The lost decade and the Brazilian government's response in the 1990s

Journal of Developing Areas

Volumn 33, Issue 1, 1998, Pages 1-52

  Valença, Márcio Moraes ^a,b  

^a FEDERAL UNIVERSITY OF RIO GRANDE DO NORTE   (Brazil)

^b LONDON SCHOOL OF ECONOMICS   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

DEVELOPMENT STRATEGY; ECONOMIC POLICY; POLITICAL ECONOMY;

BRAZIL;

EID: 0345493742     PISSN: 0022037X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (140)

1. Ministerial changes were commonplace in Brazilian history, but during his presidential campaign, Collor had promised that his cabinet would be the same from the beginning to the end of his term of office.
2. See Márcio M. Valença, "The Politics of Giving in Brazil," Latin American Perspectives (forthcoming), for a consideration of the political development of Brazil during Collor's brief passage through power. Here, the extent to which Collor's actions distanced him from his "modernity" rhetoric, and his political strategy involving and making use of clientelistic forms of political mediation vis-à vis his fragile position in relation to the National Congress are also discussed.
3. In late 1998 (just as this issue of the JDA was being readied for printing) Fernando Henrique Cardoso was to be reelected as president of Brazil for an unprecedented second term.
4. Fernando H. Barbosa and Manuel S. La Cal, "Crescimento econômico e renegociação da dívida externa," Revista de Economia Político 12 (January-March 1992): 19-42;
5. Lourdes Sola, "Heterodox Shock in Brazil: Técnicos, Politicians, and Democracy," Journal of Latin American Studies 23, part 1 (February 1991): 163-95;
6. Susan Strange, "The New World of Debt," New Left Review 230 (July-August 1998): 91-114.
7. Hans W. Singer, "Lessons of Post-war Development Experience: 1945-1988," Institute of Development Studies Discussion Papers 260 (UK: University of Sussex, April 1989): p. 1.
8. See also Hans W. Singer, "Editorial: The Golden Age of the Keynesian Consensus - the Pendulum Swings Back," World Development 25, no. 3 (1997): 293-95.
9. To a certain extent coinciding with the line of argument pursued by Fernando H. Cardoso and Enzo Faletto, Noam Chomsky shows the usefulness of dictatorial regimes in pushing forward U.S. economic interests, for instance, in the case of the U.S.-backed military dictatorship in Brazil. See Fernando H. Cardoso and Enzo Faletto, Dependency and Development in Latin America (London: University of California Press, 1979);
10. Noam Chomsky, "Power in the Global Arena," New Left Review 230 (July-August 1998): 3-27.
11. See also Andre Gunder Frank, Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil (Harmondsworth, UK: Penguin Books, 1971).
12. Hans W. Singer, "Lessons of Post-war Development Experience."
13. Although negotiated in Havana in 1947 and 1948, the organization was not ratified by the United States. See Hans W. Singer, "Golden Age of the Keynesian Consensus."
14. See also Ann Pettifor, "The Economic Bondage of Debt - and the Birth of a New Movement," New Left Review 230 (July-August 1998): 115-22.
15. From the 1970s, governments needed to provide security for the loans of domestic companies, public and private alike.
16. Cf. Financial Times (London), 30 July 1992.
17. It is worth noting that some indebted countries were producing exports after investing earmarked money that was obtained from multilateral and government agencies. Some markets became increasingly saturated, forcing prices down further.
18. Alain Lipietz, "How Monetarism Shocked Third World Industrialization," New Left Review 145 (May-June 1984): 71-87;
19. Alain Lipietz, Mirages and Miracles: The Crisis in Global Fordism (London: Verso, 1987).
20. The fear of the contagion reemerged following Mexico's 1994 crisis and the 1997-98 Asian crisis. Hence the "rescue" packages. For Susan Strange, in 1982, creditors precipitated the crisis following Mexico's default. See Strange, "New World of Debt."
21. Howard P. Lehman, "Strategic Bargaining in Brazil's Debt Negotiations," Political Science Quarterly 108 (Spring 1993): 133-55.
22. Plínio de Arruda Sampaio Jr., "Auge e declínio da estratégia cooperativa de reciclagem da dívida externa," Novos Estudos CEBRAP 25 (October 1989): 118-35.
23. Pettifor, "Economic Bondage of Debt."
24. Lehman, "Strategic Bargaining."
25. Gilson Schwartz, "Reforma versus ajustamento - O dilema da política econômica recente," Novos Estudos CEBRAP 24 (July 1989): 147-65.
26. Richard E. Feinberg, "Defunding Latin America: Reverse Transfers by the Multilateral Lending Agencies," Third World Quarterly 11 (July 1989): 71-84.
27. Arruda Sampaio Jr. "Auge e declínio," pp. 126-27.
28. Feinberg, "Defunding Latin America."
29. The Inter-American Development Bank (IDB), in particular, is a smaller, U.S-dominated agency, with U.S. personnel holding key positions and veto power over individual loans.
30. The Paris Club, or the Group of Ten, includes the United States, the United Kingdom, Germany, France, Belgium, the Netherlands, Italy, Sweden, Canada, and Japan.
31. Feinberg, "Defunding Latin America."
32. Pettifor, "Economic Bondage of Debt."
33. See also Alan Gilbert, "The Provision of Public Services and the Debt Crisis in Latin America: The Case of Bogotá," Economic Geography 66 (October 1990): 349-61.
34. Gilbert, "Provision of Public Services," p. 358.
35. Strange, "New World of Debt."
36. Chomsky, "Power in the Global Arena," p. 25.
37. Pettifor, "Economic Bondage of Debt," pp. 119-20.
38. Paulo N. Batista Jr., "Formação de capital e transferência de recursos ao exterior," Revista de Economia Político 7 (January-March 1987): 23.
39. See Wilson Cano, Reflexōes sobre o Brasil e a nova (des)ordem internacional (Campinas: Editora da UNICAMP, 1993);
40. José Luis Fiori, "O nó cego do desenvolvimentalismo brasileiro," Novos Estudos CEBRAP 40 (November 1994): 125-44.
41. Márcio M. Valença, "Brasil - Urbanização e constituição dos fatores para a industrializaçāo (1890-1930)," Cadernos do CEAS 123 (September-October 1989): 64-77.
42. Cano, Reflexōes sobre o Brasil.
43. Hans W. Singer, "Lessons of Post-war Development Experience," p. 17.
44. Thomas E. Skidmore, "Politics and Economic Policy Making in Authoritarian Brazil, 1937-71," in Authoritarian Brazil - Origins, Policies, and Future, ed. Alfred Stepan (London: Yale University Press, 1977).
45. Paul Singer, "The Regional Impact of the NIDL (New International Division of Labour): The Case of Brazil" (paper presented at a conference on the Urban and Regional Impact of the New International Division of Labor, sponsored by the International Sociological Association (ISA)/CUSUP and held in Hong Kong, 14-20 August 1985).
46. Factions within the military thought that in view of the political "decompression" being put into effect, further economic development would maintain the coalition as such.
47. Alkimar R. Moura, "Rumo à entropia: A política econômica, de Geisel a Collor," in De Geisel a Collor: O balança da transição, ed. Bolívar Lamounier (São Paulo: Sumaré/CNPq, 1990), pp. 37-59.
48. Arruda Sampaio Jr., "Auge e declínio."
49. Because the Brazilian Constitution only allowed changes to the tax system to take place in the next fiscal year, these measures were later seen as a preparation for the Cruzado Plan in February 1986.
50. Banco Central do Brasil (hereafter BCB), Relatório 1986. This is an annual report of the BCB, which is published in the year subsequent to the title year.
51. Joāo Carmo Oliveira, "Performance and Perspective of Brazilian Macro-economic Policy during the Transition," Bulletin of Latin American Research 6, no. 2 (1987): 217-32.
52. See also Luiz Carlos Bresser Pereira, "A inflação decifrada," Revista de Economia Política 16, no. 4 (1996): 20-35.
53. Moura, "Rumo à entropia."
54. Paul Singer, "Regional Impact of the NIDL," pp. 20-21.
55. Batista Jr., "Formação de capital."
56. Ana Cristina Fernandes, Stabilisation, Exports, and Regional Development in Brazil: The Northeast in the 1980s, Research Papers in Geography, no. 8 (Brighton, UK: University of Sussex, March 1993) .
57. Referring to "Reaganite" barriers, Chomsky writes: "For much of the Third World, it's a disaster: a UN development report estimates that, annually, the Third World loses about half a trillion dollars from various forms of First World protectionism and market intervention" (Chomsky, "Power in the Global Arena," p. 19, his emphasis).
58. Marcelo P. Abreu, "Anglo-Brazilian Economic Relations and the Consolidation of American Pre-eminence in Brazil, 1930-1945," in Latin America, Economic Imperialism, and the State: The Political Economy of the External Connection from Independence to the Present, ed. Christopher Abel and Colin M. Lewis (London: Athlone Press, 1985), pp. 379-93.
59. The energy sector was being privatized at the end of the 1990s; the steel sector was almost entirely privatized early in the 1990s.
60. After the Cruzado Plan, in 1986, the Sarney government imposed restrictions on this scheme.
61. BCB, Relatório 1986, p. 94.
62. Fernando W. Magalhães, Eduardo F. Ohana, Geraldo Pereira Jr., and Paulo Zolhof, "Dívida externa brasileira: Diagnóstico e perspectivas," in Para a década de 90: Prioridades e perspectivas de políticas públicas (Políticas macroeconômicas e setoriais 1) (Brasília: IPEA/ IPLAN, 1989), pp. 29-52.
63. BCB, Relatório 1989.
64. From 1973 to 1979, oil imports were 35 percent of total imports. Some US $2.1 billion (bn) extra every year were needed to cover this extra cost.
65. Magalhães et al., "Dívida externa brasileira."
66. Reading the tables is not always straightforward. Changes in the methodology for calculations and variations in both interest and international exchange rates, as well as default, rescheduling, and so on, all make the figures oscillate from year to year. Notwithstanding, the figures serve as an indication and illustration.
67. BCB, Relatório 1985.
68. In November 1979, the first macrodevaluation (of 30 percent) was announced. The measure was used as a protective counterbalance to the pre-fixing of monetary correction for 1980 at 40 percent. (At the end of the period, real inflation was twice as great.)
69. Brasil, Brasil: Um projeto de reconstrução nacional: Presidente Fernando Collar (Brasilia, 1991).
70. According to Bresser Pereira and Nakano, Brazil's international credits during the 1970s were in the region of 2 percent of the country's gross domestic product (GDP) per year; in the 1980s, net yearly transfers to creditors abroad reached 4 to 5 percent of GDP. See Luiz Carlos Bresser Pereira, and Yoshiaki Nakano, "Hiperinflação e estabilização no Brasil: O primeiro Plano Collor," Revista de Economia Político 11 (October-December 1991): 89-114.
71. Cf. Barbosa and La Cal, "Crescimento econômico";
72. and Arruda Sampaio Jr., "Auge e declínio." See also table 7.
73. Lídia Goldenstein, "Rambo vem aí," Novos Estudos CEBRAP 26 (March 1990): 39-43.
74. See Osvaldo M. Iazzetta, "Capacidades tecnicas y de gobierno en las privatizaciones de Menem y Collor de Mello," Desarrollo Económico 37, no. 146 (1997): 263-85 .
75. See also Francisco de Oliveira, "A herança do marajá superkitsch," Novos Estudos CEBRAP 34 (November 1992): 8-14.
76. Financial Times, 23 March 1990;
77. The Independent (London), 23 March 1990.
78. John Crabtree, "The Collor Plan: Shooting the Tiger?" Bulletin of Latin American Research 10, no. 2 (1991): 119-32.
79. Luiz Gonzaga M. Belluzzo and Paulo N. Batista Jr., "Movimento de capitais, instabilidade monetária e desequilíbrio fiscal: um post-mortem da política econômica do Governo Collor," Análise Conjuntural 20 (November 1992): 46-57.
80. Moura, "Rumo à entropia."
81. But the TR (Taxa Referencial de Juros) that replaced the BTN (Bônus do Tesouro Nacional) in March 1991 did not fully account for inflation, but followed the government's expected future inflation. This meant that at the time of withdrawal, the ratio of cruzado novo to cruzeiro was no longer 1 to 1 as at the time of the launching of the plan. This resulted in substantial losses for those who had their savings blocked by decree and somehow did not manage to release them.
82. BCB, Relatório 1990.
83. The Independent, 23 March 1990, p. 19.
84. Bresser Pereira and Nakano, "Hiperinflação e estabilização no Brasil."
85. Both tables should be viewed with care, especially the first, which shows the short-term trend. The figures, though, illustrate the drop in economic activity after Collor's first economic plan and reveal the low level of economic activity that operated thereafter.
86. Conjuntura Estatística, p. 11, in Conjuntura Econômica, April 1993.
87. Conjuntura Econômica, February 1991, p. 127.
88. Conjuntura Econômica, March 1990.
89. Ben Ross Schneider, "A privatização no governo Collor: Triunfo do liberalismo ou colapso do Estado desenvolvimentista?" Revista de Economia Política 12 (January-March 1992): 5-18.
90. The official justification for the closure of the Serviço National de Informaçāo (SNI) was its bad record and association with the military's apparatus of repression. The closure was presented as an example of liberalism and modernity. The unofficial explanation was that Collor needed to get rid of controls. This was also a biased decision. Because Collor attacked Sarney in such a crude manner during the presidential campaign, the SNI was allegedly activated into investigating Collor's business, political, and personal life. The full Collor dossier prepared by the SNI was only circulated much later, however, during the congressional investigation into Paulo Cesar Farias (known as PC) and the so-called PC-businesses. PC was Collor's personal friend and acted as treasurer of his presidential campaign. See also Jorge Zaverucha, "The Degree of Military Political Autonomy during the Spanish, Argentine, and Brazilian Transitions," Journal of Latin American Studies 25, part 2 (May 1993): 283-99;
91. see also Valença, "Politics of Giving in Brazil" (forthcoming).
92. The actual figures are not precise, though. See Ben Ross Schneider, "Brazil under Collor: Anatomy of a Crisis," World Policy Journal 8 (Spring 1991): 321-47.
93. See also Financial Times (23 March 1990).
94. Iazzetta, "Capacidades tecnicas y de gobierno."
95. See, for instance, Antônio Delfim Netto, "O desemprego é a âncora do Real," interview in Jornal dos Economistas (1998).
96. Instituto de Estudos para o Desenvolvimento Industrial (hereafter IEDI), "Trajetória recente da indústria brasileira," in Relatório Institucional (São Paulo: IEDI, 1998).
97. Interview for Veja, 15 September 1993.
98. Iazzetta points out that the process of privatization in Brazil takes longer than in other parts of the globe (his basis for comparison is Argentina), because privatization is in the hands of the Banco Nacional de Desenvolvimento Econômico e Social (BNDES), which is a development bank, technically sound, with bureaucratic insulation, and thus immune to political interference. The process has, in this way, taken some time to allow all procedures to be followed and all conditions to be met in a transparent mode, according to established legislation (see Iazzetta, "Capacidades tecnicas y de gobierno").
99. Veja, 15 September 1993.
100. Itamar took over from Collor following his impeachment at the end of 1992. See Valença, "Politics of Giving in Brazil" (forthcoming).
101. BCB, Relatório 1991.
102. Valença, "Politics of Giving in Brazil" (forthcoming).
103. This section appears as a response to one referee's comments that the paper should also address the major post-1993 turnaround, in which the country has allegedly coped well in tackling inflation. I took this opportunity to further evaluate the Collor period in the light of new developments during the government of Fernando Henrique Cardoso (FHC).
104. See Bresser Pereira, "A inflação decifrada." Here, Bresser Pereira, Minister of the Administration and the Reform of the State under Cardoso, reviews the debate about the Theory of Inertial Inflation, which served as the theoretical basis for the "heterodox shocks" that had been taking place since the Cruzado Plan in 1986, and not least so for the Real Plan. Bresser Pereira credited mostly himself, but also his associate Yoshiaki Nakano at the Fundação Getúlio Vargas in São Paulo and a group of economists at the Pontífica Universidade Católica in Rio de Janeiro, with the authorship of such theory.
105. Schwartz, "Reforma versus ajustamento."
106. Sola, "Heterodox Shock in Brazil."
107. Bresser Pereira, "A inflação decifrada," also refers to this as "administrative control."
108. See Valença, "Politics of Giving in Brazil" (forthcoming).
109. See also David Fleischer, "Political Corruption in Brazil: The Delicate Connection with Campaign Finance," Crime, Law, & Social Change 25 (1997): 297-321.
110. President Fernando Henrique Cardoso in an interview with James F. Hoge Jr., "Fulfilling Brazil's Promise: A Conversation with President Cardoso," Foreign Affairs 74, no. 4 (1995): 70.
111. The full passage is as follows: "It is important to place immediate and sustained attention on expanding economic growth and on containing inflation - which is the cruelest tax on the poor. This approach automatically produces some favorable results in alleviating poverty." And after recognizing that social programs are also necessary to solve the problem of poverty, he says: "The market solves problems for people already integrated into the economic order." The eminent professor, Hans W. Singer, in "Golden Age of the Keynesian Consensus," notes: "Although the Washington Consensus sometimes claims that inflation hits the poor more than the rich, this is an indirect and somewhat questionable link with human development" (p. 294).
112. See also the government's homepages at the Ministério da Fazenda, Ministério do Planejamento e Orçamento as well as the homepages at Banco Central do Brasil and Banco Nacional de Desenvolvimento Econômico e Social. See links at: www.ibge.gov.br.
113. The security cushion reassures the investors that their holdings nominated in dollars, once converted to real and invested in the country, will not be devalued.
114. Cf. Regis Bonelli, A Note on Foreign Direct Investment (FDI) and Industrial Competitiveness in Brazil, Texto para Discussão 584 (Rio de Janeiro: IPEA, August 1998).
115. IEDI, "Trajetória recente da indústria brasileira."
116. On the planned administrative reform, see Luiz Carlos Bresser Pereira, "Estratégia e estrutura para um novo Estado," Revista de Economia Político 17, no. 3 (1997): 24-38. While constitutional amendments are needed to proceed with a deeper administrative reform, the government has imposed a depressive incomes policy on civil servants and has selectively improved the salaries of civil servants now considered to be in the "strategic" core.
117. In Hoge, "Fulfilling Brazil's Promise."
118. Annual inflation rates (see INPC - Índice Nacional de Preços ao Consumidor) have been 21.98 percent in 1995; 9.12 percent in 1996; 4.34 percent in 1997; and 2.98 percent in the 12 months preceding October 1998. See [http://www.ibge.gov.br/informacoes/indices/ inpc1098.htm] (8 December 1998).
119. According to Chomsky, in the 1970s, 90 percent of the world's foreign exchange transactions were related to the real economy, that is, trade and investments. In the late 1990s, only 5 percent of this total related to the real economy; all the rest were speculative capital transactions, 80 percent being short-term (of a week or less) (see Chomsky, "Power in the Global Arena"). Given the concentrated effort made by Brazilian governments to attract foreign capital in recent years, especially during the FHC administration, Munhoz holds the opinion that Brazil was not a victim of a speculative attack: rather the country has created its own trap.
120. See interview of Dércio Garcia Munhoz, "Estamos sob uma ditadura civil," in Jornal dos Economistas 113 (September 1998).
121. Brazil saw a new surge of foreign direct investment (FDI) after 1992, especially, at first, of portfolio investment. In more recent years, FDI has been closely related to the privatization program. Before 1995, when a constitutional amendment was passed by Congress, there were strict limitations on foreign capital participation in the privatization program; both communications and petroleum were defined as government monopolies. FDI participation in the privatization program increased from 4.2 percent in 1995 to over 30 percent in 1997. FDI amounted to US 59.5 bn in 1996 and US $15.8 bn in 1997, when of the developing countries receiving FDI, Brazil ranked second only to China. By 1996, Brazil held the largest stock of FDI in the developing world (see Bonelli, Note on Foreign Direct Investment). Giambiagi and Reis show that FDI has been used more in financing the country's current account deficit than in adding to the country's gross fixed capital formation; thus the association of FDI with productivity should be viewed with caution.
122. See Fabio Giambiagi and Carla Reis, "Investimento direto: O Brasil se reinsere no mundo," Conjuntura Econômica, December 1997, pp. 29-32.
123. There is little information as to the amount of FDI that goes to actual physical investment. Most of it is related to mergers-and-acquisition operations, swaps of government bonds, the privatization program, and portfolio investment. Perhaps a blatant exception is the motor industry, but according to Bonelli (Note on Foreign Direct Investment), the sector has also increased its imports of components that before the trade liberalization were produced in the country.
124. Cardoso's party alone has a very narrow base as compared to the numbers needed to pass general bills in Congress, let alone approve constitutional amendments (which need a three-fifths vote). Cardoso had to build a coalition that includes his own "left-of-center" party with a number of "right-of-center" and "right-wing" parties, most (if not all) of which are national parties with strong regional sects operating on the basis of clientelistic deals. No wonder Cardoso himself refers to this scenario as his "disorganized" majority in Congress; no wonder Cardoso has been unable to secure the approval of Congress for several bills sent or supported by the government (see also Hoge, "Fulfilling Brazil's Promise").
125. As elsewhere in the world, downsizing the government has meant public-sector cuts in employment, privatization, etc., but not necessarily a decrease in the involvement of government in pushing for economic development and distributing economic rewards. On the contrary, in order to finance the increased (and increasing) burden of servicing the debt, the government has raised taxes and cut expenditures in such crucial areas as health and education, and largely ignored critical areas like housing, sanitation, and urban development - especially where the needs in these areas affect the poor more than the rich.
126. No wonder the 1988 Constitution determined that the ceiling for interest rates must be 12 percent a year in real terms. (This measure, however, was never implemented as it depended on the drafting of new legislation to put it into effect.)
127. See IEDI, "Trajetória recente da indústria brasileira."
128. Munhoz, "Estamos sob uma ditadura civil."
129. It may or may not be relevant in the context of this paper that the major financial contributors to Cardoso's campaign funds in both his presidential runs were large banks and large construction companies. Cf Fleischer, "Political Corruption in Brazil."
130. Teotônio dos Santos, in "The Theoretical Foundations of the Cardoso Government: A New Stage of the Dependency Theory Debate," Latin American Perspectives 25, no. 1 (1998): 53-70, shows that contrary to general belief, Cardoso's current political position is consistent with his writings.
131. In Dependency and Development in Latin America, Cardoso and Faletto write: "When a political crisis in the system prevents an economic policy of public and private investment for development, the only alternatives are opening the market to foreign capital or making a radical political move toward socialism" (p. 155). The list of policies presented on p. 156 also shows Cardoso's awareness of the extent to which it is possible to play with the intra- and inter-national balance of political and economic interests to pursue policies of economic development that are beneficial to particular interests and unhelpful to others.
132. See Delfim Netto, "O desemprego é a âncora do Real." Delfim Netto also says: "There is, however, a problem: the plan was so successful that the debate on the undesirable consequences which the plan brought about for the Brazilian economy was blocked" (my translation).
133. George Soros and Anthony Giddens, "Beyond Chaos and Dogma (George Soros Talks to Anthony Giddens)," LSE Magazine, 9 July 1998.
134. See Valença, "Politics of Giving in Brazil" (forthcoming).
135. Early in December 1998, as this article was being prepared for press, Brazilian newspaper headlines recorded a major defeat and disappointment in Congress for Cardoso. In the midst of the Russian financial crisis, the Cardoso government, under a speculative attack, put forward an emergency plan to raise taxes and cut spending while a quick deal with the IMF was being drafted. Among the measures, the government proposed to raise from 11 to 20 percent the contribution that active civil servants made to the social security system and from 0 to 11 percent the contribution for retired (and pensioner) civil servants. At this same time, the majority of civil servants who were to pay more taxes had not had their salaries realigned to inflation, as determined by the Constitution, for over three years. The exceptions were those in what the government chose to define as the "strategic" core of the government. See Jornal do Brasil (Rio de Janeiro), 3 December 1998;
136. and Ministério da Fazenda, "Programa de Estabilidade Fiscal (Resumo)," Press Release, 28 October 1998.
137. Referring to the Brazilian case, Bonelli writes: "[F]oreign companies are now subject to the same legal treatment given to domestic ones; profits and dividends on foreign investment are exempt (since January 1996) from taxes on wages; portfolio investment repatriation is exempt from income tax; capital gains are exempt from any taxation - although profits and dividends are taxed" (Bonelli, Note on Foreign Direct Investment, p. 12).
138. According to rough calculations, to service its R $300 bn domestic debt, on the basis of the levels of interest rates throughout 1998, the government would need R $120 bn a year. Including the service of the foreign debt and other foreign reserves operations, the government would need R $12 bn a month to cover interest alone. Against that background is the fact that the government revenues are around R $11bn a month. See Munhoz, "Estamos sob uma ditadura civil."
139. Delfim Netto, "O desemprego é a âncora do Real."
140. See Strange, "New World of Debt."