Brazil

PRESIDENT Kubitschek’s determination to build Brazil a new capital and to move to it from Rio de Janeiro during his five-year term of office is about as good a symbol as any of this country in a hurry. Large sums of money are going into the construction of what is likely to be the world’s most modern, most monumental, and perhaps best-planned city. Careful economists say that the country cannot afford such a huge expenditure during a dangerous inflationary period. But partisans of Brasilia, led by the President, maintain that a country of the size and wealth of Brazil cannot delay its development because of temporary financial difficulties.

Brasilia is not just a whim. Brazil’s Constitution of 1946, like earlier ones, provides for the removal of the capital to the “central high plateau.” The site chosen was determined four years ago with the advice of a firm of consultants from the United States, who looked for climate, water supply, availability of water power, and other features necessary for urban living but ignored existing communications and other conveniences of slower-developing communities. The new capital is in the state of Goias, six hundred miles north and inland from Rio de Janeiro, a hundred miles from any sizable population center, atop a 4000-foot plateau, with sparse brush and grassland characteristic of the surroundings.

Three years ago literally nothing man-made was to be found in the area of Brasilia; today an army of more than 20,000 workers and those needed to feed and service them live nearby, in what resembles a wild West town of the United States of the last century. Their sole occupation is laying out the streets and erecting the buildings of the new capital, planned for half a million inhabitants.

Congress has decreed that the official move will lake place on April 21, 1960, and the President has announced that he will move on that day, even if with only part of the government. The visitor today— and all VIP’s flown to Brasilia to have a look have come away vastly impressed — finds a first-rate hotel, a habitable but incomplete presidential palace, and the skeletons of scores of ultramodern buildings rising from Brasilia’s red earth.

Opening up the west

The beginning of the opening up of the great Brazilian west is apparent from the roads under construction leading to the new capital. Except in the state of Sao Paulo, virtually no paved roads run inland in Brazil. Early construction in Brasilia had to be supplied largely by plane, and even cement was flown in. Roads are now rapidly being cut and paved to connect the new capital with Belo Horizonte and Rio de Janeiro, Santos and São Paulo on the south and east, with Belém at the mouth of the Amazon to the north, and Cuiabá to the west. Railway tracks are being laid to reach Brasilia from at least two directions.

In the move of the capital some observers see a psychological factor of considerable importance. They argue that Brazilian progress has been seriously retarded because Rio lies in a tropical playground, bordered by miles of the world’s most beautiful beaches, a physical reality hardly designed to stimulate constructive effort.

Some of the objections to Brasilia come from Cariocas who do not want to see the capital moved from their beloved Rio, and from political opponents who can see no good in anything the President does. A considerable number of thinking men, while recognizing the long-term benefits, are genuinely worried about the immediate deleterious effects on the economy.

Brazil’s expanding economy

Brazil’s all-but-galloping inflation shows few signs of slowing down. The country is suffering from a serious financial squeeze because of the size of the deficit in the balance of international payments, but the problems are growing pains, arising from a fast-expanding economy.

Brazil’s population of 64 million increases at the rate of 2.38 per hundred per year (the U.S. rate is 1.29). Vast fertile areas of the country lie fallow, yet Brazil has a hard time feeding itself because only a handfull of Brazilians and immigrants have been willing to move back more than a hundred miles from the sea.

Activity along the seaboard has never been livelier. The industrial boom has not been noticeably slowed down, and the machines require growing amounts of petroleum, steel, and other imports which Brazil does not yet produce in sufficient quantities. Proceeds from the sale of coffee, the principal export, are insufficient to pay for the imports Brazil needs. Other exports have not yet increased sufficiently to make up the difference, nor is the gap likely to be closed under the govern mends present financial policies.

For more than three years now, the inflationary spiral has been rising at the rate of 2 per cent per month despite the government’s heroic efforts to keep it within bounds. The minimum wage is held on one front, but prices also move up, and then wages have to move up. The Bank of Brazil tries to restrict credit on another front, but Brazil’s producers, who need credit in order to expand, sometimes bring irresistible pressures on the government to ease up.

The fact that two years ago the Matarazzo interests alone, consisting of 230-odd industrial establishments in the state of Sao Paulo, used more electrical energy than the entire country of Peru, gives some idea of the size of this growing industrial plant. The Matarazzos represent traditional Brazilian industry (food processing, metallurgy, tin-can manufacturing, textiles), but a whole new complex of industries is growing up. including the already giant automobile industry. Mercedes-Benz has been manufacturing trucks for nearly two years; Willys’ Jeep and Volkswagen are already producing. Ford s new truck plant was inaugurated in late 1958, and General Motors’ Chevrolet plant was completed early in 1959.

Most of the plants are beginning with about 60 per cent of the final product locally manufactured: within a few years schedules call for 90 to 95 per cent Brazilian manufacture. Over a thousand plants, many with new American and other foreign capital, are at work producing everything from valves to seat springs to crankshafts to meet the 90 per cent requirement. A billion dollars is said to have been invested in the industry to date.

The industrial plant is an insatiable giant that needs more and more capital to keep from starving. The retail trade also would nearly collapse without it. It is not unusual to see stores display merchandise with no identification of price other than the down and monthly payments. If you want to know what an item costs, you must ask.

The financial picture is undoubtedly gloomy, particularly as seen through bankers’ eyes, but Brazilians who point warning fingers find it practically impossible to awaken interest. Some ascribe this to apathy or to a large faith, as symbolized by the answer Brazilians will sometimes give when discussing problems: All will work out in the end, because “God is Brazilian.”

Political changes

The new Congress, which convened on March 15, is a reflection of the more stable political picture. The elections last fail renewed the entire Chamber of Deputies, a third of the Senate, and eleven of the governors of Brazil’s twenty states, They were remarkable on a number of counts. The Social Democratic Party (PSD) — the administrative party - lost a few Senate seats and several key governorships, and its ally, the Brazilian Labor Party (PTB), gained a few seats in the Chamber and several key governorships, while the National Democratic Union (UDN), the principal opposition party, also gained, to make the three leading parties more equally matched.

The alliance between the PSD and the PTB continues to be a somewhat uneasy one, since the former is in some respects even more conservative than the UDN. The marriage was one of convenience, and convenience may in the future dictate a change in alignments. The UDN, which before the elections harbored extremists who thought in terms of violence to reach power, now sees political control possible through peaceful means and is beginning to show a more statesmanlike approach to national problems. Thus the more stable political situation.

A long-held myth was exploded as a result of several key elections in the Federal District (Rio de Janeiro) and in the state of São Paulo. This was the dangerous belief, assiduously cultivated by the Communists and held by many political leaders, that Communist support is needed to win elections, despite the fact that the Communist Party has been illegal in Brazil since 1947. In the senatorial race in the Federal District, colorless but dependable Alfonso Arinos of the UDN easily defeated Lutero Vargas, who in addition to being the son of the late Getulio, still the idol of the Brazilian masses, had open Communist support. This support obviously did more harm than good.

The other encouraging aspect of the elections was the fact that many of the ultranationalists who had built their legislative imputations on anti-Americanism and ultranationalism were repudiated by their constituents.

Lines are already being drawn for the 1960 presidential race. The Administration party had a presidential hopeful in Amaral Peixoto, party president and for several years ambassador in Washington. His long absence from Brazil contributed to his defeat in his race for the Senate last October, which virtually eliminates him from the big try. It leaves the party with no real contender visible on the scene.

Apparently the least concerned of all the hopefuls is Janio Quadras, that enigmatic rabble-rouser who conducted a largely conservative administration in his four years as governor of Brazil’s wealthiest state. Elected deputy from the state of Parana in the present Congress, Quadras asked immediately for six months’ leave and set out on a trip to the Far East, the Middle East, Europe, and the United States. As the leading candidate for the presidency, he is receiving red-carpet treatment in many of the countries he is visiting and excellent publicity in the Brazilian press.

Operation Pan America

On the international front, Brazil’s energies are today divided between trying to make Operation Pan America a success and exploring the possibilities of expanding trade relations with the Soviet and neutralist blocs. Both attitudes reflect Brazil’s economic difficulties.

Operation Pan America was launched by President Kubitschek shortly after the ill-starred visit of Vice President Nixon to Latin America, to help the United States in its moment of trial (Nixon did not visit Brazil). It is envisioned as a program to assist the development of Latin America, and thereby to remove differences which were straining political relations between the area and the United States. At the same time, it would combat the Communist economic and propaganda offensive. Judging by the numerous speeches being made by Brazil’s highest officials, it would appear that the Administration is placing great store by OPA.

Negotiations for expanded commercial relations with the Communists and neutralists continue as a symbolic anchor to windward. There is talk about renewing diplomatic relations with the Soviet Union, but high Brazilian officials have let it be known that this will not happen until machinery to cope with the type of subversion which crops up around Soviet diplomatic or commercial representatives is adequate for the needs.

The appointment of John Moors Cabot as United States ambassador was enthusiastically welcomed by the professionals who best know the workings of the United States government. His competence and deep understanding of inter-American affairs (among a long list of his assignments in the area, he was assistant secretary of state for inter-American affairs in 1953-1954) assure a firm basis from which to improve relations between Brazil and the United States.