The Economic Troubles Are Not Being Solved

Brazil's finance minister, Francisco Clementino de San Thiago Dantas, made his country's economic position sound encouraging. On nationwide TV to discuss the three-year plan to end Brazil's chronic crises, Dantas said that "in many points we have achieved full satisfaction." The budget deficit will be halved to $400 million in fiscal 1963; general credit, which was up 81% last year, is tightening by the month; the country's money presses are printing only a dribble of new currency.

Gold & Wages. The Dantas picture was highly optimistic. Other economic indicators still show that Brazil faces hard times. Inflation is rising, unabated; gold reserves dropped dangerously low, and the 1963 trade deficit will probably top last year's $261 million. All in all, progress is slow in the much-heralded economic recovery program launched by Dantas and President Joao Goulart five months ago. In key areas where the government has tried to move ahead, political pressures have forced it back into painful retreat.

In an effort to reduce the strain on Brazil's finances, Goulart hoped to hold cost-of-living wage increases for civil servants and military personnel to 40% this year. Despite his pleas, Congress went right ahead and voted a 70% wage hike. In the same way last March, Goulart persuaded automakers to freeze prices for three months to help stem inflation. Before long, though, their income was out of step with costs, and suddenly the industry was in crisis. Finally, Goulart had to ease off austerity, bail the industry out with some special financing.

Another major Goulart objective is land reform. And there, too, he is under heavy fire. According to Brazilian law, the government must pay for expropriated land in cash. Since that means cranking up the money presses, Goulart wants to amend the constitution so that the government can buy land with its own bonds. But Brazil's conservatives, led by fiery Carlos Lacerda, governor of Guanabara state and an arch foe of Goulart, are dead set against any such tampering with the constitution, recently voted down Goulart's proposal in a special committee of Congress.

Roll of Drums. Even the leftists, on whom Goulart once depended for political support, are drawing away from Brazil's embattled President. They attack his attempts to enforce austerity, argue for the dismissal of moderate Cabinet members and threaten general strikes to impose their views. At a mass meeting in Rio last month, the Communist-dominated General Command of Workers joined 600 rabidly nationalistic Brazilian army noncoms in exhorting Goulart to ram through land reform--that, or revolution. "We will start our march," yelled one speaker, "and the roll of our drums will sound like the hammering in the machine shops, and the chant of our fight will be inspired by the weeping of the hungry children in the Northeast."

More violent still is Goulart's No. 1 headache on the left--his brother-in-law Leonel Brizola, a federal Deputy and an anti-Yankee, ultranationalist demagogue, who has his own strong following. Brizola accuses Goulart's government of "a crime of high treason" for agreeing to pay the U.S.-owned American & Foreign Power Co. some $140 million for ten power stations in Brazil. And he is getting so angry about it that he recently brought up the faint but nagging rumors of a coup against Goulart. In an ambiguous warning that could be taken either way, Brizola reminded his brother-in-law of what happened in Argentina 14 months ago. "I take the path of the people," he said, "while you take the path that led Frondizi to jail."

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