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History, The Cardoso Presidency

Fernando Henrique Cardoso, PSDB, Brazilian police, total vote, runaway inflation

President Franco paved the way for the election of his successor, Fernando Henrique Cardoso. One of Latin Americaís most prominent intellectual figures, Cardoso was trained as a political sociologist at the University of Sao Paulo in the late 1950s and early 1960s. A former member of the Communist Party, Cardoso spent part of the 1960s and 1970s in exile. During the late 1970s he entered politics, eventually becoming a senator from the state of Sao Paulo and an unsuccessful mayoral candidate for the city.

Franco chose Cardoso as his finance minister in 1993 in yet another effort to combat runaway inflation and the debt crisis. Cardoso and a team of advisers put together the Real Plan. This plan created a new currency, the real, in 1994 and put into place a series of measures to reduce inflation without wage or price freezes. Inflation dropped from a rate of 45 to 50 percent per month in early 1994 to a rate of about 1 to 2 percent per month over the next two years, giving Brazilians their lowest inflation rates in decades.

The success of the plan made Cardoso a national hero and the leading contender for the presidency. Cardoso forged a coalition of his Brazilian Social Democratic Party (PSDB), the conservative Liberal Front Party (PFL), and several other parties. The former Communist convinced the business community and conservatives that his views had evolved, and were close enough to theirs to gain their support. With nearly 55 percent of the total vote in the November 1994 elections, Cardoso scored the most impressive electoral victory in 40 years.

Inaugurated on January 1, 1995, President Cardoso forged a majority coalition in Congress that passed fundamental legislative reforms during his first two years in office. This legislation on federal expenditures dramatically reduced government involvement in the economy. The government privatized major state enterprises, broke up the government-controlled telecommunications monopoly, and eliminated restrictions limiting the amount of money foreign corporations could invest in Brazil. The government also reduced expenditures in a number of social security programs and eliminated job security among civil servants in an attempt to reduce government expenditures.

Cardoso also worked to reduce tensions between landowners and the homeless squatters, who occupied large unproductive estates in the countryside. With 1 percent of the population owning 45 percent of the land in 1995, Brazil had the most unequal land distribution pattern in Latin America. Conflicts over land use and ownership led to a number of violent confrontations in 1995 and 1996 in which more than 40 people were shot and killed by Brazilian police. In November 1995 Cardoso signed a presidential decree that took possession of just over 100,000 hectares (250,000 acres) of land from large, private estates and reallocated it to more than 3,600 poor families.

In January 1996 Cardoso signed a more controversial presidential decree that allowed non-Native Americans to appeal land allocation decisions made by Brazilís Indian Affairs Bureau. Cardosoís decree allowed regional governments, private companies, and individuals to challenge indigenous land claims in certain areas of the country, primarily in the Amazon region of northern Brazil. The law was widely condemned by human rights, Native American, and religious organizations.



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