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Economic News Offers `Wonder of Wonders'

IN the musical ``Fiddler on the Roof,'' one song included a line about ``wonder of wonders.'' It was about a romance. These days the ``wonder of wonders'' are economic events. Here are a few that have financiers shaking their heads:

A more genuine capitalism is sweeping through Latin America.

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Brazil's new president, Fernando Collor de Mello, announced last week a harsh, potentially recessionary anti-inflation package.

Brazilian governments have previously announced - and failed to carry out - three previous plans for beating inflation in the past four years. But businessmen in Brazil seem convinced that this one could actually be implemented to a large degree. If so, many state enterprises will be privatized. The budget deficit will disappear. Subsidies to business will be suspended. Government will shrink.

In Peru, the presidential candidate leading the public opinion polls for an election April 8 is Mario Vargas Llosa, an intellectual and keen proponent of the free market. He advocates selling 200 state companies, dismissing as many as 500,000 government workers, raising taxes, opening the country to foreign investment, and allowing markets to set prices.

Like many other economies in Latin America, the Peruvian economy has had a strong mercantilist flavor: businessmen depend on government to grant them regulatory privileges and limit competition.

Similar efforts to reduce the role of government are being pushed in Argentina, Mexico, and Venezuela. The latter has carried out sufficient economic reforms, including a moderation of inflation, that it could reach a deal Tuesday with commercial bankers on the bulk of its $28 billion in external debt. Under one option, banks would trim the loans owed them by Venezuela by 30 percent in return for guarantees on the remaining principal and interest payments.

Eastern Europe and even the Soviet Union are moving toward freer enterprise.

Nikolai Petrakov, an economic adviser to President Mikhail Gorbachev, told Radio Moscow this week that the Kremlin would soon publish a ``program for an accelerated transition to create a modern full-blooded market. There is no alternative to this.''

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One press report says the program would include abolition of some planning ministries, an end to price controls, devaluation of the ruble, and the importation of more consumer goods. Another report talks of bank reforms, ending state ownership, and ruble convertibility starting July 1.

If only a portion of these reforms actually happen, it will be revolutionary.

With the election of a conservative government in East Germany last Sunday, the way is opened for a monetary and economic union with West Germany. The plan calls for uniting the two currencies and social benefits by July 1. Also, special reception centers and most benefits for East German resettlers are to end on that date.

These measures, it is hoped, will stem the destabilizing flow of East Germans to West Germany and put the German Democratic Republic on a path toward greater prosperity. By the end of the century, a merged Germany could well economically dominate Europe even more than West Germany does now.

Other West European nations, concerned about this, will be pressing for greater integration of Germany into a more unified Europe. The European Community's Finance Commissioner, Henning Christophersen, says he expects the community to introduce a single currency in the second half of this decade.

Hope is rising that the United States economy has avoided a real recession.

``Under Alan Greenspan, the [Federal Reserve System] seems to have been quite successful in allowing the US economy to adapt to what can be called a `new wave' business cycle,'' writes Stephen S. Roach, an economist with Morgan Stanley & Co. The economy fluctuates in a relatively narrow range, avoiding both high inflation and recession.

If so, the nation's seven-year economic expansion may outlast the record nine-year expansion of the 1960s. As the ``Fiddler on the Roof'' song goes, that would be a ``miracle of miracles.''

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