Brazil in the 1980’s and 1990’s

The end of the Eighties coincided in Brazil with the crisis of the moderate government coalition, made up of the Partido do Movimento Democrático Brasileiro (PMDB) and the Partido da Frente Liberal (PFL), and led by the President of the Republic J. Sarney. Inflation, drastically reduced in 1986, had risen to 700 % in 1988, unemployment and public debt were growing steadily, while social conflict increased. The new Constitution, launched in October 1988, had abolished censorship, granted the right to vote to sixteen-year-olds and set the duration of the presidential mandate at five years, but did not contain any indications about agrarian reform: Brazil continued to have one of the most unequal land distributions in the world. The lack of agrarian reform, the massive urbanization of landless peasants, the increase in urban crime continued to constitute the fulcrum of a social question which the ruling class of the Brazil of the nineties was unable to cope with with the determination that, vice versa, demonstrated in pursuing a strictly anti-inflationary economic policy (in line with the rest of the continent) and in promoting regional relations through the establishment of MERCOSUL.

The conservative F. Collor de Mello won the presidential elections of November-December 1989. After conducting an electoral campaign in the name of the fight against corruption and the privatization of state-owned enterprises, the new president launched a series of reforms aimed at liberalizing the economy and restructuring the public administration through austerity measures that essentially affected public employment and limited heavily state investment. The failure to contain inflation, which had a new surge in 1992, undermined the consensus around Collor de Mello, who in the first months of 1992 was unable to launch a new program of economic reforms due to the opposition of the Partido da Social Democracia Brasileira (PSDB), a center-left formation born in 1988 from a split of the PMDB. To this were added accusations of corruption relating to some government officials and to Collor de Mello himself who was finally forced to resign in December 1992 and replaced by his vice president, I. Franco.

The start of the new government was marked by a further worsening of financial and political problems: the fragmentation of the political system (only temporarily halted by the broad coalition that had forced Collor de Mello to resign) blocked any attempt at economic reform based on the revision of the tax system, while foreign investments drastically decreased. Only in the first months of 1994 the new Finance Minister FH Cardoso (in office since May 1993) succeeded in introducing a series of economic measures that included the vigorous resumption of privatizations, a new financial transaction tax, a freeze on salaries for one year, and the creation of a special emergency fund for social spending financed through partial drainage (15 %) of resources previously attributed to states and individual administrations. Furthermore, in March 1994 the URV (Unidade Real de Valor) was added to the current currency at parity with the US dollar, which prepared the introduction, in July 1994, of the new currency, the real, always at parity with the dollar.

Driven by the success in breaking inflation, Cardoso, candidatosi for the PSDB and also supported by the moderate PFL and the reformist Partido Trabalhista Brasileiro (PTB), won in the first round presidential October 1994 with the 54, 3 % of the votes, against the 27 % obtained by the leader of the Partido dos Trabalhadores (PT), IL da Silva, who for his part had emerged as a natural aspirant to the presidency of the Republic following the chain of scandals that during Franco’s presidency had involved numerous representatives of the ruling parties.

Cardoso, supported by prominent figures in the world of the economy and viewed with some favor also by the military, had managed to obtain the support of a part of the working class thanks to a program of structural reforms of the Brazilian economy, which at the privatizations and cuts in public spending was accompanied by an increase in taxes and a further decrease in funds destined for the administrations of individual states in order to give new impetus to the development of social infrastructures. In addition, during the election campaign, he had placed great emphasis on the age-old question of land reform and the need to achieve a more equitable distribution of land in rural areas.

However, the composite nature of the ruling coalition (of which the PMDB had also joined) and the fact that one-third of the Congress was made up of representatives of large landowners allowed Cardoso to only partially realize his program: the public employment, health and education suffered new cuts, and in June 1995 a constitutional amendment allowed the oil sector to be included in the privatization program (already extended to telecommunications and transport), which had been reserved for the state monopoly for over forty years.

Conversely remained blocked any attempt at tax reform and especially agrarian reform, the urgency of which was eloquently demonstrated by the existence of 23 million peasants who continued to live below the poverty line, while 0, 83 % of the landowners was holder of 43 % of arable land (data referring to 1997).

At the same time, the ranks of the Landless Movement (Movimento dos Sem-Terra, MST) swelled, founded in 1985, which had made the occupation of large fazendas and uncultivated land its own as an instrument of political struggle. In fact, in the 1990s the MST seemed to be the only remaining form of opposition to a center-left government held back in its reformist demands by the EPFL and on the other hand victorious in the fight against inflation. The bloody clashes between the members of the MST and the private militias of the landowners, often flanked by the police, led Cardoso, after yet another massacre of laborers in April 1996, to create a special Ministry for Agrarian Reform, which however proved unable to significantly affect the situation: a year after the massacre, the MST organized, in fact, a march on Brasilia to protest against the failure to implement the agrarian reform, also receiving the support of the urban middle classes. For Brazil 2017, please check

In close relation to this order of problems, the exodus of rural populations from the countryside continued throughout the 1990s and the consequent massive and disorderly urbanization, which contributed to the increase in crime and in particular juvenile delinquency, fought by the police. with often violently illegal methods.

In the field of international relations, in May 1994, Brazil joined the 1967 Treaty of Tlatelolco on the non-proliferation of nuclear weapons in Latin America and the Caribbean.

Following the Treaty of Asunción, signed in 1991, the Mercado Comun do Sul (MERCOSUL) between Brazil, Argentina, Paraguay and Uruguay entered into force on 1 January 1995, in order to guarantee the free circulation of goods and services, a common commercial policy towards third countries and the coordination of the macroeconomic policies of the member countries. In the space of two years, MERCOSUL led to a spectacular increase in the volume of trade, but also caused a substantial trade deficit of Brazil towards Argentina, caused by the low competitiveness of Brazilian products compared to Argentine ones and the overvaluation of the real.. Furthermore, the progressive liberalization of the economic system made necessary structural adjustments of Brazilian industries which led, in 1996, to a considerable increase in unemployment. Faced with these difficulties, the Brazilian trade unions reacted with protests and general strikes: without contesting the nature of MERCOSUL as a purely commercial institution, the unions demanded prompt intervention by the government in wage policy, as well as in the recognition of workers’ rights..

Between undoubted successes in the fight against inflation and impediments to the launch of profound social reforms, President Cardoso, after the defeat suffered by the governing parties in the municipal elections of October-November 1996, in which the EPFL and especially the Partido Progressive Brasileiro (PPB, right-wing), he managed, in 1997, to continue his work of liberalization of the economic system and to definitively approve in Congress in June 1997 an amendment to the Constitution that made the presidential term renewable for a second. term. This allowed him to re-run in the elections of October 1998, after a year of partial successes (the successful privatization of telecommunications) affected, however, by the international economic crisis triggered by the collapse of the Asian and Russian stock exchanges.

The flight of foreign capital between August and September 1998 and the consequent rise in interest rates had, in fact, severely slowed down economic growth, highlighting the country’s structural imbalances: an overvalued currency, a public deficit that was difficult to control, growing unemployment and, above all, a distribution of income that continued to make people live. in absolute misery half of the population. In these difficult circumstances, the outgoing president nevertheless managed to act as the sole guarantor of political and economic stability vis-à-vis the IMF, which conditioned the granting of aid to the implementation of an austerity policy focused above all on cuts in public spending, on the reform of pensions and tax increases. And, based on an electoral program focused on these priorities,1998 against IL de Silva, leader of the PT, while in January 1999 a coalition government led by the EPFL was formed.

Brazil in the 1980's and 1990's