Brazil is a federal republic, governed by a president with a bicameral congress and a judiciary under the Constitution of 1891. The elites of the pátrias, or autonomous centers of regional control, hold the real power, in particular in the states of Minas Gerais and São Paulo. Lack of inland transportation hinders integration, but Brazil prospers economically, exporting sugar, rubber, and coffee.
The economy expands under President Epitacio da Silva Pessoa. Industrial production, concentrated in the South and Southeast, increases rapidly. Coffee exports remain the economy's driving force. Immigrants working on coffee plantations seek better opportunities in urban areas. The lack of adequate infrastructure development triggers violent strikes against urban living and working conditions.
The most powerful pátrias in Minas Gerais and São Paulo continue to exert control over the federal government. With only 3 percent of the population voting, Washington Luis Pereira is elected president, unopposed. Brazil increases trade and financial ties with the U.S. Economic growth continues until the fall in world demand for coffee, overproduction, and the 1929 world financial crisis.
Dr. Getúlio Vargas, governor of Rio Grande do Sul state, leads a revolution with support from local elites to undermine the growing political power of labor. Vargas rules by decree until a newly formed constituent assembly elects him president under a new constitution in 1934. Vargas centralizes government, and the pátrias give up their power in return for federal protection of their interests.
Vargas imposes martial law to quell a communist revolt he fears could lead to a revolution, then declares a "state of war." He shuts down Congress, dissolves political parties, issues a new constitution for a fascist-inspired "New State," and becomes its dictator. The government nationalizes and centralizes industry. Repression and insufficient social reforms accompany strong economic growth.
Succumbing in part to international pressure, Vargas signs a new constitution, declares amnesty for political prisoners, and allows presidential elections. But the military, united by recent repression and its assistance to the Allies in WWII, stages a coup d'état to cut short the political mobilization of the masses. General Enrico Gaspar Dutra, former minister of war, becomes president in 1945.
Under a new, conservative constitution, Dutra's government drifts rightward, outlawing the Communist Party. The state intervenes minimally in the economy, focusing on infrastructure and education. A vast increase in imports exhausts savings from the war years. Inflation picks up. Advocating accelerated industrialization and expanded social legislation, Vargas wins the 1950 presidential election.
The military and elite fear President Vargas's populist leanings. Political polarization deepens. Deciding that foreign interests are too slow to develop Brazil's energy sector, Vargas creates the Brazilian Petroleum Corporation (Petrobrás). This controversial decision and charges of corruption undermine his administration. The military demands Vargas's resignation, and he kills himself in 1954.
President Juscelino Kubitschek pursues nationalist policies with military assistance. The capital is moved to the newly built central city of Brasília. The economy expands rapidly as public investment strengthens heavy industry and the highway network. Brazil becomes the world's number two food exporter. But economic growth brings a doubling of foreign debt, inflation, and growing inequality.
Nationally elected President Janio Quadros resigns within months when his proposed populist reforms face opposition from landowners, industrialists, and military leaders. His vice president, João Goulart, a populist and former minister of labor under President Vargas, is sworn in as president.
To appease military ministers opposed to Goulart, Congress turns the presidential system into a parliamentary one. Tancredo Neves is named prime minister. But Goulart mobilizes the masses and restores the presidential system by plebiscite in 1963. Rising inflation, lack of middle-class support, and a naval mutiny lead to a military-led revolt against Goulart, who flees to Uruguay.
Congress elects General Branco president. Pressured by the military and elites, Branco expands the president's powers and bans political groupings. His economic reforms do little to relieve inflation or discontent. His successor, Marshal Arthur da Coste e Silva, gives himself dictatorial powers, dissolves Congress, and suspends the constitution. A military junta takes over when he dies in 1969.
The military installs General Garrastazú Médici as president. Severe political repression and censorship accompany record annual economic growth of nearly 12 percent led by state-owned enterprises. A program of economic expansion includes vast projects such as the Trans-Amazonian highway and the world's largest dam at Itaipú, but does not provide for redistribution of wealth.
Médici's successor, General Ernesto Geisel, begins a program of distensão to move Brazil from authoritarian to democratic rule. Successive oil shocks disrupt economic growth, and Geisel opens the Brazilian oil sector to prospecting by foreign firms. Heavy external borrowing finances investment in infrastructure and industry. Geisel succeeds in imposing his successor, General João Figueiredo.
President Figueiredo opens up the political system, lifting the ban on political parties. The military reacts with terrorist acts, reinforcing the public's anti-military sentiment. Faced with soaring inflation, declining productivity, and mounting foreign debt, Figueiredo turns to the International Monetary Fund and imposes a painful austerity program, holding down wages.
When Figueiredo undergoes surgery, millions demand direct election of the next president. A new electoral college comprising members of Congress and six delegates from each state elects Tancredo Neves of the Brazilian Democratic Movement Party (PMDB). But Neves takes ill on the eve of his inauguration and dies a month later. Vice President José Sarney, a military-regime supporter, succeeds him.
Brazil begins a transition from authoritarian to democratic rule. A new constitution supports democratic government with universal suffrage by direct ballot. Massive domestic and foreign debt burden Brazil. Allegations of corruption and a series of unsuccessful stabilization plans that fail to curb inflation undermine Sarney's administration. Fernando Collor de Mello is elected president in 1989.
President Collor fails to provide clean government or economic growth. He privatizes several industries, but inflation and opposition rise. Accused of corruption, he is impeached. Vice President Franco succeeds him, but is poorly prepared to redress the floundering economy. In 1994 Finance Minister Fernando Henrique Cardoso is elected president, riding on the success of his stabilization plan.
Cardoso governs as part of a loose three-party coalition. His popularity soars as the Real Plan of 1994, combined with a strong economic policy that welcomes foreign and private investment, brings economic stability and renewed, albeit limited, growth. Cardoso is reelected despite massive capital flight and financial turmoil sparked by financial crises in Russia and Asia.
A devaluation and carefully planned-out stabilization measures ease Brazil out of its financial crisis. The economy recovers in part, and measures are put in place to control public spending. Political infighting, corruption scandals, and an energy crisis shake Cardoso's popularity. Economic conditions worsen in 2002. Veteran populist Lula da Silva becomes president amid high public expectations.
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