BRAZILIAN PLANNING MINISTER RESIGNS
Brazilian Planning Minister Joao Sayad
resigned, a presidential spokesman said.
    His resignation was accepted during a meeting with 
President Jose Sarney this afternoon, the spokesman said.
    No official reasons for the resignation were immediately
available, but sources close to the government said Sayad had
pressed for a three-month price freeze and sharp government
spending cuts to combat inflation.
    Neither Sarney nor Finance Minister Dilson Funaro accepted
the proposals, the sources said.
    Sayad was one of the architects of last year's "Plano
Cruzado" program, which froze prices, ended widespread
indexation of the economy and introduced the new cruzado
currency to replace the cruzeiro in a bid to cut the 250 pct
annual inflation rate.
    After holding prices for nearly nine months, the plan was
unable to withstand the inflationary pressures of booming
consumer demand and widespread shortages. In the first two
months of this year prices rose by around 30 per cent.
    A sharp deterioration in Brazil's foreign trade surplus
caused President Sarney to announce last month the suspension
of interest rate payments on 68 billion dollars of commercial
debt.
    Finance Minister Funaro told reporters last week new
measures to correct the economy would be announced within a
month, although he gave no further details.
    Earlier today U.S. Treasury secretary James Baker said 
Brazil should come up with a new economic plan if it hopes to
get additional assistance from commercial banks and others.
    Sayad's resignation might foreshadow other changes in the
Brazilian cabinet.
    Presidential spokesman Frota Netto told journalists earlier
today the government was considering a suggestion by the Chief
of Civilian Staff at the Presidency Marco Maciel that a new
multi-party cabinet be formed to deal with the country's
current economic difficulties.
 Reuter
