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Help for the Great Exception

September 15, 1986

Brazil is Latin America's great exception. The biggest nation in an otherwise-Spanish-speaking region, its 130 million people speak Portuguese. Its history has been marked with significantly less political violence than most of its neighbors. And these days Brazil is one of the few debtor nations in the region that can look to its economic future with optimism.

The Reagan Administration must keep these differences in mind when pondering the future of U.S.-Brazilian relations after last week's visit by Brazilian President Jose Sarney. For, despite all the public pleasantries exchanged by Presidents Reagan and Sarney during official ceremonies, there was an undercurrent of hostility in the private sessions between Brazilian officials and their U.S. counterparts. For example, the lectures by U.S. officials on protectionism betrayed a rigidity that does not fully acknowledge Brazil's special circumstances and importance.

In his speech to a joint session of Congress, Sarney responded with a solid offer to increase imports from the United States if this country will help him persuade commercial banks and international lending agencies to reduce the burden of servicing Brazil's $105-billion foreign debt, the largest in the world, by extending the payments. Sarney's proposal merits careful study and a sympathetic response, for the recovery and economic expansion of Brazil are important to the prosperity of the entire hemisphere.

Sarney has overseen a remarkable economic boom since taking office early last year. Despite its heavy debt burden, Brazil last year achieved an economic growth rate of more than 8% with a trade surplus of more than $12.5 billion, and indicators point to another upbeat performance this year. Sarney has done this at least partly by bucking the rules of economic orthodoxy--imposing wage and price controls to halt inflation and raising taxes dramatically. But his country is doing just what Reagan and his economic advisers want --working its way out of debt.

Given this reality, the United States should soft-pedal its criticism of Brazil and focus instead on the things that it can do to maintain Brazil's economic growth. By doing so, Reagan will help strengthen ties with one of Latin America's most important democracies--a vibrant nation that could be a world leader by the 21st Century.

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