An upbet--ifslightly wary--Brazil celebrated the New Year with the inauguration of President Fernando Henrique Cardoso, an old leftist who led a center-right coalition to power, promising to take the country into a long period of economic growth tied to social justice. "We have recovered our confidence in development. The time has come to grow and flourish," Cardoso said, calling social justice his adminis- tration's number-one objective. Cardoso seemed to be saying that Brazil could have its cake and eat it too: he would apply the standard recipe for neoliberal economic restructuring demanded by foreign capital and international lending agencies and he would improve the well-being of the nearly half of the country's 155 million people who experience hunger on a regular basis. Ordinary Brazilians took the new president at his word. A December opinion poll showed that 78% of those surveyed believed their lives would improve in 1995. Foreign investors were equally charmed. Government officials predict that $5 billion in foreign capital will be pumped into the country by 1996. Cardoso's rise can be traced back to a precise date: July 1 last year, the day that the "Real Plan," which he formulated during his tenure as finance minister, went into effect. Under the tight-money plan, the government cut spending, froze salaries, and created a new currency called the real, pegged to the U.S. dollar. Monthly inflation dropped from 50% in June to 6.1% in July. Cardoso soon leapt ahead of Workers Party presidential candidate Luis Inicio "Lula" da Silva in opinion polls, eventually winning 54% of the vote in the October 3 national elections. For the time being, the country is enjoying an economic boom. In the final quarter of 1994, the economy grew at a staggering annualized rate of 9%. Brazil's equity markets ended 1994 up 64.8% in dollar terms, the region's best performer. Low inflation has ushered in a surge in private con- sumption, mostly among lower-income groups who have been able to purchase goods on install- ment credit. Foreign multinationals-from Pepsi Cola to Volkswagen to Chase Manhattan-are rushing in to get a piece of the action. moment of high expectations in the longer history of arduous struggles for labor rights, land, and racial and gender equality. Brazil remains among the most unequal and unjust nations in the world. The country has a spectacular concentration of wealth. A comparison with Mexico-hardly a model of equity-illustrates the gravity of the situation: while the richest 20% of Mexicans earn 14 times the income of the poorest 20%, Brazil's richest 20% earn 26 times the income of the poorest 20%. (In the United States, the figure is "only" 11 times.) Land distribu- tion is also among the region's most uneven. The wealthiest 0.9% of landholders own 44% of the land while the poorest 53% hold just 2.7%. Since taking office, Cardoso has concentrated his energies on promoting a set of constitutional reforms that will grease the wheels of his neoliberal economic agenda, positioning himself-in Jos6 Luiz Fiori's words-as the "condottiere of the industrial bourgeoisie." Revealing his commitment to fiscal budget cuts, Cardoso vetoed a measure passed by Congress in January to raise the minu- mum wage, currently $80 a month, among the lowest in Latin America. He justified the veto by arguing that since retirement benefits are pegged to the minimum wage, the increase would drive up the government's social-security bill by $4 billion this year. While many progressives continue to harbor hopes that the new president's old ideals will even- tually shine through, this nation of great wealth and great misery may well be headed for a stream- lined version of the status quo.
