Family Savings whittled away; Brazilians battle 100% inflation

Ivete Andrade de Sousa looks up from the open magazine in her hands and says to no one in particular: "Why can't government keep inflation down and give us a chance to get ahead?"

There are murmurs of assent from others waiting patiently in the bus line on the edge of the lovely tree-shaded plaza in front of the Palacio das Princesas. The ornate 18th-century palace once housed Portugal's rulers here; now it serves the governors of Pernambuco state in Brazil's northeast.

Ivete is angry, as are many Brazilians, with her country's soaring inflation. In 1980, it exceeded 100 percent. This escalating rate is undercutting the upward social mobility that, even in this impoverished part of the country, was beginning to give hope to Brazilians during the early 1970s.

Inflation is taking its heaviest toll on the lower middle class -- people like Ivete, who works in Lojas Americanos, a Brazilian dime-store chain, and her husband, Antonio, a truck driver.

When their first child, Joao, was born in 1973, they hoped that by 1980 they would have enough money put aside to buy a small house in the modern and expanding southern end of the city, where two of Antonio's truck-driver associates were buying homes.

With the arrival of Catarina in 1975 that hope grew more earnest and they were happy because their savings were beginning to build.

But as inflation began to eat into their joint incomes in the late 1970s, that hope dimmed -- and now has almost died.

The couple continues to live in a rented two-room apartment "in which we huddle like rats in a horrible slum," to quote Ivete.

"There is no hope that we will ever get out of it," she laments. Tears well up in her deep blue eyes, but they are quickly whisked away when she talks with love about Joao, now 8, and Catarina, 6.

"They take it very much in stride," she says. "And at least they have a school to attend.

"Antonio did not go at all. He taught himself to read on those long nights when he was 15, working as a trucker's helper on runs to Belem and Brasilia."

Ivete herself had just three years of schooling, but a neighbor who taught in a private school took a fancy to her and gave her "six years of free education at night."

Ivete and Antonio, both natives of Recife, have problems, but their experience -- and that of their children -- is happier than that of many Brazilians of the past several generations and even the current generation.

Education is a part of their lives.

Here in the northeast, one of the poorest parts of a sprawling land of 125 million people, education is not readily available despite massive government spending in this state. At least 30 percent of the children never enter classrooms. And many of them apparently do not have the spark that motivated Antonio to learn on his own.

The government admits that at least half the region's population is illiterate.

But social needs -- including education and health care -- are now perceived to be what the area most needs. Both the Pernambuco government and the federal government in Brasilia have increased their educational budgets during the past few years.

"This is one of the reasons for inflation, for we are taking more government revenue for education and tax more," says Dalton Nelson Melo de Teixeira, a government economist.

While sipping sweet black coffee from a demitasse cup, he admitted that inflation is getting out of hand. "The answers are not easy in coming," he says. "Brazil must spend to build an infrastructure to take care of its soaring population."

Even though the government is hoping to lower inflation to 80 percent this year, Mr. Melo adds that it could soar to 135 percent. "The more money we pump into the economy, the more the inflation spiral shoots up."

He ticks off factors that could contribute to that mammoth inflation: spending on infrastructure, a whopping foreign debt of $55 billion, a trade deficit of $2.8 billion in 1980, and spending on oil exploration.

If inflation jumps up to 135 percent, Ivete and Antonio will be hard-pressed even to keep their small apartment. Rent keeps going up. Between 1979 and now, rent has jumped 85 percent; their combined salaries rose only 40 percent in that period.

"We have used our savings just to keep up," says Ivete.

That is a common complaint in Recife and elsewhere in Brazil. The last half of the 1970s was a bad time for most people here, even though Recife has sprouted with tall buildings, attracting a great deal of industry and becoming something of a tourist center.

In addition, the whole Paulo Afonso Dam complex on the Sao Francisco River west of here, grouped together in an organization known by its acronym, CHESF, has been a major factor in employing thousands of northeasterners and bringing an affluence to the area.

This affluence has had its influence on Ivete and Antonio.

Despite the construction boom here, there is plenty of competition for jobs. Unemployment is high; statistics (though not especially reliable) show it may be around 35 percent.

One of the reasons for the high unemployment is the arrival in Recife of thousands of Pernambucans from the countryside. They have left farming areas because machines are taking over much of the harvesting work previously done by humans. Farming was never very profitable in the often desertlike conditions of the northeast.

One person who knows something about this is Silvia Carneiro da Ribeiro, a bright and attractive 17-year-old who came from the sertao, or backlands, region of Bahia and Alagoas states. Her deep black eyes, so typical of the "sertaneja, " sparkle as she talks of her own future.

She came to Recife with her mother after her father died. He helped construct the Paulo Afonso dam on the Sao Francisco River and worked for the CHESF organization.

Silvia did not start school until she was 10; now she is a junior in high school.

"Mother wanted all of us to have an education, and it was hard to work that out in Paulo Afonso at the time my father died, so we came here.

"Now I expect to go on to university.I realize how lucky I am."

She credits her mother's determination for making it all possible. "She was the extra spark that has given me this opportunity. Many of the other families who come here just don't make it, for there is no one encouraging them and the government has not built enough schools."

She talks a lot about her life in the interior and how she misses the area. A lot of government money is going into Paulo Afonso, a huge complex of dams, reservoirs, and power plants. It is an example of the new attention being paid to the northeast and of growth in the region.

"It has brought electricity to this area," she says, "and even without schools we are progressing."

As Silvia looked around Recife's central plaza, she pointed to the Palacio das Princesas, and said:

"This is our past: Activities like CHESF are our future. And maybe with CHESF and other organizations of modern Brazil, that future will be brighter than the past."