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Return to Civilian Government, Transition to Democracy

Jose Sarney, Sarney, Tancredo Neves, state assembly members, direct elections

The battered economy severely discredited the military regime in the eyes of most Brazilians. Furthermore, few saw much need for a military regime, given that the threat of leftist revolution had long since been crushed. In 1984 millions of Brazilians took to the streets demanding immediate direct elections for president.

The government managed to fend off the calls for direct elections by instituting an electoral college, in which congressional delegates and state assembly members voted for the president. However, the massive public demonstrations helped split the government party. Many of the governmentís supporters in the electoral college defected and voted with the opposition, defeating the official government candidate for president in 1984. The electoral college instead chose Tancredo Neves, the governor of Minas Gerais, to become Brazilís first civilian president since 1964. They chose Jose Sarney as vice president. Sarney, a long time leader of the government party in the Senate, had played a key role in leading government supporters to join the opposition.

Neves, who was 74, fell desperately ill on the eve of his scheduled inauguration in March 1985. When Neves died in late April, before he could assume office, Jose Sarney was sworn in as president. Sarney immediately faced two momentous problems: the economic crisis and the need to continue the transition to a fully democratic regime by instituting a new constitution that would reestablish democratic institutions.

Inflation in 1985 approached 300 percent, the foreign debt continued to mount, and strikes broke out across the country as workers demanded higher wages. In a drastic effort to stabilize the economy, Sarney introduced the Cruzado Plan in February 1986. The plan froze prices and wages and it brought Sarney to the peak of his popularity when inflation ground to a standstill for a few months. Unfortunately, when the government unfroze prices and wages at the end of 1986, inflation exploded again. Interest payments on the foreign debt gobbled up nearly all of the countryís huge trade surplus, draining the economy of badly needed capital. The government incurred large deficits in public spending, and foreign banks refused to extend new loans until the government implemented an economic austerity program.

The Congress elected in November 1986 drafted a new constitution that went into effect in October 1988. The constitutionís provisions gave wider power to the legislature and decreased the influence of the executive branch, granted more tax revenues to the states and municipalities, and extended the vote to 16-year-olds. It eliminated the electoral college established by the military regime and allowed Brazilians to vote directly for president.

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