Sao Paulo hails Neves, but worries he will crimp economy

By , By a staff writer of The Christian Science Monitor

``Sao Paulo would not be where it is today . . . if the politicians had their way.'' Such disdain for politicians is widely held here in Brazil's bustling industrial and commercial capital. It is a factor President-elect Neves cannot ignore.

Sao Paulo -- with 12 million residents Brazil's largest city -- is home base to 60 percent of Brazil's industry and 60 percent of its bank deposits. It generates 40 percent of the nation's gross national product. So when Sao Paulo business leaders speak, Brazilian politicians listen.

Business leaders here say they are pleased with Brazil's move toward democracy. Most say they like Mr. Neves, although they favored home-town boy Paulo Salim Maluf in the Jan. 15 presidential election.

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But they worry about the economic direction Neves may take. They are concerned that the Brazilian recession, which Sao Paulo shows signs of having licked, could return if the government meddles too much with the economy.

``The big problem,'' says businessman Jos'e Carlos Vilella, ``will be for the government to keep its hands off the economy, but at the same time to do something about the social dilemma. The tendency, I fear, will be for the politicians to interfere with economic growth in their zeal to improve the livelihood of Brazilians. And they'll end up not helping those who need help -- and harming the economy.''

Few residents of Sao Paulo expect Neves's government to lower inflation much over the next several years.

``We have had to learn to live with inflation,'' Mr. Vilella says. ``It is a way of life here, and I guess inflation goes hand-in-hand with the development process.''

But Paulistas hope the new government will ensure a continuation of growth. They are proud that it was a Paulista -- economist and former Planning Minister Ant^onio Delfim Netto -- who was most responsible for the nation's ``economic miracle'' in late '70s and early '80s. (Mr. Delfim Netto's policies also are held responsible for Brazil's inflation, which lept from 19.3 percent in 1970 to 223.8 percent in 1984. But he is not widely viewed as responsible for Brazil's recession, which is seen as part of a worldwide phenomenon.)

But there is plenty of evidence that the recession is over here in Sao Paulo. Last year, when world market conditions swung slightly in favor of purchases of Brazilian cars and trucks again, industry began hiring. A city government report says unemployment in Sao Paulo was 6 percent in the last half of 1984. It was 11 percent in 1983.

Maluf, Sao Paulo's unsuccessful presidential candidate, remains in the Brazilian Senate.

``We can be glad that Maluf is in Bras'ilia,'' says businessman Paulo de Campos Coutinho. ``For Maluf understands that politics must support continuation of Brazil's transformation into a major economic power.

``That is politics' main responsibility.'' Chart: Inflation in Brazil. Brazil has world's fourth-highest rate surpassed only by Bolivia, Argentina, and Israel Source: Get'ulio Vargas Foundation and Brazilian Institute of Geography and Statistics 1970 19.3 Percent 1971 19.5 Percent 1972 15.8 Percent 1973 15.5 Percent 1974 34.6 Percent 1975 29.4 Percent 1976 46.2 Percent 1977 38.8 Percent 1978 40.8 Percent 1979 77.2 Percent 1980 110.3 Percent 1981 95.2 Percent 1982 99.7 Percent 1983 211.0 Percent 1984 223.8 Percent 1985 250.0 Percent (projected)

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