BRAZIL'S DEBT CRISIS BECOMING POLITICAL CRISIS
Brazil's financial crisis is rapidly
becoming a political and social crisis, and President Jose
Sarney faces increasingly serious questions about his future.
    As Brazil enters debt talks with creditors in the United
States this week, political analysts say Sarney's
administration has never appeared weaker.
    The full political price which Sarney will have to pay for
the failure of the much-vaunted anti-inflation Cruzado Plan is
still not clear. He might have to pay with the presidency.
    Calls are increasing for direct presidential elections to
pick a successor to Sarney early next year. The length of his
term will be decided by a Constituent Assembly, and Sarney has
been lobbying for a six-year term.
    Sarney came to power, without facing presidential
elections, in March 1985, when the military bowed out after 21
years of rule.
    Although there was wide public support for direct 
elections for president, the military as one of their last
acts, insisted an electoral college, where it felt it had more
influence, make the choice.
    The college chose Tancredo Neves, a popular politician who
headed the Brazilian Democratic Movement Party (PMDB), which
had opposed military rule.
    In part to smooth relations with the military, Neves chose
Sarney, a supporter of the generals, for the purely ceremonial
post of vice-president. But Neves died before he could take
office and Sarney took power.
    He won the grudging support of the PMDB and the Cruzado
Plan was wildly popular with inflation-weary Brazilians.
    But the Cruzado Plan failed and politics in Brazil has not
been the same.
    "The country is a rudderless ship," said a U.S. Diplomat,
echoing a common view that the government lacks any clear idea
of how to tackle the economic crisis.
    Sarney has appeared increasingly isolated, with criticism
coming from the business community, the trade unions, some of
the military, the media and political opponents.
    Many businessmen are unhappy with Sarney's decision
announced on February 20 to suspend interest payments on 68
billion dlrs of foreign debt.
    A motor industry executive said: "The business community
thinks Brazil should go to the IMF. Their rules are sometimes
harsh and strict, but this is the only way to put the house in
order."
    Trade unions generally support the debt moratorium, but
disagree with other aspects of government policy. Since the end
of February they have organized national strikes of seamen,
bankworkers and federal university teachers and countless local
stoppages and protests.
    Economic problems have prompted criticism from some
military figures, including the last army ruler, General Joao
Figueiredo. It is a sign of the times that almost daily
military men deny there is going to be a coup.
    If the army does stay in the barracks, the key arbitors of
Sarney's fate will be the PMDB's leaders. So far, they have not
taken a clear stand on the issue of direct elections.
    But one PMDB leader, Senator Affonso Camargo, pointedly
said yesterday that it was the sovereign right of the
Consituent Assembly to call direct elections for the presidency
whenever it wished.
    In the media, Sarney has to contend with strong criticism.
    One senior political commentator, Fernando Pedreira of the
Jornal do Brasil, wrote in the newspaper last week:
    "President Sarney is ... a man of good intentions, but it
is just possible that he himself is not aware of the true state
of the country and the people since the immense failure of the
Cruzado Plan.
    "The disappointment, the frustration, the irritation, the
enticement have been (and continue to be) too great, too
profound."He called for direct elections early in 1988 as the
only way out of the present crisis.
    One of Sao Paulo's leading news magazines, Senhor, said in
an editorial this week: "The anarcho-populist government of
President Jose Sarney has failed. Two years have already been
too long for such a disastrous experience.
    "It deserves to be buried as quickly as possible. The
natural solution: direct elections soon."
    The government's inability to control inflation is now
bringing with it serious social problems.
    An explosion in rents in Sao Paulo has thrown tens of
thousands of families onto the streets because they can no
longer afford to pay even for a wooden shack in the slums.
    The local press says the city is experiencing the biggest
wave of land invasions in its history.
   According to rental agencies, rents have increased 500 pct
in little more than a year. Even the cheapest shacks now cost
2,000 cruzados (90 dollars) a month, half as much again as the
minimum wage, which is all that many earn.
    Cardinal Paulo Evaristo Arns, the Roman Catholic archbishop
of Sao Paulo, warned yesterday of the possibility of "a social
conflict of unimaginable proportions."
    With his back to the wall politically and with social
tensions rising, Sarney is no position to compromise on debt.
 Reuter
