SAO PAULO, BRAZIL
ONE week into Brazil's wide-ranging economic plan, the government continues to crack the whip against inflation, making only a very few exceptions to its harsh new rules. The plan is already in effect, but Congress must approve it by mid-April for it to continue being implemented. Debate begins this week.
The Collor plan blocks individual and corporate access to all but a small portion of savings and investments. The government will use the blocked funds as a compulsory 18-month loan, at 6 percent interest, to help cut its inflationary internal debt.
To ensure that Brazilians abide by the new laws, President Fernando Collor de Mello last week gave a free hand to the Federal Police. Friday, the police arrested the owner of a Sao Paulo supermarket chain for allegedly selling two items above the controlled prices. Other retailers around the country also went to jail last week.
The Federal Police also questioned two directors of the Folha de Sao Paulo daily newspaper Friday about allegedly illegal advertisement billing procedures.
Many Brazilians were shocked by Collor's tough enforcement of his inflation plan. ``In resorting to intimidation and threats,'' said the Rio de Janeiro daily Jornal do Brasil, ``a plan that is supposed to be different from previous ones, breaks the barrier between the exercise of authority and the delirium of authoritarianism.''
Businessmen and economists say a recession has begun. According to the newsweekly Veja, 50,000 workers were let go last week. On the other hand, prices have dropped dramatically.
On Friday, the government restored full access to savings for pensioners, retirees, unions, and professional organizations. Farmers were allowed increased access to savings, to meet payrolls.