Brazil’s Leader Faces Vote Amid Economic Peril

President Fernando Henrique Cardoso of Brazil has read and written more books than most world leaders. He glides easily from campuses to campaign rallies, from book-filled rooms to smoke-filled rooms.

So the setting was quintessential: the solemn, wood-paneled confines of the 19th century Royal Portuguese Library here. Academics and politicians gathered last month for the launch of “The World in Portuguese,” a book of conversations between Cardoso and former President Mario Soares of Portugal.

In swept Cardoso, a professorial, silver-haired 67-year-old in a beige suit. Brazil had spent another week fighting off economic collapse; today’s presidential election was approaching fast. Yet the president looked suave and sounded unruffled.

After calling on world leaders to better manage global economic turmoil, Cardoso said Soares was courageous to join him as co-author.

“He was willing to publish a book with a president . . . whom history could eventually condemn, someone who still awaits judgment in terms of his contribution to Brazilian history,” Cardoso said.

If Cardoso wins a decisive reelection, as polls predict, he will have four more years to shape history. For now, Brazilians and foreigners regard him as one of the hemisphere’s most impressive presidents. He is a classic Latin American intellectual with an unusual flair for nuts-and-bolts politicking, a cosmopolitan statesman admired by Brazil’s impoverished millions despite his aversion to populist posturing.

Critics accuse him of abandoning his ideals in favor of political self-interest, but they recognize his talents.

“You can compare him with the presidents of the United States and Europe, not just Latin America, and you will find few people as qualified,” said economist Joao Sucupira of the left-leaning Brazilian Institute for Social and Economic Analyses.

Cardoso will have little time to celebrate if he wins today’s election: He must defuse an economic time bomb. Brazil’s troubles result from the Asian and Russian crises and the complexities of this behemoth of a nation that is simultaneously appealing and apocalyptic, and still fragile despite its rapid progress.

U.S. Keeps Wary Eye on Brazil Economy

The judgment of history will depend on how Cardoso responds to the challenge, if he is reelected, and the extent to which people perceive that he could have avoided it.

During the past two months, Washington and Wall Street watched nervously as Brazil’s stock markets plummeted and its foreign reserves hemorrhaged about $26 billion. If the world’s eighth-largest economy goes down, the repercussions could stagger other Latin American nations and gut-punch the U.S. economy, which thrives partly because of expanding south-of-the-border trade.

Cardoso is implementing painful austerity measures targeting a budget deficit that equals an alarming 7% of the nation’s gross domestic product. The long-term health of the economy depends on his ability to get Congress to make the archaic social security, civil service and taxation systems less costly and more efficient.

Some analysts say he is paying the price for failing to deliver those fiscally vital, but politically difficult, reforms during his first term. They assert that he was more concerned with getting reelected after a change in the constitution enabled him to seek a second term.

The opposition, meanwhile, says he recklessly threw open the doors to foreign competition, with devastating results for Brazilian industry and workers.

“The government’s leadership failed,” said Luiz Marinho, president of the powerful Metalworkers Union in the city of Sao Paulo. “We are in for a harsh recession. There is a world problem, yes, but the government did not fulfill its obligation to be prepared.”

Marinho echoes the views of Luiz Inacio “Lula” da Silva of the Workers’ Party, a former Metalworkers boss and underdog opposition candidate making his third run for president.

Da Silva is struggling for enough votes to force a runoff. If polls and analysts are correct, voters consider him sincere and honest--but apparently no match for Cardoso.

The president’s defenders say that his achievements have been titanic, given that Brazil’s Congress and constitution are veritable labyrinths.

“Some bankers and businessmen seem to want us to circumvent our democratic institutions,” said political scientist Bolivar Lamounier, Cardoso’s friend and academic colleague since 1968. “People have the mistaken impression that Cardoso is unwilling to make decisions. When certain tough decisions are needed, the record shows that he takes them.”

During his first term, Cardoso moved on multiple fronts: privatizing giant state monopolies, such as the telephone system, that had been untouchable nationalistic symbols, wiping out hyper-inflation and raking in foreign investment--only China receives more.

Similar reforms have been enacted elsewhere, but no other Latin American nation is simultaneously as big, chaotic, brutally unequal and cumbrously democratic.

The free-market transformations of Chile and Mexico were rammed through respectively by a murderous military dictatorship and an authoritarian ruling party. Peru’s President Alberto Fujimori has resorted to shutting down Congress and unleashing the security forces.

And although President Carlos Menem of Argentina led a dramatic economic overhaul in a reasonably healthy democracy, he had the advantages of presidential decrees and a subservient legislative majority.

Cardoso, in contrast, has had to cobble together coalitions and hammer out compromises. He has scrupulously avoided brushes with the corruption that permeates the region, where piratical presidents amass inexplicable fortunes.

His clean image “is an asset of this government,” Cardoso told U.S. reporters last year. “I am a middle-class person. My ministers are middle-class people. We have kept that way of life. When I go back to Sao Paulo, I live as before, in the same house as always.”

At the same time, his deal-making skills are remarkable for a sociologist who honed his academic credentials in faraway places such as France and California, where he taught at Stanford and Berkeley. Although Latin American intellectuals traditionally have wielded power far beyond that of their U.S. counterparts, few have pursued formal leadership as successfully as Cardoso.

Sharp Contrast With Other Leaders

In fact, some have failed resoundingly. Peruvian novelist Mario Vargas Llosa discovered when he ran for president in 1990 that he loathed all the flesh-pressing and fast talking. He wrote a book about his disillusionment.

In a book of interviews with a Brazilian journalist published this year, Cardoso said he relishes the patience and discipline of politics, even the rote repetition of campaign-stop messages. (He has declined to be interviewed by foreign correspondents before today’s election.)

Cardoso also rejected the cliche that intellectuals cannot relate to the man on the street.

“I spent a lot of time [as a sociologist] doing research about blacks, about religion, about slums,” he said. “This is training in listening to others. Listening, taking patient notes, asking, asking again.”

In person, Cardoso comes off as relaxed and witty, in contrast with a current crop of Latin American leaders who tend to be wary and stolid. He raises Brazil’s profile with frequent travel and his good rapport with leaders such as President Clinton.

As a youthful leftist, Cardoso was influenced as much by German political philosopher Max Weber as by Karl Marx. The president embodies the Weberian model of the “rational” leader who persuades as opposed to the “heroic” leader who preaches, according to Sen. Arthur da Tavola, Cardoso’s campaign chief in Rio de Janeiro.

“In the past, people wanted strong, extremist, bombastic politicians,” Da Tavola said. “He is nothing like that. He has always been a thinker. He looks for consensus. . . . That’s why he is good on TV. He is a communicator. It is not exactly charisma; he is empathetic.”

Da Tavola has known Cardoso since their boyhood in Rio, when Cardoso’s father was an army colonel whose progressive politics landed him in jail. Da Tavola and Cardoso crossed paths again in 1964, in Chile, among Brazilian exiles taking refuge from a coup back home by generals who ruled for two decades. The exiles gathered on Friday nights to discuss Brazil’s hopes and troubles; many became political leaders.

Foundation Lies in Economics

In Chile, Cardoso wrote a book about “dependency theory,” examining the relationship between rich and poor nations, that became a leftist classic. He returned to Brazil in the 1970s to lead the democracy movement and was elected senator.

After President Fernando Collor de Mello resigned in 1992 under threat of impeachment, Cardoso catapulted quickly to foreign minister and then finance minister.

Cardoso designed the Real Plan, a measure designed to stabilize the currency, the real. The plan eased poverty and laid the foundation for the realization of Brazil’s long-unfulfilled potential in the global economy. That milestone earned him the presidency in 1994 and looks likely to do so again.

“The voters elected an economic program,” said Walder de Goes, a political scientist. “In the 1996 [midterm] elections, they voted for the continuity of the program. We appear to have overcome an irrational, anarchic phase in Brazilian politics.”

Cardoso’s center-right coalition is anchored by conservative provincial bosses such as Antonio Carlos Magalhaes of Bahia state, the Senate president. Cardoso’s team ranges from traditional power brokers to longtime leftists, such as the minister of agrarian reform, whose department has made progress against one of Brazil’s most intractable social problems.

Cardoso compares his coalition approach to Prime Minister Tony Blair’s remaking of Britain’s Labor Party as a centrist force that “looks to the left.”

“In a modern society, either you have a strong centrist bloc or one of the two extremes imposes itself,” Cardoso said.

But former admirers say he made a deal with the devils of the past.

“If you analyze it, there is no way he is a social democrat,” union leader Marinho said. “He has surrounded himself with all the figures of the military dictatorship, of the Collor administration.”

Another complaint by critics and some allies: Cardoso has an occasional tendency to make offhand jokes and sarcastic comments.

His poll ratings dipped this year after he scoffed at public servants who take early retirement, calling them “bums.” He once rankled black groups by joking about his mixed racial heritage. During a televised appearance to discuss a bank failure, the president made the deadpan comment that, fortunately, he had no funds in the bank.

“Sometimes he could use a copy editor,” Da Tavola said.

The current crisis is no laughing matter.

In addition to his expected austerity package, Cardoso also will probably need a bailout from international monetary institutions. The short-term impact will be hard on Brazilians. More than ever, Cardoso will have to use his singular combination of charm, political muscle and sophisticated discourse to produce results and articulate the reasons for sacrifice.

“He changed the direction of the country,” Da Tavola said. “What would this crisis have been like without him? What if we had hyper-inflation, a deficit, no reforms, no reserves, no possibility of international contacts and support? We would be in chaos.”