Cardoso Sworn In for 2nd Term in Brazil

Fernando Henrique Cardoso became Brazil’s first reelected president Friday, vowing to continue modernizing the economy while battling the country’s deep social inequality.

Cardoso was sworn in for his second four-year term in a ceremony in the capital, Brasilia. He is the first Brazilian president to take advantage of a 1997 constitutional change allowing the head of state to serve a second term.

The president threw a spartan inauguration ceremony costing about $50,000--a far cry from the lavish $2.5-million celebrations at his first swearing-in.

The contrast underscored the strict austerity policy that Cardoso imposed since the economic crisis in Asia and Russia hit Brazil in October, driving nervous investors to pull out billions of dollars and push the country toward the brink of economic collapse.

“I was chosen by the people to continue to build a stable, modern, open and competitive economy,” Cardoso said. “But it doesn’t mean much to be the world’s eighth-largest economy if we continue to be first in inequality.”

Cardoso, 67, tamed the country’s chronic hyperinflation, bringing it down from 50% a month in 1994 to less than 2% a year in 1998.

The Brazilian stock exchange more than doubled and currency reserves swelled as millions of Brazilians joined the consumer ranks.

Not surprisingly, Cardoso was overwhelmingly reelected in October, beating for the second time leftist challenger Luis Inacio “Lula” da Silva.

But when the economy took a dive in October, Cardoso imposed an austerity program calling for more taxes and spending cuts of $84 billion over the next three years.

The cuts in social spending threaten to jeopardize his promises to ease the huge gaps in wealth distribution, considered the worst in the world.

Unemployment, now at 8%, is also expected to rise in coming months.

Once a sociology professor, Cardoso was formerly a leftist political leader and was exiled during Brazil’s 1964-85 military dictatorship. He is the second elected president since the end of military rule.