On March 31, Brazil commemorated the first anniversary of a national movement that has restored the country to the path of democracy and responsible government. These deep political changes began with the ouster of the left-leaning regime of ex-President Joao Goulart and the election of President Humberto de Alencar Castello Branco by the Brazilian National Congress. Brazil found its destiny once more. Hope that once seemed dead was rekindled in the hearts of the Brazilian people.
The national movement originated in widespread public dissatisfaction with a course that had been forced upon the country. Goals included the establishment of a true democratic government and a sound and responsible administrative system, plus restoration of financial solvency and international credit. Happily, the revolution was not marred by bloodshed. A lightning victory was made possible by the weight of public opinion. The people demanded that the profiteers be punished, the country purged of corrupt electoral practices, and that far-reaching structural reforms be undertaken in politics, administration, agriculture, education, and finance. This is being done. Eighty million people living in one of the richest countries in the world are achieving freedom and prosperity that were mere promises until recently.
Having terminated the Communist threat, the government of President Humberto de Alencar Castello Branco turned its attention to pressing economic problems. A financial stabilization and economic development program was drafted and implementation has begun. Rampant inflation was a major challenge. The government adopted stern measures aimed at reducing the huge deficit in the balance of international payments. These measures included (1) rescheduling of the payments on foreign debts, (2) liberalization of the foreign exchange policy, and (3) development of international trade. Internal causes of inflation were also studied and action taken to check them. The costly subsidies for oil and wheat imports were abolished, discipline was brought to bear in budgetary practices, unsound fiscal policies were corrected, unproductive government expenses were reduced, new sources of revenue were tapped, and the proceeds were channeled into the solution of such problems as housing and social welfare.
After trimming its personnel not only of undesirable subversive elements but also of unproductive political appointees, the government adjusted the salaries of its employees to help them cope with the rising cost of living. Since then the government has consistently refused to employ more personnel or to grant further salary raises so as not to enlarge the payroll and heap an extra burden on the Treasury.
Long-Term Fight
Obviously, quick and miraculous results cannot be expected in the difficult struggle against rampant inflation. It is impossible to achieve economic stability in a few months or even a year, no matter what stern measures are adopted and faithfully adhered to. But the fight is on and inflation is gradually losing momentum. The rate of inflationary growth has been reduced noticeably and the government expects to bring it well under control this year.
This is the first step toward the accomplishment of the ultimate goal of economic development. In a country like Brazil, in which the labor force increases by 800,000 a year and underemployment is endemic, economic development is a major objective. The rate of growth of the national product fell from 7 to 2 per cent in the last three years. Taking into account the population increase, the rate of growth was negative. With this in mind, the Brazilian government is taking stern measures to increase power output, construct highways and railways, strengthen basic industries, boost food production, improve educational and sanitary conditions, and modernize agricultural techniques, etc. It goes without saying that national capital is not sufficient for the implementation of such a comprehensive program. Participation of foreign capital is therefore essential and welcome. The Brazilian National Congress has passed a new law regarding foreign investments and remittance of dividends abroad, doing away with several restrictions in the previous law.
Private Help
A substantial amount of assistance is coming from international organizations. Two missions from the Inter-American Development Bank have visited Brazil to study the possibilities of immediate financing. The Alliance for Progress has sent its highest representatives to consider the development program of the Brazilian government and to determine the amount of financial assistance required. The International Bank for Reconstruction and Development and the International Monetary Fund have recognized the tremendous efforts of the Brazilian government to solve its problems, and are expected to cooperate in the huge task ahead: to promote stability and economic development in one of the 10 largest and most populous countries in the world.
Recognition of the importance of a prosperous Brazil to the future of the free world has not been limited to international agencies. Aware of the deep structural changes brought about by the government of President Castello Branco—encompassing the fields of political institutions, sound administrative practice, social reform, full guarantee of individual liberties, and abolition of discriminatory measures against foreign capital—both domestic and foreign enterprises are enthusiastically participating in the new development drive.
Sufficient Power
Foreign government have resumed loans to private concerns and new private inventory are taking advantage of the immense and varied opportunities offered by the huge and always expanding Brazilian market.
Brazilian Foreign Minister Vasco Leitao da Cunha, in a recent speech delivered before the U.S. Foreign Trade Council, warned that "deeply mistaken are those who think that the revolution of last March was made in order to prevent social reforms or to place power in the hands of the armed forces." This is not true, he said, adding that the revolution was made "on behalf of democracy, on behalf of the economic and financial recovery of the country as the true basis for the application of an extensive social program —to sum up, on behalf of reforms to which the present administration in Brazil is committed."
He added: "President Humberto Castello Branco had hardly been inaugurated in April (1964) when he stated his purpose to press for the introduction of reform in the Brazilian social structure, for this is favored by the majority of our people, that wants to see the country renewed, socially more just and economically more advanced. The National Congress, which had rejected the pretended reforms requested by Mr. Joao Goulart, is giving President Castello Branco powers to carry out the process of modernization of Brazil that will mark an epoch in the history of my country. We are overcoming the dilemma of left versus right and facing the dilemma of backwardness against modernization. In this regard, let there be no doubt either in Brazil or in the community of friendly countries. We want a full line increase in the domestic market for our rapidly growing population. We are not resigned to the condition of many millions of Brazilians throughout the interior of the country, whom the social guarantees and the benefits of civilization have not yet reached. We want to have systems of social security extended to all Brazilians, for the quality of an administration is measured by the extent and efficiency of social guarantees available to the largest number among the population. We want industries; we want new agricultural methods; we want roads, technological and scientific development, electric power, atoms for peace, schools, hospitals, housing and social comfort."
Democratic Loyalty
Addressing the 19th General Assembly of the United Nations, the Brazilian Foreign Minister said: "The cornerstone of both our international and national policies is the fullest possible exercise of our right to self-determination, by means of which the Brazilian people made a basic choice-which they uphold-that of spiritual and political loyalty to the system of representative democracy."
The President of the Republic in a recent speech defined the governing lines of Brazil's foreign policy as follows:
"We should not shape our attitude on the basis of a homespun Machiavellism or on a policy of extortion. On the other hand, we should not give a priori support to the attitudes assumed by any of the great powers -not even by those powers which form the bulwark of the Western world—for, in the foreign policy of the latter, a distinction must be drawn between the fundamental interests of the preservation of the Western system and the specific interests of a great power. In short, a foreign policy is independent in the sense that the policy of a sovereign state must perforce be so. An independent foreign policy in a world increasingly characterized by the interdependence of problems and interests means that Brazil must have its own way of thinking and its own course of action, without subordination to any interest external to Brazil. The interests of Brazil coincide in many cases and in widening circles with that of Latin America, of the American continent, and of the Western community. Acting independently we shall not fear to lend our solidarity to other nations. Within the context of this independence and this solidarity, our foreign policy will be active, timely, and adjusted to the conditions of our times and the problem of our day."
Regarding Africa and Asia, Brazil's purpose is not trade alone, the President also said. "Every element is present for brotherly cooperation and a broad understanding between Brazil and the peoples who have just recently attained their freedom and are prepared to maintain it. Cooperation, understanding, and harmony of interests—this is what we see, with all countries and all peoples, with all due respect for the hierarchies compatible with national interests."