TRANSITION IN BRAZIL

Otago Daily Times, Issue 22714, 29 October 1935, Page 10

TRANSITION IN BRAZIL

WHERE EXTREMES MEET POLITICAL STABILITY Although economic and financial difficulties continue, Brazil is gradually settling down in her new political house (set up in July, 1934, under the new constitution) with far less disturbance than many people, inside or outside Brazil, had thought possible (writes the Rio de Janeiro correspondent of The Times). The view that the internal political position is fairly stable is supported by the fact that to-day, in the more important States (Pernambuco, Bahia, the Federal District, Sao Paulo, Minas Geraes, and Rio Grande do Sul) and in some others, the new presidents are former interventores, elected by the new State assemblies. The economic difficulties are common knowledge. Their more immediate causes are: Excess of coffee production and low prices for that commodity, which is still the principal export asset; a depreciated currency in the international exchange market; and a series of unbalanced Budgets. In the press, as well as in the new Federal Congress, these are the favourite themes of the opponents of the present regime. But such criticisms produce less effct on the Brazilian public than might perhaps be expected. There are two reasons for this: First, the Government itself admits and, indeed, proclaims all these ills, and not only promises, but is clearly trying (somewhat ineffectually, it is true), to remedy them; and, secondly, the public has no confidence that those who are loudest in inveighing against the Government would do any better at the task of delivering the country from its economic troubles. There is also a brighter side—namely, that local industries are thriving; that, so far at any rate, the currency of the country has more or less maintained its purchasing power internally; and that there is no unemployment problem. To this may be added the prospect that Brazilian cotton may become a really valuable export asset and that low exchange may stimulate the exportation of other Brazilian products. It is, therefore, hoped that the very instability of economic conditions in Brazil may spell a continuance of relative stability in internal political conditions, with favourable reactions on her economy. Extremist doctrines are, however, being actively propagated. Both the right-wing Integralists (more Nazi than Fascist) and the left-wing Alliancists (more Communists than anything else) include in their programmes a complete repudiation of foreign debts and the nationalisation of all public works and public utilities. Inspired at such sources, such a' joint objective might be considered to be of no special consequence, or at least of no immediate importance, were it not for thfl fact that both wings of extremism are gaining ground. Of even deeper significance is the circumstance that some prominent Brazilians and a section of the general public, belonging to neither extremist section, either condone or approve the advocacy of non-payment of Brazil's national and public utility obligations abroad. On the other hand, there is a leaven of thoughtful opinion, which is slowly permeating political circles in the country. That opinion, while accepting as a fait accompli what it considers to be the defective political structure established by the new Constitution, advocates a general reform of the whole of the Brazilian system of taxation, to be preceded by a simple but vital modification of the relations between the Executive and the Legislature —both the reform and the modification being operated within the present constitutional regime, .which is to remain intact. Though the successful development of such a scheme of transformation might seem impracticable, yet there are not wantim.' historic antecedents in Brazil. What tins, htful Brazilians are aiming at is closer i-o operation between Executive and Legislature as the corollary of more efficient control .of the former by the latter. Advocates of these ideas see no reason why Brazil should not rehabilitate her international credit in a very short time bv ensuring the stability of her institutions through restoration of public confidence in them, and by freeing economic expansion from vexatious trammels through application of a taxation system, which, while operating far more effectively than the existing medley of taxes as a nroduccr of public revenue, would cease to impede the healthy interplay of import and export trade or to throttle the normal development of Brazil's undoubted resources. There are real grounds for reasonable hone in the future in that, extremist pronaernnda notwithstanding, the general temper throughout the country to-day finncnrs to be sound. That temper is to "■et down to work, that beinff recognised ns flic first step towards not only economic rpounpration and financial rehabilitation, but towards political regeneration. The feelin? of the nveracre Brazilian todnv is that his country is going through a period of transition, from which he is confident it will emerge successfully.