewarm
The rest of the population seems to agree. A recent Gallup poll
shows that Franco enjoys only a 14.5 percent approval rating, down
from 36 percent in February. But that does not match Collor's
lowest rating, 8 percent, at the end of his term.
In his year in office, Franco has appointed four different
finance ministers and unemployment has gone up to 5.6 percent
compared with the 4.6 percent unemployment rate after Collor's
first year in office. All this is in a country where half of the
150 million citizens are already living in poverty.
But Jose Andrade Vieira, minister of industry and commerce, says
there is light at the end of the tunnel. "Growth in the economy
has already begun - it's just that last year was so bad that the
improvements aren't recognized," he says. The industrial sector
grew 10 percent this year, but inflation "annuls a big part of the
benefits" that such growth brings, adds Roberto Jeha, secretary of
the Sao Paulo Federation of Industries.
Other signs that the economy is picking up include a $3 billion
increase in foreign reserves from $22 billion to $25 billion, a
reduction in interest rates for Brazilian corporate bonds, and an
increase in trade. Exports in August were $3.45 billion, up 17
percent from August 1992. …