SARNEY MEETS BRAZIL BUSINESS LEADERS
President Jose Sarney, whose handling
of the economy is under attack at home and abroad, has held
private talks with Brazilian business leaders worried that
government policies are leading to recession.
    Over an informal barbecue at a farm outside Sao Paulo owned
by millionaire entrepreneur Matias Machline, Sarney met more
than 20 businessmen for discussion on Brazil's economic crisis.
    Business leaders said before the meeting they would be
pressing for less government interference in what they describe
as a tightly regulated economy.
    Their concerns include the country's high rates of interest
and tough restrictions on imports.
    Machline, president of the Sharp electronics group and a
personal friend of Sarney's, told television reporters outside
his farm that he wanted "less government participation in the
economy."
    When the government announced a month ago that it was
suspending interest payments on Brazil's 68 billion dlr debt to
commercial banks, it said this was a means of ensuring growth
and avoiding recession.
    But business leaders and economic analysts say there are
growing signs that Brazil's economy, the eighth biggest in the
non-communist world, is heading for a downturn after 8 pct
growth last year.
    Businessmen are deeply concerned about the effect on
industry of import restrictions introduced earlier this year
because of the country's deteriorating trade balance.
    Cacex, the foreign trade department of the federally owned
Banco do Brasil, has told companies they must limit their
imports to 90 pct of what they imported in 1985.
    Business sources say that in practice importing even this
amount is difficult and they have to haggle with Cacex on a
case-by-case basis.
    The business daily Gazeta Mercantil reported that in many
sectors of the economy there was a real fear that production
lines would grind to a halt next month.
    One of those attending the talks was Mario Amato, head of
the powerful Sao Paulo State Industries' Federation (FIESP).
    Business sources said he would argue that unless there were
a relaxation in import controls a sharp downturn in industrial
activity was inevitable.
    Relations between Sarney and the business community have at
times been strained and the existence of these tensions pointed
up the importance of the meeting.
    In one bizarre dispute in January, Sarney surprised
Brazilian business leaders by declaring that they were allies
of the 19th century anarchist Mikhail Bakunin. This outburst
came after Amato warned that companies might start disobeying
government regulations on price controls.
    Brazilian press reports made much of the fact that Finance
Minister Dilson Funaro, chief architect of the government's
economic policy, had not been invited to the gathering.
 REUTER
