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After the military dictatorship ended in 1985, Brazil went into a troubled process of re-democratization. The last military president, João Figueiredo signed a general amnesty into law and turned Geisel's distensão into a gradual abertura (the "opening" of the political system), saying that his goal was "to make this country a democracy. The hard-liners reacted to the opening with a series of terrorist bombings. An April 1981 bombing incident confirmed direct military involvement in terrorism, but Figueiredo proved too weak to punish the guilty. The incident and the regime's inaction strengthened the public's resolve to end military rule. Moreover, Figueiredo faced other significant problems, such as soaring inflation, declining productivity, and a mounting foreign debt.

Contents

Stagnation, inflation, and crisis

Political liberalization and the declining world economy contributed to Brazil's economic and social problems. In 1978 and 1980, huge strikes took place in the industrial ring around São Paulo. Protesters asserted that wage increases indexed to the inflation rate were far below an acceptable standard of living. Union leaders, including the future three-time presidential candidate and president Luís Inácio da Silva, were arrested for violation of national security laws. The International Monetary Fund (IMF) imposed a painful austerity program on Brazil. Under that program, Brazil was required to hold down wages to fight inflation. In the North, Northeast, and even in relatively prosperous Rio Grande do Sul, rural people seized unused, private land, forcing the government to create a new land reform ministry. Tension with the Roman Catholic Church, the major voice for societal change, peaked in the early 1980s with the expulsion of foreign priests involved in political and land reform issues.

To attack the soaring debt, Figueiredo's administration stressed exports — food, natural resources, automobiles, arms, clothing, shoes, even electricity — and expanded petroleum exploration by foreign companies. In foreign relations, the objective was to establish ties with any country that would contribute to Brazilian economic development. Washington was kept at a certain distance, and the North-South dialogue was emphasized.

In 1983, the economy floundered as GDP declined by 5.0%, the impact of which was accelerated by rising inflation and the failure of political leadership. Figueiredo's heart condition led to bypass surgery in the United States, removing him from control of the situation. In an impressive display, millions of Brazilians took to the streets in all the major cities demanding a direct vote (Diretas Já!) in the choice of the next president. In April 1984, Congress failed to achieve the necessary numbers to give the people their wish, and the choice was left to an electoral college. Figueiredo did not act forcefully to back a preference, so it became a scramble as candidates pursued the collegial votes.

Transitional period

In 1984, many public demonstrations were held in major Brazilian cities which made it clear that military rule could not continue. Brazilians started to demand change in the electoral system, aiming to directly elect the President (Diretas Já). As public pressure built up, the opposition Brazilian Democratic Movement Party (Partido do Movimento Democrático Brasileiro, PMDB) proposed a law to implement this change (Emenda Dante de Oliveira). As Congress was controlled by the pro-government Democratic Social Party (PDS, formerly ARENA), the law failed to pass.

Tancredo Neves of Minas Gerais, Getúlio Dornelles Vargas' minister of justice in the 1950s, and former federal deputy, senator, and prime minister seized the momentum. Neves had a reputation of honesty.

His abilities allowed him to build up an alliance between the PMDB and defectors from the (PDS) who founded the Liberal Front Party (PFL). The Democratic Alliance (Aliança Democrática) presented itself as supporting with 1984 demands for political change and end of military rule.

It presented Neves as an opposition candidate against Paulo Maluf.[1] Tancredo Neves was elected by majority vote of the Parliament on January 15, 1985.[2] However, Neves collapsed the night before his inauguration in March, and died on April 21, passing the presidency to Vice President José Sarney (president, 1985–90), long-time supporter of the military regime. The hope that 1985 would provide a quick transition to a new regime faded as Brazilians watched the turn of events in a state of shock. Like the regime changes of 1822, 1889, 1930, 1946, and 1964, the 1985 change also proved to be long and difficult.

Sarney called a National Assembly session to write a new democratic constitution. Ulysses Guimarães, who led the civilian resistance to the military rule, presided over the session.

The government proclaimed a new constitution in October 1988 and restored civil and public rights such as freedom of speech, independent Public Prosecutors (Ministério Público), economic freedom, direct and free elections and universal health system. It also decentralized government, empowering local and state governments.

As the political transition developed, the economy suffered high inflation and stagnancy.[3] Sarney tried to control inflation with many economic acts, or Plans: Plano Cruzado 1, Plano Cruzado 2, Plano Verão. All of them included government control over prices, price freezes and ultimately changing the national currency. During Sarneys's presidency, Brazil had three currency units: Cruzeiro, Cruzado and Cruzado Novo. Economic domestic troubles led to canceling payments of Brazilian International Debt in 1988. This closed international financial markets for Brazil and the economic situation worsened.

Despite the initial decrease, inflation returned higher than before economic plans, achieving 84% a month at 1990. The government's inability to deal with inflation ultimately led parties that conducted political transition to lose the 1989 elections.

Collor and Franco administrations

The first direct presidential election after 29 years was held on October 15, 1989 (first round) and November 15, 1989 (second round). Fernando Collor de Mello won the run-off election with 53% of the vote for a five-year term.[4]

Collor's agenda focused on fighting corruption in Sarney's administration and completing the transition from the 21-year military rule to civilian government. Economic changes aimed to control soaring inflation and modernization.

Although he had massive support amongst the voters, the administration had a small parliamentary base as Collor's recently founded party had few deputies and no senators and faced fierce opposition from main parties that splintered from Democratic Alliance: the Brazilian Democratic Movement Party (PMDB), Liberals (PFL), and Social Democrats (Brazilian Social Democracy Party, PSDB).

His first act was known as Plano Collor: all savings accounts and financial investment were frozen, and the national currency was changed from Cruzado Novo to Cruzeiro (NCz$1,000 = Cr$1). Plano Collor had an initial success, but after six months, it failed in its main goal as inflation accelerated again. This started to erode Collor's prestige.

President Itamar Franco (1992-1994)

Economic changes included lifting import barriers exposing local companies to international competition. Many companies went bankrupt or were sold, unemployment grew and support for the government deteriorated.

Parliamentary elections were held on October 15, 1990 and the government failed to win a reliable base in Congress and the president started to lose support.

In May 1991, Fernando Collor was accused by his brother, Pedro Collor, of corruption, by condoning an influence peddling scheme run by his campaign treasurer, Paulo César Farias. The Federal Police and Congress began an investigation soon after. Some months later, with the investigation progressing and under fire, Collor went on national television to ask for the people's support, by going out on the street and protesting against "coup" forces. On August 11, 1992, students organized by the National Student Union (União Nacional dos Estudantes - UNE), thousands of students protested on the streets against Collor. Their faces, often painted in a mixture of the colors of the flag and protest-black, lead to them being called "Caras-pintada".[5]

On August 26, 1992, the final congressional inquiry report was released, where it was proven that Fernando Collor had personal expenses paid for by money raised by Paulo César Farias through his influence peddling scheme. Impeachment proceedings were installed in the lower house of congress on September 29, 1992. Collor was impeached, and subsequently removed from office by a vote of 441 for and 38 votes against.[6] Fernando Collor resigned his term in office just before the Brazilian Senate was to vote for his impeachment. The senate did so anyway, suspending his political rights for eight years.

His vice-president, Itamar Franco, assumed the presidency for the remainder of Collor's term.

Franco moved away from Collor and made arrangements for a National Coalition Government including main leaders from PMDB, PFL, and PSDB. Franco appointed Fernando Henrique Cardoso as Minister of Treasury and gave him the responsibility to control inflation - the average annual inflation rate from 1990 to 1995 was 764%.

Cardoso put together a successful stabilization program, Plano Real, that brought inflation to 6% year. Franco's approval ratings rose and he supported Cardoso to succeed him.

In the October 3, 1994 presidential elections, Fernando Henrique Cardoso, was elected with 54% of the votes.

Cardoso administration

President Fernando Henrique Cardoso (1995-2002)

Fernando Henrique Cardoso started his first term in January 1, 1995 and was reelected in 1998. President Cardoso sought to establish the basis for long-term stability and growth and to reduce Brazil's extreme socioeconomic imbalances. His proposals to Congress included constitutional amendments to open the Brazilian economy to greater foreign investment and to implement sweeping reforms - including social security, government administration, and taxation - to reduce excessive public sector spending and improve government efficiency.

His government is credited with providing economic stability to a country marred by years of hyperinflation. At the same time the Mexican, 1997 East Asian, 1998 Russian and 1999-2002 Argentinian economic crises diminished the prospects for economic growth during his presidency.

It was also during his administration that many state-owned companies were privatized, and agencies created for the first time to regulate many sectors of industry (energy, oil, aviation, etc.)

Cardoso's administration also placed a strong focus on external affairs. In addition to acceding to the WTO and participating in the Uruguay Round, Brazil participated in the INTERFET peacekeeping mission to East Timor.

Lula administration

President Luíz Inácio Lula da Silva (2003-)

In 2002, Luiz Inácio Lula da Silva, of the PT (Workers' Party), won the presidency with more than 60% of the national vote. In the first months of his mandate, inflation rose perilously, reflecting the markets' uncertainty about the government's monetary policy. However, the markets' confidence in the government was promptly regained as Lula chose not to interfere with the Central Bank's task of keeping inflation down. Since then, the country underwent considerable economic growth and employment expansion. On the other hand, Lula's mainstream economic policies disappointed his most radical leftist allies, making it harder to obtain a majority in the Parliament.

In 2005, Roberto Jefferson, chairman of the Brazilian Labour Party (PTB), was implicated in a bribery case. As a Parliamentary Commission of Inquiry was set up, Jefferson accused some MPs of being paid monthly stipends to vote for government-backed legislation. Later, in August of the same year, after further investigation, campaign manager Duda Mendonça admitted that he had used illegal undeclared money to finance the PT electoral victory of 2002. The money in both cases was found to have originated from private sources as well as the advertising budget of state-owned enterprises headed by political appointees, both laundered through an advertising agency. The collection of these incidents was dubbed the Mensalão scandal. As of 2007, criminal proceedings are still underway.[7]

The loss of support resulting from these scandals was outweighed by the president's popularity among many voters of the lower classes, whose income per capita was raised as a consequence of both higher employment and government social welfare programs. The stable and solid economic situation of the country, which Brazil had not experienced in the last 20 years, with fast growth in production both for internal consumers and exportation as well as a soft but noticeable decrease in social inequality, may also partially explain the high popularity of Lula's administration even after the scandals of corruption involving important politicians. Hence, Lula's re-election in 2006. After almost winning in the first round, Lula won the run-off against Geraldo Alckmin of the PSDB (Brazilian Social Democracy Party), by a 20 million vote margin.

Following Lula's second victory, his approval ratings started to rise again, fueled by the continuity of the economical and social achievements obtained during the first term to a record of 80%, the highest for a Brazilian president since the end of the military regime. The focus of Lula's second term have been to further stimulate the economy by investments in infrastructure and measures to expand the domestic credit to producers, industry, commerce and consumers alike. The highest obstacle to these initiatives have been the ongoing worldwide financial crisis, which have been threatening business opportunities inside and outside Brazil.

Another mark of Lula´s second term have been his efforts to expand Brazil's political influence worldwide, specially after G20 (from which Brazil and other emerging economies participate) replaced the G8 as the main world forum of discussions. Just like his predecessor, he is an active defender of the Reform of the United Nations Security Council, as Brazil is one of the four nations (the others being Germany, India and Japan) officially coveting a permanent seat in the council. Lula is also notorious for seeing himself as a negotiator, not an ideologue. Managing to befriend leaders of opposing countries like Presidents George W. Bush and his successor Barack Obama from the United States and Venezuelan leader Hugo Chavez, sometimes acting as middleman between them. Other controversial leaders in good terms with him include Cuban former president Fidel Castro, President of Bolivia Evo Morales, and recently, he received the visit of Iranian President Mahmoud Ahmadinejad, fueling protests inside and outside the country due to Ahmadinejad's polemical anti-Semitic statements.

References

  1. ^ Waisman, Carlos Horacio (2005). Spanish and Latin American Transitions to Democracy. p. 173.  
  2. ^ Freire, Paulo; Donaldo Pereira Macedo (1996). Letters to Cristina. p. 251.  
  3. ^ The Hyperinflation in Brazil, 1980-1994
  4. ^ Solingen, Etel (1998). Regional Orders at Century's Dawn. p. 147.  
  5. ^ Rezende, Tatiana Matos UNE 70 Anos: "Fora Collor: o grito da juventude cara-pintada" União Nacional dos Estudantes. Retrieved August 17, 2007.
  6. ^ Lattman-Weltman, Fernando. September 29, 1992: Collor's Impeachment(Portuguese) Fundação Getúlio Vargas. Retrieved August 17, 2007.
  7. ^ Folha Online: STF opens criminal action
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