O neoliberalism in Brazil it begins with the government of Fernando Collor de Mello and is consolidated with the arrival of Fernando Henrique Cardoso as president.
There was a reduction in public investments and privatization of state companies.
Summary
With the end of the military dictatorship, Brazil needed to end the main economic problem: inflation. Brazilian industry was also lagging behind the technological advances of other Western countries.
For this, Collor de Mello proposes the creation of a new currency, change of labor laws, opening of the national market and privatization of state-owned companies. These measures became known as the Color Plan.
In order to open Brazil to international markets, the country participated in the foundation of some regional economic blocks such as the Mercosur.
However, due to accusations of corruption and the impeachment suffered in 1991, President Collor cannot carry out his ideas.
In this way, President Itamar Franco calls Senator Fernando Henrique Cardoso to be Minister of Finance. In this folder, Cardoso would outline the
Real plan which ended inflation in Brazil and stabilized the economy.FHC government
With the success of Plano Real, Fernando Henrique Cardoso won the elections for president in 1994 defeating Luís Inácio da Silva, known as Lula.
With the arrival of Cardoso to power, the State took on another role. From the developmentalist state and large investor, as was the case with Getúlio Vargas, JK and the military dictatorship, the state would become a regulator.
Therefore, several regulatory agencies were created in order to dictate the rules for new companies that started operating in the country. For example: as state telephony was abolished, private companies had to submit to Anatel in order to operate in Brazil.
Thus, FHC was able to implement neoliberal ideas in Brazil that included:
- Privatization of state telephony such as Telebras, Telerj, Telesp, Telemig, etc. and the national company Embratel;
- Sale of state banks such as Banerj, Banestado, Banesp, etc.
- Privatization of companies such as Embraer, Vale do Rio Doce and Companhia Siderúrgica Nacional, among others;
- 20% reduction of public employees at the federal and state level through early retirement or dismissal;
- Outsourcing of workers and various state services;
- Opening of the national market to foreign companies.
Consequences
The consequences of neoliberal policy in Brazil can still be felt today.
despite the Lula government having recovered the role of the State as an investor, sectors that were protected by the public power, such as education, saw investments decrease and the participation of private capital increased.
Likewise, the increase in concessions for foreign companies to operate in Brazil. The concession is not privatization. It is just a matter of granting the investor the operation of a service under certain conditions. Currently, several Brazilian highways work in this way.
read more:
- neoliberalism
- Washington Consensus
- Fernando Henrique Cardoso
- Economic Crisis in Brazil
- economic liberalism
- economic globalization
- The History of Brazil
- Welfare State
