If Brazil is next to an abyss, it doesn't intend to fall in

In this vast land of 125 million and 3.3 million square miles, the world's fifth-largest nation in size, just about everyone is convinced that Brazil is on its way to becoming a major power.

It wasn't always so. As recently as the 1950s, many Brazilians felt it was unlikely any country in the tropics would ever achieve such status. With their wry sense of humor, they would often lament: "Sure, this is the country of the future -- and always will be."

But the future is now here. Brazil in the past generation has moved close to world power status. With the eighth-largest economy, it has made significant inroads into international markets and is grwoing economically at the rate of nearly 10 percent a year.

There are, nevertheless, serious problems: inflation, energy shortages, whopping foreign debts, and cost overruns on many public projects. Moreover, there are dire forecasts of other economic uncertainties. "Brazil is on the edge of an abyss," a Brazilian politician recently commented, "ready to fall in."

Another politician, agreeing that the country is at the edge of the abyss with its heavy debt, oil shortages, and inflation, added wryly, "But it won't fall in because it is bigger than the abyss."

There can be no mistaking either the mighty size of Brazil and its economic muscle, or the size of the problems it faces.

Underlying the growth are two factors: the determination of successive civilian and military governments since the 1950s to make economic growth the key story in Brazil, and an unbounded sense of confidence on the part of Brazilians in general. This latter factor cannot be underestimated. There is a frontier spirit in Brazil that says anything is possible.

"The difficult, we'll do immediately; the impossible, we'll do tomorrow," goes the US saying echoed in Brazil.

There is no inferiority complex in the Brazilian makeup. Brazilians sincerely believe they are as good as anyone in the world and are doing what they can to prove it.

Statistics becme superlatives in Brazil. In agriculture, for example, Brazil has become the world's second largest producer of soybeans after the United States; yet 15 years ago, it hardly ranked among soybean producers. In sugar, Brazil has become the world's largest producer, edging the Soviet Union.

But only 4 percent of the land is under cultivation. Imagine what could be produced if even that 4 percent was doubled, which appears feasible!

In industry, Brazil has racked up an impressive record. Annual steel production is now above 16 million tons, more than double the tally six years ago. The auto industry, although in a slump at the moment, produces more than 2 million vehicles yearly. Brazilian firms make everything from clothing to cutlery, wood products to airplanes. Brazil is fast becoming a major armament producer.

Much of this production is being exported, earning billions yearly for the Brazilian economy. Commuter aircraft with the "made in Brazil" tag are sold in many parts of the world including the US. The same firm that makes these 20 -seat Bandeirantes and 30-seat Brasilias -- both turboprops -- is about to launch into the military aircraft field with a variety of combat planes.

Brazil's story is an impressive one. The Brazilian economy is the most buoyant in South America, with a gross national product of $228 billion in 1980. Per capita income has reached nearly $1,800. And exports total $19.5 billion for 1980, and are expected to go well above $20 billion this year.

As for Brazil's problems, inflation, a major difficulty in the 1960s which was finally corralled in the early 1970s, has again broken loose and is approaching 120 percent a year. The government, in efforts to reduce inflation's impact, has reversed its expansionist policy and is tightening credit. But economists worry if this will spawn another problem -- a serious recession.

There is, moreover, a huge cash crisis. Brazil is the most heavily indebted of all the developing countries, its $60 billion debt rising at the rate of $5 billion year. A trade deficit approaching $3 billion a year is part of the difficulty.

Underlying all this is an oil crisis. Brazil simply has not found enough domestic oil to fuel its industry. Some 85 percent of its oil is imported. Many Brazilians see this as a potential Achilles' heel of their economy. Yet, at the same time, there is optimism that the problem will eventually be solved.

The Brazilians created the problem for themselves. From the 1950s through the early 1970s, as Brazil embarked on its heady economic development program, it was planned that the economy would run on inexpensive imported oil. Brazil's starkly modern capital, Brasilia, is a monument to that planning mistake. It is a matrix of spaghetti-like cloverleafs in which walking or bicycling are virtually impossible. The normal transportation is the motor vehicle.

Throughout the country there are few rail lines to transport goods and people. Both must go by highway or air transport. These, of course, require petroleum.

Efforts to wean industry away from oil to coal are under way. The use of gasohol, a mix of gasoline with alcohol from sugar-cane waste, is also far advanced. So are a number of hydroelectric projects -- on the Parana River in the south and the Sao Francisco in the northeast. And nuclear power is also on the way. But Brazilian industry still relies heavily on diesel fuel. So imported oil remains an absolute necessity.

Oil consumption is about 1.2 million barrels per day; only 200,000 barrels are produced at home. Those imports cost $10.5 billion yearly -- which in turn has led to the bad foreign trade imbalance.

Another cause of major concern is Brazil's chronic demographic spiral which nudges the population up nearly 3 percent a year. More than 50 percent of the population is under the age of 20.

How to feed, clothe, house, educate, and find jobs for this legion of young people is Brazil's basic dilemma. Upon its solution ultimately rests the success of the Brazilian economic miracle.

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