In Search of a Miracle

As irreverent cariocas put it, not even Jesus Christ, whose statue, arms outstretched, gazes down on Rio from Corcovado, would be able to do much about Brazil's endemic sin of inflation. In one 31-month period, the cost of living soared an astronomical 340%, and in 1964 alone, the year that free-spending Joao Goulart was thrown out, it was heading up 150%. Yet when President Humberto Castello Branco took over, he confidently vowed to achieve stability in just two years.

With the strength of his army behind him, Castello Branco upped tax collections, chopped subsidies, tightened credit, slowed down the currency printing presses. For all his efforts, living costs under his regime have soared no less than 117%, and he himself has had to double the official minimum wage level. Last week bus fares in Rio rose 40%, and hordes of favela dwellers began getting up hours early to walk to work. Since Castello Branco took over, the price of meat has gone up from 400 cruzeiros per kilo to 1,900, black beans from 180 to 950, rice from 100 to 560. Hardest to take of all, many Brazilians of late can no longer even afford their traditional daily flow of cafezinhos, or tiny cups of black coffee, which are up from 10 cruzeiros to 50.

Last week, in another Draconian attempt to curb the pressure on prices, Castello Branco decreed that no union may be granted more than one wage boost a year--a blow to organized labor, which has been getting multiple raises yearly. By such stubborn measures, Castello Branco and his able Minister of Planning, Roberto Campos, at least hope to hold inflation this year to a mere 35%--which, if it can be done, will indeed be a miracle of sorts.

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