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Brazil's Leader Faces Vote Amid Economic Peril


RIO DE JANEIRO — President Fernando Henrique Cardoso of Brazil has read and written more books than most world leaders. He glides easily from campuses to campaign rallies, from book-filled rooms to smoke-filled rooms.

So the setting was quintessential: the solemn, wood-paneled confines of the 19th century Royal Portuguese Library here. Academics and politicians gathered last month for the launch of "The World in Portuguese," a book of conversations between Cardoso and former President Mario Soares of Portugal.

In swept Cardoso, a professorial, silver-haired 67-year-old in a beige suit. Brazil had spent another week fighting off economic collapse; today's presidential election was approaching fast. Yet the president looked suave and sounded unruffled.

After calling on world leaders to better manage global economic turmoil, Cardoso said Soares was courageous to join him as co-author.

"He was willing to publish a book with a president . . . whom history could eventually condemn, someone who still awaits judgment in terms of his contribution to Brazilian history," Cardoso said.

If Cardoso wins a decisive reelection, as polls predict, he will have four more years to shape history. For now, Brazilians and foreigners regard him as one of the hemisphere's most impressive presidents. He is a classic Latin American intellectual with an unusual flair for nuts-and-bolts politicking, a cosmopolitan statesman admired by Brazil's impoverished millions despite his aversion to populist posturing.

Critics accuse him of abandoning his ideals in favor of political self-interest, but they recognize his talents.

"You can compare him with the presidents of the United States and Europe, not just Latin America, and you will find few people as qualified," said economist Joao Sucupira of the left-leaning Brazilian Institute for Social and Economic Analyses.

Cardoso will have little time to celebrate if he wins today's election: He must defuse an economic time bomb. Brazil's troubles result from the Asian and Russian crises and the complexities of this behemoth of a nation that is simultaneously appealing and apocalyptic, and still fragile despite its rapid progress.

U.S. Keeps Wary Eye on Brazil Economy

The judgment of history will depend on how Cardoso responds to the challenge, if he is reelected, and the extent to which people perceive that he could have avoided it.

During the past two months, Washington and Wall Street watched nervously as Brazil's stock markets plummeted and its foreign reserves hemorrhaged about $26 billion. If the world's eighth-largest economy goes down, the repercussions could stagger other Latin American nations and gut-punch the U.S. economy, which thrives partly because of expanding south-of-the-border trade.

Cardoso is implementing painful austerity measures targeting a budget deficit that equals an alarming 7% of the nation's gross domestic product. The long-term health of the economy depends on his ability to get Congress to make the archaic social security, civil service and taxation systems less costly and more efficient.

Some analysts say he is paying the price for failing to deliver those fiscally vital, but politically difficult, reforms during his first term. They assert that he was more concerned with getting reelected after a change in the constitution enabled him to seek a second term.

The opposition, meanwhile, says he recklessly threw open the doors to foreign competition, with devastating results for Brazilian industry and workers.

"The government's leadership failed," said Luiz Marinho, president of the powerful Metalworkers Union in the city of Sao Paulo. "We are in for a harsh recession. There is a world problem, yes, but the government did not fulfill its obligation to be prepared."

Marinho echoes the views of Luiz Inacio "Lula" da Silva of the Workers' Party, a former Metalworkers boss and underdog opposition candidate making his third run for president.

Da Silva is struggling for enough votes to force a runoff. If polls and analysts are correct, voters consider him sincere and honest--but apparently no match for Cardoso.

The president's defenders say that his achievements have been titanic, given that Brazil's Congress and constitution are veritable labyrinths.

"Some bankers and businessmen seem to want us to circumvent our democratic institutions," said political scientist Bolivar Lamounier, Cardoso's friend and academic colleague since 1968. "People have the mistaken impression that Cardoso is unwilling to make decisions. When certain tough decisions are needed, the record shows that he takes them."

During his first term, Cardoso moved on multiple fronts: privatizing giant state monopolies, such as the telephone system, that had been untouchable nationalistic symbols, wiping out hyper-inflation and raking in foreign investment--only China receives more.

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