Cardoso's Appeal Intact Despite Brazil's
Economic Crisis
Dow Jones Newswires
RIO DE JANEIRO (AP)--President Fernando Henrique Cardoso says he
has no magic solution for Brazil's worst economic crisis since the country
went broke in 1982. Yet, voters somehow seem under his spell.
Cardoso led Brazil into a time of stagnation and record unemployment. If
re-elected, he promises spending cuts and more taxes.
And he is the overwhelming favorite to win another four-year term on
Sunday, when Brazilians also will choose 27 governors, all 513 federal
deputies, a third of the 81-seat Senate and 1,045 state legislators.
All polls have indicated the 67-year-old sociologist has enough support to
win on the first ballot.
A survey conducted last week by the prestigious Ibope polling institute
gave Cardoso 47 percent of the vote to 24 percent for Luiz Inacio Lula da
Silva of the leftist Workers Party. The survey of 3,000 people nationwide
had a margin of error of 3 percentage points.
Voting is compulsory for Brazilians between 18 and 70.
Though Cardoso was expected to prevail, Brazilians are less certain about
how he will see the world's ninth-largest economy through its economic
crisis. Market panic that battered Asia and Russia is aimed squarely at
Brazil.
Investors are pulling their money out of the country, fearing the government
won't obtain financing for its huge budget deficit of nearly $60 billion -
more than 7 percent of gross domestic product.
Hard-currency reserves, once a cushion against speculation, have plunged
from $74 billion in April to $45 billion last week.
Finance Minister Pedro Malan has been negotiating an emergency loan
package reportedly worth $30 billion with the International Monetary
Fund and other public and private lenders.
The austerity cuts Brazilians can expect would be severe. Cuts in public
spending could hurt crumbling health and school systems. Industry and the
middle class are bracing for higher taxes. Pressure is growing for a
devaluation of the real, Brazil's currency.
Unemployment, which unions calculate at 18 percent, is expected to
worsen. Cardoso's early campaign promise to create 7.8 million jobs is all
but forgotten. "No magic can resolve this overnight," Cardoso said
recently. "We must be clear about our limits." |
