Word: collor
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...Collor's answer was a monetary "shock" that a Bank of Boston report called "the most severe program of economic stabilization ever imposed in a Latin American country, or perhaps in any country." Under its main provisions, the majority of all financial assets, including savings accounts in excess of about $1,200, were frozen for 18 months. Millions of Brazilians were affected: Collor's action took about $85 billion out of play, abruptly halted most business activity and dropped inflation to 3.29% in April. Collor also announced the immediate abolition of two dozen state agencies and said he would sell...
...same time, Collor reversed a long-standing government policy that treated the Amazon basin principally as a source of wood products and a locale for development. He declared that he would work vigorously to stop the burning of the forest by ranchers and settlers, then appointed Brazil's foremost environmental activist, Jose Lutzenberger, to enforce the program. In an interview with TIME, Collor was unapologetic about the abrupt turnaround. "On questions of ecology, we have made a fundamental commitment to life," he said. "We have nothing to hide and nothing to explain...
Initially, both the Brazilian public and Congress applauded Collor's ^ program, especially the asset freeze, which was perceived as a slap at the rich. After all, 9 of 10 Brazilian depositors had less than $1,200 in the bank. Then Collor and his relatively inexperienced team blinked. Fearing a full-blown recession, they made it possible for many businesses and individuals to recover frozen funds. Companies were allowed to trade impounded cruzados for negotiable cruzeiros by using them to pay taxes and debts. Exceptions were also made for retirees, unemployed workers and people needing emergency medical treatment...
...more than half the frozen funds were back in circulation. The remainder belonged to increasingly irate middle-class Brazilians who would not gain access to their money until September 1991. "The feeling was that ((Collor and his government)) did something very dramatic, and then they simply blew it off through bad management," says economist Edmar Bacha of the Pontifical Catholic University in Rio. "That gave the impression that the rich got away with it again." The meltdown of the program rekindled inflation, which more than tripled to a rate of 12.9% last month. That set off new price hikes, which...
...Collor has run into other problems. The Central Union of Workers, representing many government employees, has threatened work stoppages to block the privatization of state-owned industries. A plan to furlough bureaucrats has stumbled on a provision of the 1988 constitution that grants lifetime employment guarantees to all civil servants with five years' tenure. The President has tried to circumvent the law by putting employees on "reserve" status and reducing their pay, but the Supreme Court has stifled that effort...