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A purely analytical perception...


BRAZIL

AN ACCIDENT WAITING TO HAPPEN

 

Continued from page 6

PRIVATIZATION, THE ONLY HOPE

Many Brazilians believe that as they sell off their government industry to privatization, money will roll in allowing problems such as medical care, police brutality and infrastructure deficits to be taken care of. While we too would wish that would occur, we became less than sanguine when reading a recent report covering the results of what government officials termed a successful privatization.

Brazil sold its telephone company, Telebras for a goodly sum, $19 billion. The Brazilian Government is on record relative to the fact that it uses the money derived from privatization's for financing the deficit in its external current account balance of payments. This is not a bad idea as it has a stabilizing effect on the Brazilian Currency as well as reducing the country's foreign debt. The President who is running for election again shortly and in an attempt to win a few extra votes announced that he would use part of the $19 billion to beef up public spending. There are two problems with this, the first is the government doesn’t get the whole $19 billion, they only get 60% of it, with the rest paid over a period of time, the other problem is that the law doesn’t allow him to do it.

One of the President's spokesman had another idea, he announced that the money would be used to pay off internal debt and the interest savings would be used to help drought victims in Brazil's hard hit northeast. That doesn’t seem to wash either and in both cases the people that made the announcements knew better. It may be that they thought that no one would be the wiser,

Universally, there was some anticipation that at least the country would have phones that would stretch across the land for the first time. But what good is that if you can't get from here to there?

 

BRAZIL ENDNOTES

 

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