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Brazil Cardoso: Stability and Reform



Cardoso: Stability and Reform

Uniquely among modern Brazilian presidents, Cardoso, a donnish ex-academic from Sao Paulo, proved able and effective. Ironically, before he became a politician he was one of the world's most respected left-wing theorists of economic development. His political career, however, has moved along a different track, as his government has opened up the Brazilian economy and pushed through important political reforms.

Cardoso entered office with a clear vision of Brazil's economic and political problems, and how to cure them. On the economic front, he has built on the Plano Real by pushing through a privatization programme in the teeth of fierce nationalist opposition, cutting tariff barriers, opening up the economy to competition and making Brazil the dominant member of Mercosul , a regional trade organization which also includes Argentina, Uruguay and Paraguay, with Bolivia and Chile in the queue to join. During his first term the result was healthy growth, falling unemployment and low inflation, an achievement without precedent in modern Brazilian history.

Politically, he steered a skilful middle course between dinosaurs of right and left, corrupt caudilhos and their patron-client politics on the one hand, and time-warped nationalists still clinging to protectionism and suspicious of the outside world on the other. In a steady, if unspectacular process, a series of constitutional amendments were passed reducing the role of the state and reforming the political system.

The stabilization of the economy that Cardoso achieved through the Plano Real was not forgotten by the poor, who were the most affected by hyperinflation; Cardoso was re-elected in 1998, providing a much needed period of political stability at the top. His second term proved more difficult, however. The Asian financial collapse of 1998 brought down much of Latin America with it, including Brazil; there was a sharp recession for a year, although the economy proved much more resilient than most expected and resumed its upward trend in 1999. Most importantly, despite the substantial devaluation of the real in early 1999, inflation remained low, an important break with the economic patterns of the 1980s and 1990s, and a sign that some at least of Cardoso's reforms were working.

Cardoso's legacy is not all positive, however. Corruption and social inequality still plague Brazil, although there are signs that public impatience is being reflected in a newly aggressive and powerful federal prosecutors system which is starting to take on powerful vested interests. Cardoso's reliance on a broad centrist coalition has limited his ability to deal with rural inequalities or really get to grips with environmental issues, and the public finances are perennially in deficit because of a bloated public sector pensions system which is extraordinarily resistant to reform, not least because among those who benefit from it most directly are members of congress and the judiciary. The judicial system itself is a joke, which is much more of a problem than it seems: it underlies the frightening level of violence in Brazilian society, since those using it know they will almost certainly not be brought to book, and it also encourages corruption, for the same reason.

In the countryside, the Movimento dos Sem Terra (MST - the landless movement), which emerged in the south of the country in the early 1990s, has become increasingly radicalized in recent years. Land invasions have become bolder and the government's response less tolerant than in the past, with many parts of the country becoming potential tinderboxes.

Nevertheless, Brazil enters the new millennium in better shape than seemed possible a decade ago. The bad press it often - and usually deservedly - gets abroad can obscure the positive side of the coin: an

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increasingly deep-rooted democracy, where people and the media were able to bring down a corrupt president, and now, finally, a relatively stable, growing economy. Cardoso is clever enough to realize that his place in history depends on reducing inequality, as well as encouraging growth. If - a big if - Brazil's politicians build on Cardoso's achievements rather than concentrate on lining their wallets, Brazilians, justly famous for their optimism, can extend it to fields other than a football pitch


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11/22/2008 3:52:24 AM