President Sarney works with Neves's Cabinet and policies, but he relies heavily on Senate floor leader Fernando Henrique Cardoso. A coalition of the Brazilian Social Democratic Party (PSDB), concentrated in the Southeast, the Liberal Front Party (PFL), concentrated in the Northeast, and the Brazilian Democratic Movement Party (PMDB), the country's largest umbrella party, holds power.
A new constitution supports democratic government with universal suffrage by direct ballot. Significant power devolves from the central government to state governors and from the president to Congress. Inflation and corruption allegations undermine Sarney's administration and the PMDB. Fernando Collor de Mello of the National Reconstruction Party (PNR) narrowly wins the 1989 presidential election.
President Collor advocates free-market policies and a crackdown on government corruption. Collor's coalition flounders as his promises to rid Brazil of inflation are not realized. Opposition grows. Amid allegations of corruption, Collor fires most of his Cabinet, but cannot distance himself from the accusations. In 1992 he is impeached, and Vice President Itamar Franco of the PFL takes his place.
President Franco lacks a clear strategy, and turnover in the Cabinet is high. Congress appoints a committee to investigate its own members and the executive branch in a corruption scandal. Franco fires those involved in the case, but loses the election to Fernando Henrique Cardoso of the center-left PSDB, whose Real Plan is redressing the economy. The PMDB loses strength.
Brazil's largest party, the PMDB, and the center-right Brazilian Progressive Party (PPB) join President Cardoso's governing coalition. Cardoso finds insufficient support for his legislative priorities due to weak party loyalty. Constitutional reforms in 1995 include changes in election and party legislation. Cardoso is reelected in 1998, defeating the Workers' Party, which gains seats in Congress.
Political infighting, corruption scandals within the governing coalition, and an energy crisis cause President Cardoso's approval rating to fall by half. A number of senators and deputies defect to the opposition. Support grows within the PMDB to launch its own presidential candidate, possibly the governor of Minas Gerais (and former President) Franco, for the 2002 elections.
The national election campaign dominates 2002, with longtime Workers' Party (PT) leader Luiz Inácio Lula da Silva, known as Lula, jumping to an early lead in the polls and eventually winning in a runoff. His victory marks a turn across Latin America toward center-left, populist government. He faces both high expectations from his supporters and initial wariness from world markets.
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