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Brazil: A President's Story

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The Brazilian presidential inauguration falls on March 15. In 1985, our country awaited that date with unusual anticipation, for it represented the end of 20 long years of authoritarianism. The original justification for military rule had been to correct the imperfect realization of democratic values, not to displace them. As it turned out, a vast difference separated the reality expressed in words and the raw experience of history.

Marshal Humberto de Alencar Castello Branco, the first of the five generals to govern Brazil during those decades, warned his hard-line critics, "It is easy to start a revolution; the hard part is leaving it behind."

The Brazilian people have always tended toward patriotic complacency. For decades, Brazil believed that the country’s destiny was to be crisis-free. "The future belongs to Brazil" was the motto that inspired our confidence. "God is Brazilian" and "Nobody can hold Brazil back" were common sayings that fueled the hopes for a great future.

Suddenly, caught up in the worldwide oil crisis of the mid-1970s, Brazil came to understand that it was no different from any other nation. The Brazilian miracle was floundering; the future we had hoped for never arrived. If God were indeed a Brazilian, we suspected that He must have been vacationing on the day of the 1982 World Cup finals. We lost to Italy.

From tremendous self-confidence we plummeted to something close to despair. A political crisis, a social crisis, an economic crisis, a moral crisis. Unemployment, urban violence, a colossal foreign debt, an extremely serious social situation with alarming indices of absolute poverty. We entered the worst recession in our history. Our financial reserves dwindled to nothing; in New York and London our checks were not accepted. Our production decreased, and a policy of salary cuts convulsed the country. We witnessed the beginnings of gang warfare in the cities and guerrilla activity in the countryside. No one could see the way out.

But we are a country full of surprises, and the unexpected happened. At last, in 1985, a coalition of political forces came together with the objective of installing a civilian government under the presidency of Tancredo Neves, a skilled politician. That coalition averted any possible military opposition, mobilized public opinion and succeeded in uniting the country under the seductive banner of change and reconciliation. In this new coalition, I represented a group of liberals who had broken with the old order and had joined others to end the regime of force and implant a state of law.

The end of the tunnel came into view; politicians set aside old grudges and came together to walk into the light. More than half of the government party broke away and joined Tancredo Neves, ensuring the end of the military regime. Our coalition included all segments of society and all political views. Society, a force so little recognized, took charge of events. Change became the magic word; "Muda Brasil" was the cry from north to south.

Tancredo Neves was the man History had prepared for this task. He was firm, but smooth; obstinate, but with a great sense of realism. He was a man of vast experience and had lived Brazilian politics intensely. He had friends and contacts, and inspired trust in all areas—among the military, the clergy, the politicians. He threatened no one. His project was the future—to rebuild institutions and reconstruct the economy, using a conservative and ecumenical viewpoint, without rancor, armed only with conciliation.

He personified a feeling, a hope, and a hope with a fixed date for its realization: March 15, 1985, when he would be inaugurated as president of the republic. Civilians would return to power; the long-awaited dreams were about to come true, "Muda Brasil." It was to be a national celebration.

II

A pitiful deception. Near the stroke of midnight, March 14, Tancredo Neves was admitted to a hospital in Brasília and carried into the operating room, surrounded by doctors and politicians, each bewildered in his own concerns. The great change, just as it was about to begin, turned into complete frustration. Fate had woven a plot that no novelist could have written with such dramatic impact.

The foreign delegations were already assembling in Brasília. The public festivities were ready to begin, the people had taken to the streets to celebrate, fireworks were lighting up our skies. And in that cold hospital room, a team of doctors began to operate on the man who had spent his whole life preparing to be president. At that moment, a long martyrdom began for Tancredo, and for Brazil, which for 37 days accompanied his calvary.

My own quandary began at that moment. I was the vice-president-elect. In all countries the vice-presidency is a public office that is considered the political equivalent of the elephants’ graveyard, where mammoths die quietly after a long public career. The vice-president only functions in moments of crisis; otherwise, he appears at funerals and baptisms. He is usually looked upon with distrust by the president, who senses that his running mate would not mind if some bad luck hit him. A popular comedian in Brazil performed a skit for a whole year that always ended with the same questions: "Have you ever seen a street named after a vice-president?" "Does anyone ever name a child after the vice-president?"

I prepared to be a discreet and circumspect vice-president, without ambition. My political transition to the coalition of Tancredo Neves had been the subject of much criticism. After all, I was placed on the ticket because I represented factions that would provide the required electoral college majority. I was not the candidate of hope, or even of change. I was a device, a chess pawn in the political strategy. There was no lack of confidants who whispered in my ear that here and there, both inside and outside our coalition, people were saying "Sarney is only a piece in the game. If anything goes wrong, he’ll never take office."

I read everything about the vice-presidency, above all the literature from the United States where, after Watergate, the subject began to interest academics and gave rise to many theses and speculations. An old politician from my native state of Maranhão had warned me, "This is a job in which even the bartender gets into trouble." I made plans for a tranquil vice-presidential term, during which I would spend my time fishing, reading and writing. I felt this should be my reward for the service I had rendered my country in breaking away from all my old ties to help the restoration of democracy.

My personal relations with Tancredo Neves were excellent. He remarked to some companions during the campaign that I had "a sense of proportion." The history of Brazil, as well as that of the United States, is full of personal clashes between the president and the vice-president. I had to be on my guard against anything that might muddy the clear waters between me and my running mate. Helpful contributing factors toward this end were my own temperament and that of Tancredo, both of us averse to friction, both conciliatory men, not easily angered.

My road was clear: I would keep a low profile, I would be a discreet presence who would not cause any trouble. I had always made a point of avoiding the sin of vanity. This is how I managed, for example, to get through the emotional day of March 14, 1985, when I said farewell to the National Congress, where I had spent the past 29 years—with the exception of the five short years I had served as elected governor of my home state.

Contrary to my habit of never going to sleep before midnight, I went home to retire at eight that evening, after the solemn mass that initiated the inauguration ceremonies. I went straight to the bedroom, stretched out and began to reflect. I thought of my life, which had been full of struggle: born in a small village on the outskirts of the Amazon forest, without a wealthy family to support me. From that humble background in Maranhão, fate had carried me to the high office of vice-president. I had never dreamed that this could happen. My wife came in, and seeing me there at that time, on that day, flat on my back, deep in thought, could not help asking, "Are you sick, today of all days?" I answered, "No, I’m just practicing to be vice-president."

Within 30 minutes my respite was to be shattered. The telephone rang. The anguished voice of the head of the medical team of the Chamber of Deputies informed me that Tancredo was ill and was on his way to the hospital. It appeared to be acute appendicitis. There was evidence of septicemia. They would have to operate immediately.

His call was soon followed by another, then another, then another. The telephone never stopped ringing. I felt as if I had been struck by lightning. No one knew that from that moment we were to enter one of the most difficult periods in our history, and that a long martyrdom was about to begin, destroying hopes and illusions. What would become of Brazil?

I went to the hospital and spoke with Tancredo Neves’ relatives, offering my solidarity and companionship. By three o’clock in the morning of March 15, still in the intensive care unit, Tancredo had not regained consciousness. The doctors were silent; they would not risk a prognosis. Just six hours later the National Congress would convene to hear the president take the solemn oath of office. And Tancredo Neves was hovering between life and death.

At the same time, a process of constitutional interpretation was under way. Who would take over? Faced with this unforeseen situation, would the military actually relinquish power? The crisis, the cursed crisis that we had feared throughout our history, was menacing us again; it contained all the ingredients for an enormous explosion.

Returning home, I found the house full of friends asking for the latest news. Rumors had begun to overwhelm the country. Jurists were giving their opinions. The barracks were in a state of agitation. The government was in disarray. There was much talk of resistance to my name. Yet none of this bothered me. I thought only of Tancredo. He did not deserve this tragic end. Nor did Brazil. I told anyone who would listen that all I wanted was to wait for Tancredo Neves to recover so that I could begin to serve as his second-in-command; in the interim, they should entrust the power of government to the president of the Chamber of Deputies.

It was 3:12 a.m. I answered the telephone. On the other end of the line was Senator José Fragelli, president of the National Congress, who told me:

Senator Sarney, prepare yourself to take the oath of office as president today at nine o’clock in the morning. We will go ahead with everything as planned. You will take the place of Tancredo Neves. Everything has been settled, including all constitutional and political problems. President Figueiredo has made only one proviso. He does not wish to transfer the presidential sash to you personally. But this will not really be important. He will not be present at the ceremony. The one essential point is for us to get through this crisis.

Thus it was that I, without wishing it, without having any time to prepare myself for it, became the holder of the largest foreign debt on the face of the earth, as well as the greatest internal debt. My inheritance included the deepest recession in our history, the highest rate of unemployment, an unprecedented climate of violence, potential political disintegration and the highest rate of inflation ever recorded in our country’s history—250 percent a year, with the prospect of reaching 1,000 percent. I took into my hands the fifth-largest country in the world—8.4 million square kilometers, 130 million inhabitants—the eighth-largest economy in the non-communist world, the largest of the world’s Catholic nations. An extraordinary social cauldron, of immense reserves and riches, a continent unto itself, a Brazil of many diverse Brazils.

The greatest optimists thought I might last 90 days at most, as Brazil slid back into institutional instability. The question was whether we would return to a harsh military regime and total dictatorship, or if we were on the road to civil war.

I myself thought about these two hypotheses. But I also thought of the two bulwarks that have sustained me throughout my life: a deep sense of history and an unquestioning belief in God. For the first, I came armed with my formal intellectual education and a reasonable cultural heritage. For the second, my religious background had convinced me that the unhappiest man on earth is he who does not believe in God. I could not fail my country, and, on the tragic night of April 21, 1985, I issued the following communiqué to the nation: "Tancredo is dead. I shall do better than my best."

III

Now to govern. In the president’s office I gave orders for the curtains, which had always been closed, to be opened so that I might gaze upon the sunny central plateau of Brazil, where the capital city of Brasília stands in the loneliness of scrub-wooded lands only recently tamed. I began to face the immense difficulties of leading a developing country, starting with what I discovered to be an absolute lack of accurate information on which to base correct decisions. A gigantic bureaucracy isolates the president, keeping the real problems from him until they are insoluble.

Out there is Brazil. There is the state of São Paulo, producing computers, planes and automobiles, mastering state-of-the-art technologies, with farms as productive as the most efficient in the world. São Paulo itself has all the characteristics of an industrialized country. It has the wealth, opulence and pride to compare itself with any great country in the world.

But then there are the states of Acre, Piauí and Maranhão, where per capita incomes are below $600 a year. In the northeast, we have hunger, absolute misery, periodic droughts, an unjust agrarian system, huge sprawling estates. Thirty million people live there. This is the area where violence reigns and the Brazil of old asserts itself. Average life expectancy is 51 years.

More to the north lies the Amazon region, reminiscent of the first day of Creation, with immense virgin forests and the largest river in the world—an ocean of fresh water. The region is sparsely populated: six million people scattered over five million square kilometers. Some 80,000 Indians live in this vast expanse, some still belonging to the Stone Age.

The west is an area of colonization, of new economic frontiers. There is a rush for gold, for cassiterite and for silver. Lost in this jungle are the largest mineral reserves on earth, Carajás, with 18 billion tons of iron ore, as well as huge quantities of silver, nickel, niobium, manganese and bauxite. Day after day, new waves of people arrive here from all corners of Brazil seeking adventure, riches and a better way of life.

It is from this mixture that Brazil came into being. Half of the continent of South America, it is the tenth-largest economy in the world, but in terms of social indicators it is among the poorest countries—a little above 50th place in the world ranking.

The poorer half of the population of Brazil, which in 1960 had only 15 percent of the national income, today has less than 13 percent. The wealthiest ten percent that held, at that time, 39 percent of the national wealth, now hold 51 percent. In rural areas, one percent of the landed population own 45 percent of the land. When I took office, the minimum wage was $25 a month. Thirteen million people were unemployed.

Where should I start?

IV

The tragic beginning of my administration coincided with the simultaneous explosion of three great crises, a legacy not just of the recent past, but of the history of the country.

First, a political crisis. Redemocratization had only begun with the end of the authoritarian government. Still in place was the enormous juridical-institutional framework left after 20 years of military rule. Everything was in need of reform: the political party organization, the electoral system, the labor laws, laws governing freedom of opinion and information, even the constitution. The people’s desire for full representation, freedom and the complete exercise of citizenship demanded that the new administration take rapid and decisive action in the institutional-political field.

In the second place, an economic crisis existed, a combination of crises from both inside the country and abroad. There was the burden of servicing the foreign debt—with the interest payments eating up all the trade surpluses we had generated at such cost—and the cutting off of investment and loans. There were other problems: the highest rate of inflation in the history of the country; a recession that had already gone on for three years; unemployment (in a country that needs to generate more than one million new jobs per year just to absorb the new workers entering the labor market, the level of unemployment by the end of 1984 was substantially higher than in 1979); and the crisis in the production of foodstuffs, which had been overlooked in favor of export and energy production.

Finally, there was a social crisis. The chronic situation of absolute misery, which is the lot of 30 million Brazilians, was aggravated by the painful effects of recession and the distorted distribution of income: 12-percent unemployment, a sharp decline in the real value of salaries, an increase in infant mortality, hunger and malnutrition, millions of children abandoned, a frightening crime rate, and the spread of new epidemics that added to the disheartening prevalence of traditional diseases. The country would be destabilized if immediate steps—not just stopgap measures but structurally corrective ones—were not taken in the area of social welfare.

The administration’s first line of action was, therefore, to attempt to reduce our internal tensions. Direct elections for the presidency and all other political offices at all levels were reestablished and, in November 1985, elections were finally held for the mayors of state capitals and municipalities. These had previously been canceled because of national security concerns. Ample freedom was given to the political party structure so that organizations that had been operating clandestinely were able to function in the broad daylight of the political scene. Press censorship and interference with the unions were abolished in favor of a free press and free bargaining between employers and employees.

The main political objective of the government was a constitutional amendment that convoked the National Constituent Assembly, to be elected in November 1986, together with the state governors and state legislators. Over 40 years ago, when the last election was held for a constitutional convention, the Brazilian electorate numbered a little over seven million, six million of whom actually voted. This coming November, 60 million Brazilians will go to the polls, ten times the number of voters in 1945; this is an electorate larger than the populations of France, Britain or Italy.

When the new constitution is adopted in 1987, political democracy will be fully consolidated and the guarantees of civil, political, economic and social rights will be consonant with the degree of development we wish to reach in the next few decades.

In the area of social welfare, the administration acted on the basis of two guidelines. We opted firmly for the resumption of economic growth, rejecting international formulas that would create a slowdown. It was obvious to us that only by resuming growth would it be possible to increase the level of employment and restore the real value of salaries.

At the same time, the administration decided to devote 10.5 percent of our gross national product to investments in the social welfare sector that aimed immediately at correcting the most serious problems, with the goal of reaching 12.5 percent by the end of its term. Efforts launched included school lunch programs; the distribution of milk to children, nursing mothers and pregnant women; and heavy investments in health, education, sanitation, housing and social security.

V

On the external front, the foreign debt was exerting increasing pressure; a steady policy was needed in order to avoid the instability and exhaustion of letters of intent to the International Monetary Fund (there had been seven in two years) followed by waivers, which led to new letters.

One imperative imposed itself: the sovereignty of the country and the decision to resume growth and to alleviate social tensions were not negotiable.

Supported by successive high trade surpluses, the accumulation of reserves and the strict fulfillment of international commitments, the government endeavored to renegotiate the foreign debt on a more stable and more favorable basis.

One fact is very often forgotten. During the whole so-called debt crisis of the developing countries, not one bank or investor lost money in Brazil. The spreads imposed on our country, which frequently were comparable to countries that could hardly meet their obligations or even had declared a moratorium, never really corresponded to the actual risk taken by investors in Brazil.

Brazil, like other debtors, is affected by international factors beyond its control, but our economy has certain characteristics of its own that render it less vulnerable. The impressive expansion of the country’s industrial base during the past few years not only allows us to diversify our exports but also to reduce our dependence on imports. The ratio of imports to gross national product is, in the case of Brazil, only six percent (three percent if oil is excluded), perhaps the lowest in the world. This explains why Brazil was able in the last three years to grow, to expand its reserves, to produce annual trade surpluses of about $12 billion, and to pay the interest on its debt without receiving any new money and without an agreement with the International Monetary Fund.

It would be risky, however, to extract from our experience generalizations applicable to others. Our position is unique. Yet we too continue to be vulnerable to international fluctuations.

We firmly believe that the debt problem must be approached politically, i.e., from an overall perspective. Governments must cooperate in the search for solutions that will take into account the political, social and human costs of their deteriorating situations. Thus it was with gratification that we received the Baker Plan. It is a step in the right direction that should be followed by other complementary measures, including increasing the commitments from private banks and the lending capacity of international financial organizations.

This is what is proposed, in essence, by the Cartagena Consensus, whereby the Latin Americans have sought to persuade the governments of the industrialized countries of the need to accept the joint responsibility of creditors and debtors for the origin of the problems, in the quest for solutions and in the sharing of sacrifices. We should not forget what John Maynard Keynes said in 1921 regarding war reparations: "It is the duty of the creditor not to frustrate payment."

A corollary to this principle is defending the access of Brazilian exports to the markets of the creditor nations. Brazil must achieve trade surpluses in order to adjust its balance of payments. The credits derived from trade balances are reexported in the form of debt service. Should protectionism close the industrialized markets from which we must obtain our trade balances, where shall we seek alternate sources to keep up the payments?

After decades of growth brought about by public spending, our country is now in a position to make adjustments in the public sector, checking its expansion and eliminating inefficiency. We have an unshakable belief in the role of private initiative in the economic recovery of the nation. Thus we are setting a broad program designed to create conditions favorable to a thriving entrepreneurial freedom in our country.

But, in addition to the old concepts of eschewing state control and of selling public sector assets, putting the Brazilian economy in private hands calls for a broad curtailment of the interventionist and regulating presence of the state in the economy. This is a new posture; economic development is now to be led by a well-structured private sector, free of the paternalism of the state. Thus is buried, together with its authoritarianism, the government’s role as arbiter in the economy.

The success of this strategy was demonstrated by the 8.2-percent growth of the gross domestic product in 1985 and the resurgence of industrial activity. Moreover, the domestic market was revived without weakening our foreign accounts. Recessionary tendencies were reversed, and the country regained confidence in its capacity for economic growth. Tax reform began to increase revenues, decentralize the application of public funds and, perhaps more importantly, distribute the fiscal burden more fairly. And the new political atmosphere, in which the call for social reforms has been heeded, created for the first time in recent years some improvement in the distribution of wealth, not only through economic growth, increases in the level of employment and the real value of salaries, and a more equitable fiscal policy, but also through the allocation of public funds to benefit the neediest sectors of society.

Nonetheless, inflation continued to be a problem. Monthly inflation rates had declined beginning in April 1985, but began to climb again in October. This owed in large part to the persistence of a structural factor that was feeding the inflationary process, namely, the generalized indexing of the economy, and a considerable element of inertia, which had become a cultural component of the Brazilian mentality.

Inflation is a formidable income concentrator. In a country already subject to historical distortions of distribution of wealth, this situation was absolutely untenable. It had to come to an end.

VI

At the outset of 1986, conditions were propitious for decisive measures. Various academic studies commissioned by the government proposed measures that represented a great innovation in Brazil’s economic policy. Tight secrecy surrounded the drafting of a new plan and set the tone of extreme seriousness with which the economic team took up the challenge. This secrecy, and the resulting surprise in the application of the plan, were prerequisites for its success; any leak would have endangered the initiative by precipitating price hikes and virtual paralysis of the economy.

The groundwork was being laid to besiege and attack inflation at its deepest roots. The inflation rates for January and February of 1986 led to untenable projections for the year of 1986 and were apt to bring social and economic chaos to the country.

On February 28, 1986,1 called a meeting of the cabinet and on national radio and television I announced to the country the Cruzado Plan, or the Plan for Economic Stabilization.

The plan consisted of a series of measures designed to dismantle the inflationary structure. Outstanding among the principal measures were the complete elimination of indexation by ending the generalized practice of monetary correction, and the replacement of the cruzeiro by a new and strong monetary unit, the cruzado. Furthermore, commodity prices, public service charges, mortgage payments and rents were frozen. Workers were our special concern: in addition to granting some real wage increases, unemployment insurance and sliding scale adjustments—rights demanded for many years by the working classes—were instituted.

The government, addressing itself directly to each Brazilian citizen, appointed him or her a price-freeze monitor. The people were exhorted to collaborate in the success of the initiative.

The response could not have been more positive. The prompt reaction of the people to price controls aroused a popular movement without precedent in Brazilian history, irrefutably revealing the degree to which these measures were well received and the great willingness to fight inflation with concrete actions. Reaction among the entrepreneurial circles was equally positive. It was immediately perceived that the government was capable of adopting positions considered economically effective. The government also established solid and clear conditions for economic activity, and a program of renewed growth.

Thus the plan had two great achievements. In the economic sphere, it was evident that emphasis was to be given to acknowledging the importance of production and work in detriment to speculation and the artificiality of the financial market. A solid and trustworthy currency was created. With the end of indexation, we were able to deduct from interest rates that intolerable guaranteed increment corresponding to the inflation rate, which had been diverting funds from the productive sector to the financial sector. Conditions were established for economic and business planning, thereby eliminating the disorder and uncertainty that had devastated the economy. In short, the clarity and objectivity necessary for accurate assessments of costs, salaries and profits, investments, and economic relations were restored to the economic process at long last.

Politically, the main factor is undoubtedly the popular backing received by the government. The people’s response to the Cruzado Plan revealed that an economic reform abolishing inflation and speculation was a great popular aspiration. The participation of the people in controlling prices thus represented, at one and the same time, both support for the plan and an instrument of the plan, whose success depended undeniably on its favorable reception by the people. Symbolically appointed the president’s monitors, Brazilians began to do their shopping with official price lists in hand, reporting any changes and abuses.

Herein lies the deepest significance of the reform. The people perceived the cultural, even moral, scope of the measures adopted. They represented the end of immobilism. Condemning speculation ceased to be merely a rhetorical ploy. Dignity was restored to work and production. The Brazilian people immediately picked up and responded to this moral note, and popular support for the measures taken by the government reached levels heretofore unknown in Brazilian history.

Based on the record of the first months of the Cruzado Plan, expectations were in large part satisfied. Inflation, which fell to a negative rate in the month of March, leveled off at low rates in the succeeding months (between a net of three and four percent in the first four months) for an average monthly rate of less than one percent. To prevent renewed inflationary pressures resulting from excess purchasing power, in July we moved to create a compulsory loan system for the financing of an ambitious program to prepare the Brazilian infrastructure for the next century. These measures will consolidate the accomplishments of the Cruzado Plan.

Price stability, generally speaking, is now an everyday reality. Salaries hold their real purchasing power. The increased demand for goods and services is the best indication that the plan has had desirable and immediate consequences socially, as witnessed by the reversal in unemployment figures and the rise in productivity to levels already comparable to those of 1980.

The reform initiated in February touched fundamental points of our life formerly considered unassailable by reason of either passivity or complacency. We thus destroyed the myth that civilian regimes in Latin America are necessarily weak and incapable of coping with economic crises.

The plan’s success makes it possible for us to consider in greater detail and with a fresh perspective the most critical problems of the country, those historical distortions that hamper or impede development and the complete modernization of Brazilian society: lack of order in the public sector, imbalances in the social and regional distribution of income, and out-and-out poverty.

It is in the rural area, where 30 percent of our population live, that we have the most poverty, the greatest suffering, more victims of disease and starvation, and the inefficient, large land-holdings. We are in the process of carrying out a democratic agrarian reform designed not to affect property rights, but to increase the number of property owners. We have encountered resistance both from backward, landed proprietors and from radicals, who are always attracted by the idea of expropriation.

This program was one of the main topics on my mind when I went to see Pope John Paul II in July. Land reform is also one of his personal interests, and he expressed to me the hope that our problems can be solved without resort to violence in our countryside. The church is very close to the people, and it identifies itself passionately with social problems. Our dialogue with the church is good, our objectives coincide; the government’s top priority is to improve the lot of the poorest of the poor.

The social debt is still the greatest challenge facing Brazil. If we can achieve a level of investment in the social area of about 12.5 percent of the gross national product in the next 15 years, we shall be, at the end of the century, a country with the living standards, consumption patterns and well-being of today’s most prosperous Mediterranean countries of Europe.

With the country’s return to democracy and its economic counterpart, the Cruzado Plan, Brazilians have endowed themselves with the necessary instruments to advance toward that goal for launching our 21st century.

VII

Let me affirm here, in all frankness, that I went through this entire period of difficulties without receiving one gesture of support from the United States. A small incident set an unhappy tone. In the midst of the festivities for our National Independence Day on September 7, 1985, while I was receiving the felicitations of the ambassadors of many countries, I was called aside. It was to receive the news that at that precise moment the American government had announced an investigation into the activities of the Brazilian computer industry. This lack of tact, at the very least, troubled me.

I believe there is no greater historical error on the part of the United States in its relationship with South America than the third-class treatment it has given to this continent, as if the whole region were the turf only of the multinational corporations. Indeed, these enterprises have often been the only positive—and sometimes negative—American presence in the fields of industry, technology and modern consumer goods.

The U.S. government has not taken a broader view of us. South America has been a friend whose fidelity the United States has taken for granted far too long. Latin Americans have an extraordinary admiration for the United States, for its history, its way of life, its ideals and its freedom. But we are at the same time jealous and hurt because the United States has never regarded us in the light we expect. The idea of being a backyard, or a vacant lot, is naturally upsetting.

There is still today no effective program that would foster a deeper solidarity. Latin America, in part as a reaction to U.S. policy itself, is beginning to nurture anti-American feelings where they had not existed before. When problems arise, Washington’s concern is security; its solution, military. So the error is compounded. This is how the problem cropped up in the Caribbean, and this is how other problems will arise in our hemisphere.

Brazilians can speak calmly about these things because we enjoy a privileged situation. We are potentially rich in a poor South America. But we will not enjoy stability for long if poverty and social inequalities continue internally as well as externally. Without economic growth we have no way out. The road to salvation for Latin America passes through growth, and this will not be possible without the assistance of the United States.

Brazil and the United States have much in common. We share the same values and accept the same principle of peaceful international coexistence. We are both of continental size. We are open societies, democracies, pluralistic, with great vigor and dynamism.

Within this common ground of shared values and aspirations, each country has room to define, in its own image, policies that correspond to its own specific situation. One country is a superpower, the other is a developing country; each has its own objectives and instruments in the international system.

On the other hand, the United States is an overwhelming presence in Brazil: it is our biggest trading partner, our largest investor, our greatest creditor, our main source for technology and cultural influence. It is only natural for us to have a heightened sensitivity toward any gesture inconsistent with the pattern of the well-balanced, rational dialogue we have always sought to maintain.

In 1986, Brazil is leaving far behind the agricultural exporting nation of 25 years ago. We have a new presence in the world, occupying space not because of the politics of power but as a function of the new competitiveness of our products, and of the very dynamism of our economy. We have at least partially overcome the phase in which it was said that our evils (and, for that matter, our advantages) came from abroad. But the world context still possesses the potential of creating serious constraints for us.

Brazil today is a medium-sized power, with a growing international presence as a result of its dimensions and interests. It is a force in the service of balance and harmony. Only a socially and politically stable Brazil can make an effective contribution to the world in the years to come.

Brazil today has achieved stability. We have passed through the dark clouds. Our country is enjoying a period of freedom that it has never enjoyed before. We must now organize and settle our future. It is a great task.

Our country knows that the 21st century will have moved beyond the division between poor and rich nations. The world will instead be divided between peoples condemned to cultural colonization and peoples who control technologies. No one should expect Brazil, with its riches, with its potential, with its determination, to be a second-rate country. We have a different vision of ourselves, and we expect the United States to share that vision.

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