Help on an If Basis

Having already poured $1.9 billion worth of aid into Brazil since World War II, the U.S. bet another $398.5 million last week that President Joao Goulart will be able to bring order out of economic chaos in Latin America's biggest nation. The package that Brazilian Finance Minister Francisco San Tiago Dantas signed at the White House was no simple, here-we-go-again-boys handout. It was, instead, one of the most carefully hedged bets in the history of U.S. foreign aid.

In a formal letter to U.S. Aid Chief David Bell, Dantas listed eleven separate steps that his government will take to curb the ruinous inflation that has lowered the value of Brazil's cruzeiro by 78% in the past five years alone. Among them: tighter controls on government spending in order to cut Brazil's treasury deficit, less new currency to be printed, some much-needed overhauling of money-losing state-owned enterprises, a serious attempt at tax reform and improved tax collection, curbs on coffee overproduction, expansion of other exports (iron ore, meat, manufactures), encouragement of private investment from overseas.

Brazil has made such promises before. But this time the U.S. will demand performance. "Disbursements," read a U.S. letter answering Dantas, "are expected to be phased in time, as required by the program, and parallel with the successful implementation of the measures described by you." And the U.S. added another hedge: except for an immediate $84 million balance-of-payments bailout, the full $398.5 million commitment is made only "on the assumption that external financial assistance will be successfully negotiated by June 1963 from other sources."

If Dantas had got everything his own way, he would have left Washington with a $568 million aid package. As it was, the highly conditional $398.5 million agreement was none too popular with members of the House Inter-American Affairs Subcommittee before which Dantas pleaded Brazil's case. Said Iowa Republican Harold R. Gross: "It comes close to a betrayal of the American taxpayer.'' Realistically, Dantas accepted the results as "satisfactory," and flew home to report to President Goulart in Brasilia. Then he started planning missions to Western Europe and Japan in a rush attempt to meet the June deadline set by the U.S. for financial assistance from "other sources.''

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