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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: David Petty who wrote (11493)	1/13/1999 3:57:00 AM
From: Steve Fancy	Respond to of 22640

I seem to have left this table of Cardoso/Franco states out of an earlier post... Below is a table summarizing state debt obligations to the federal government under the most recent debt restructuring accords. The table also includes each state's economic ranking and governors' party affiliations. The states are grouped according to probable support for and against Minas Gerais' debt moratorium initiative, based on governors' comments and local press reports in recent days. Likely Cardoso Supporters: State Party GDP Rank* Fed Debt SAO PAULO PSDB 1 49.255 Bln PARANA PPB 5 889 Mln BAHIA PFL 6 5.178 Bln SANTA CATARINA PPB 7 2.405 Bln DISTRITO FEDERAL PMDB 8 - -* PERNAMBUCO PMDB 9 2.297 Bln GOIAS PSDB 10 4.950 Bln PARA PSDB 11 735 Mln CEARA PSDB 12 1.098 Bln ESPIRITO SANTO PSDB 13 670 Mln AMAZONAS PFL 14 989 Mln MARANHAO PFL 16 2.301 Bln MATO GROSSO PSDB 17 2.525 Bln RIO GRANDE DO NORTE PMDB 18 713 Mln SERGIPE PSDB 19 642 Mln PARAIBA PMDB 20 1.103 Bln PIAUI PMDB 23 1.137 Bln TOCANTINS PPB 26 90 Mln** RORAIMA PPB 27 7 Mln Possible Franco Supporters RIO DE JANEIRO PDT 2 2.169 Bln MINAS GERAIS PMDB 3 16.208 Bln RIO GRANDE DO SUL PT 4 8.845 Bln MATO GROSSO DO SUL PT 15 1.725 Bln ALAGOAS PSB 22 1.217 Bln ACRE PT 24 394 Mln Unknown RONDONIA PFL 21 771 Mln AMAPA PSB 25 - -* TOTAL Debt Owed To Federal Government - BRR108 Bln, rounded Government-allied parties - Democratic Movement Party (PMDB), Social Democratic Party (PSDB), Liberal Front Party (PFL), Brazilian Progressive Party (PPB). Government opposition - Workers' Party (PT), Brazilian Socialist Party (PSB), Democratic Workers' Party (PDT) Calculated by government research group IPEA, last updated for 1996 data Source: Finance Ministry - January 1999, in Reals States which did not enter debt restructuring agreement **Tocantins debt refers to 1993 round of renegotiations -By Adriana Arai; (55-11) 813-1988; Stephen Wisnefski and William Vanvolsem contributed to this story

To: David Petty who wrote (11493)	1/13/1999 4:07:00 AM
From: Steve Fancy	Respond to of 22640

INTERVIEW-Brazil govt seen facing more opposition Reuters, Tuesday, January 12, 1999 at 18:50 By Mary Milliken SAO PAULO, Jan 12 (Reuters) - A Brazilian governor rebelling against debt payments may be a lone rider for now, but might eventually prove a pack leader for fresh opposition to President Fernando Henrique Cardoso, says a leading Brazilian scholar. "It's a little episode, but it's a sign of a larger thing and the larger thing is that there is more and more disposition to oppose the government," said Roberto Mangabeira Unger, a Harvard University Law School professor who seeks to foster an alternative political force in Brazil to Cardoso's governing alliance. Mangabeira Unger, a government critic who nevertheless has personal access to the president, believes Minas Gerais governor Itamar Franco and his moratorium last Wednesday on payments of federal debt will be followed by acts of defiance by other governors, business groups and organizations representing middle class society. "It's no longer going to be the case that we just have the government on the one hand and the MST on the other," Mangabeira Unger said, referring to the landless rural workers' movement that has been the most vocal opposition to Cardoso in recent years. The 51-year old Rio de Janeiro native says he should be back in Brazil by mid-year with plans to work on building a center-left coalition. Mangabeira Unger acted as an advisor to center-left presidential candidate Ciro Gomes, who came in a distant third behind Cardoso and Luiz Inacio Lula de Silva of the leftist Workers' Party in October 1998 elections. Mangabeira Unger's views are widely published in the local press and, when in Brazil, he is a sought-after guest for television talk shows and debates. At present, he has no plans to work for Cardoso but is willing to help out the president, who was re-elected last October for a second four-year term. "I regarded his election, as I have told him, a disaster for the Brazilian people," Mangabeira Unger said. "On the other hand, I also think that we have a national crisis in Brazil and we have the government that we have." Mangabeira Unger accuses Cardoso of destroying Brazil's economy and kowtowing to the financial markets as the economy sinks. Responding to what he calls the "Wall Street-Treasury Department" line included serving impossible debt repayment schedules to the Brazilian states, he says. That is why the left-leaning professor sides with unlikely ally Franco and his 90-day moratorium on his state's $13.4 billion debt to the federal government announced late last Wednesday. Since then, investors have reacted nervously by dumping Brazilian assets and voicing concern for the political wear-and-tear on Cardoso. The Sao Paulo Bourse's Bovespa Index plummeted 20 percent since the moratorium declaration. The Brazilian "C' bond, the most liquid emerging market bond, has fallen 10 percent to 54.50 -- its lowest level since Sept. 18. He calls Cardoso's strategy to defend currency stability a "scorched earth policy" that is exacting too high of a price on the country. Brazil's punishing high real interest rates, now at 30 percent, are strangling the economy, as is the three-year fiscal austerity package to cut the public deficit and secure the $41.5 billion in credit from international lenders. "They follow the practice of what I call good behavior, of no confrontations with either the domestic or international allies and it is not so easy to change," he said. mary.milliken@reuters.com)) Copyright 1999, Reuters News Service