Collor Shakes Up Brazilian Politics

President replaces three ministers to smooth path for fiscal reforms

LOCKED in a struggle with the National Congress over federal spending, Brazilian President Fernando Collor de Mello last week fired three Cabinet members and shuffled several other top officials. Analysts expect his nominees to help smooth the way to policies required for agreements with the international banking community.

The board of the International Monetary Fund (IMF) is scheduled to meet tomorrow to consider an agreement that would include an estimated $2 billion standby loan in return for fiscal austerity and other measures.

"The government decided to move out of its isolation and pay the political price for this," says Walder de Goes, a political science professor at the University of Brasilia. "It had a parliamentary minority and lacked interlocutors with society."

The new appointments strengthen President Collor's relations with Congress and with other political and business groups around the country, Professor de Goes says.

He adds that while last week's changes create strong support for the presidency among congressmen from the conservative Liberal Front Party (PFL), he expects further concessions from the executive to create parliamentary allies among some of the smaller center and center-right parties. Although Brazilian congressmen are known for their lack of party loyalty, Collor may be able to keep up a case-by-case negotiating style to garner support for his economic reforms.

Collor replaced Labor and Social Security Minister Antonio Rogerio Magri and Social Action Minister Margarida Procopio with PFL members. Alceni Guerra, fired as Health minister Thursday, has not yet been replaced. All three had been accused of corruption or poor administration. Of the 12 ministers who began their terms along with Collor in March 1990 and promised to stay to the end of his administration, only four remain.

Collor also created the new position of government secretary for Jorge Bornhausen, a PFL politician with strong experience in political negotiating.

With these changes, Collor hopes to resolve the immediate issue of a raise in retirees' pensions. Over the last several weeks, the question has been batted back and forth by the executive, legislative, and judicial branches. In some cities, pensioners have already received a 147-percent increase voted by Congress, but an executive decree suspended payments Jan. 21, and it is unclear if any payments will have to be returned to government coffers.

Government officials say they do not have the revenue for the increase. If the judiciary forces the issue, they say, the federal deficit will increase and and inflation will worsen, making an IMF agreement more difficult to reach. Brazilian inflation has been more than 20 percent a month since October.

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