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Unformatted text preview: 2-20-2008 Brazil: Unrealized Potential? 1985-present Electoral democracy; weak institutions Continuation of strong mili tary privileges Extremely fragmented party system; over 20 parties; no party discipline Overrepresentation of rural areas Decentralization--federal government losing fiscal control Strength of internationalized capital Key Challenges Impeachment of Collor in 1992 (elected in 1989) as test of institutions; followed by VP 1993 hyperinflation (2490 percent)--Cardoso as Finance M inister stabilizing it 1994 Cardoso elected President; 1998 reelected 1998 financial crisis in East Asia having effect on Brazil; capital f l ight--new austerity 2002 election of Lula as candidate of PT over Cardoso's preferred candidate; first clearly left-wing president in Brazil Insecurity in financial markets; problem of capital f l ight--assurances that no major reversals of economic liberalization H ighly constrained in policy choices; focus on anti-hunger program; slow on land reform; establishment of conditional cash t ransfer program Areas of Needed Reform H igh levels of poverty and inequality(historically, but no improvement before 2002) Resistance of privileged against tax increases, and inability of government to muster congressional support for reforms because PT only controlling 91 of 513 seats in House of Deputies Deficiencies in rule of law Political Scenario M id-2005 corruption scandal; buying opposition votes--crisis in PT Second scandal about campaign financing following common practice vs. PT as clean Fall 2006 elections: Lula seen as separate from the party Reelection in run-off with 61% of vote (48.6% in first round) Shift in support base to poor Northeast and lower education and income groups Effect of Bolsa Familia ...
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