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Strategies & Market Trends : Telebras (TBH) & Brazil
TBH 0.404-14.1%Dec 31 3:59 PM EST

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To: Steve Fancy who wrote (9036)10/18/1998 1:52:00 PM
From: Steve Fancy  Read Replies (1) of 22640
 
Why Was There No Dancing in the Streets After Cardoso's Election
Triumph?

By John Fitzpatrick, Celtic Comunicações.

Why was President Fernando Henrique Cardoso's election triumph such an anti climax?
On the evening of October 4 one felt as one had on the evening of the World Cup final
when France unceremoniously drubbed the champions, Brazil, and won the Cup. Just as
there were no street parades after Brazil's pathetic performance on the football field
there were no public celebrations and jubilation after the election results were known,
despite the fact that Cardoso won convincingly in the first round with 53% of the vote
and his only serious rival, Lula, trailed with around 32%.

Why was this? Was it because Brazilians have never reelected a president until
Cardoso changed the constitution, and so there was not the same feeling of change
which usually prevails? Was it because of the infantile squabbles by the PT over the exit
polls which pointed to a larger margin of victory of around 56%? Was it because of the
uncertainty in some of the state governorship elections such as São Paulo, Rio de
Janeiro and Minas Gerais? Was it because of the impending fiscal package, with
possible tax increases, and the continuing mess on all the world's financial markets? Or
was it just because people simply voted for Cardoso not because they admire him or
expect anything new from him but to thank him for killing inflation and trust he will
continue to do so?

In one way this feeling of anti-climax is good because it shows Brazilians are
becoming as mature and blasé about democracy as people in more developed countries.
In another way it is a pity because Cardoso really needs his mandate to be backed more
enthusiastically by the people. During his first four years he has had to kowtow to the
self-interested political parties which make up his unimpressive governing alliance. As
even his own PSDB has proved awkward, Cardoso has had to rely heavily on the PFL
of Antonio Carlos Magalhães to get him out of difficulties. Senate leader Magalhães has
been loyal but his support does not come for nothing.

Cardoso has had to offer a kind of half support for the PPB's Paulo Maluf who
now looks as though he will beat the PSDB governor, Mario Covas, in São Paulo.
Cardoso has put the hands of the lower house in Michel Temer of the PMDB who has
been unable to reconcile the party's virulently anti-Cardoso faction. At the time of
writing Temer is promising to have a final vote on social security reform in November
although the tax reform, which was supposed to have been dealt with this year, will be
tackled next year. Well, none of this comes as a surprise to anyone and we face another
four years of thwarted reforms and delays.

There is no space here to discuss the congressional results but it is interesting to
note that of the 513 deputies, 238, or 46%, are new. However, they are likely to be just
new wine in old bottles and there is no great influx of new blood ready to support the
President. Having said that, the governing alliance will continue and the Senate is still in
"safe" hands. So for the next four years we can look forward to much of the same snail's
pace progress we have seen during Cardoso's first term of office.

How Cardoso handles the forthcoming fiscal package will be crucial. No doubt
there will be howls of protests from all the usual interest groups and the special pleading
from the "good guys" who claim to have done all they can. The opposition, inside and
outside the government, will try to block them and use them as an excuse to continue
blocking the reforms.

Cardoso can quite legitimately appeal over the heads of the Congress to the
people who elected him so convincingly. However, whether, the intellectual,
ex-sociology professor inside Cardoso can give way to a more outgoing political leader
is another matter.

October 15, 1998

John Fitzpatrick is a political commentator and founder of Celtic ComunicaÇÕes Ltda., SÃo
Paulo, which specializes in editorial and translation services. Tel/fax (5511) 280 5233, E-mail
johnfitz@mandic.com.br
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