The Role of Multinational Corporations in Brazil's Economy

During these years with mad inflation and fiscal instability, Brazil straight up went through some lit and not-so-lit GDP growth. In 1985 and 1986 when there was like a new regime, the country totally boomed with a high growth of 7.9 percent and 8 percent, respectively. It was lit! In 1987, like, after the total flop of the Bresser Plan and the total lack of fiscal discipline, the annual growth like totally tanked to 3.6 percent and Brazil had this major bummer of a negative growth of -1.0 percent the next year. Ugh, so not cool. In 1989 the growth was like, totally lit with a solid 3.3 percent, only to like, totally flop again in 1990, when it was a whopping -4.3 percent. 

The Bresser Plan just flexed with some fresh price and wage freezes, with caps that get readjusted every three months. 

The trigger mechanism for automatic wage increases got yeeted cuz it was tryna keep interest rates higher than inflation to prevent the economy from getting too lit. Thru a series of mini-devals the exchange rate was kept in check (Roett, 2010:82). Cuz like, the Bresser Plan totally flopped cuz they had zero fiscal discipline, smh. In December 1987, Bresser dipped and in January 1988 the "Rice and Beans" policy was flexed. This was, like, a lowkey effort by the new minister of finance, Mailson da Nobrega, to flex on prices and public spending. But, like, the economy was, like, totally messed up again by mid-1988 with inflation going cray-cray at 81 percent a month by March 1990. GDP was like barely growing at, like, over 1 percent and unemployment was, like, on the rise. The gov was like sooo desperate for a turnaround at this point and they just like introduced yet another currency. SMH. The "cruzado novo" was like, totally dropped in the January 1989 Summer Plan, ya know? Unfortunately this didn't really do much for the economic situation, tbh. There was, like, a totally new price and wage freeze, and they straight up got rid of indexation, except for savings deposit accounts. There was, like, an attempt to, like, hold back the money and credit stuff and, like, make the exchange rate go down (Roett, 2010:82).

At this point, the gov's credibility had straight up vanished and the economy was still a hot mess.

 It looked like the Sarney government was about to be canceled. The first prez election in like 30 years went down in '89. The electorate totally ghosted the PMDB, like, big time. The party that was once seen as the GOAT in transitioning from military rule to democratic gov, the party is now lowkey linked to the hot mess and flop of the Sarney administration (Roett, 2010:83). Fernando Collor de Mello, from the National Reconstruction Party (PRN) snatched the throne in March 1990 (Roett, 2010:84). He wanted to flex on the national economy (Roett, 2010:83). He flexed his plans to flex the economy through mad trade vibes, privatizing state-owned companies, and going all in on foreign investment. OMG, as the country was like totally dealing with hyperinflation, the government like immediately dropped a sick new anti-inflation program. A new currency was like totally dropped and a tax on financial transactions was slapped on the stock of financial assets, on transactions in gold and stocks, and on withdrawals from savings accounts. It's like, so wild, right? So like, they were all like "no more price hikes or pay raises" and they got rid of all those cool money perks. Admin measures were like, introduced to flex on tax evasion, taxes were lowkey indexed and public service prices were hiked up. The exchange rate was lit, various feds gonna be shut down and 360k gov workers gonna get the boot (Roett, 2010:85). At this time inflation was like, hella high. In 1991, growth was like totally lit, rising to 1.5 percent (The World Bank Data). Itamar Franco totally took over from Collor in office and Fernando Henrique Cardoso became the finance minister in May 1993. He and his squad be like, "Let's yeet and undo the damage of the last decade." The Real Plan that was announced in December 1993 had three elements, fam: the intro of an The Bresser Plan, fam

However, the freezing of assets totally wrecked the economy, fam. 

There was, like, this mad fear of recession and all this political pressure from different groups in society, you know? Collars program had like zero clout, partly 'cause it was hella confusing and partly 'cause it flopped real quick. OMG, cuz they couldn't even handle inflation and the program's goals were so uncool, they had to drop Collor II in '91. SMH. The lit part of this plan was that it not only repeated some of the moves from the first plan, but it also stressed on flexin' better cash flow management and tightening the budgets of state enterprises. Neither of the two plans managed to slay inflation or handle the fiscal in the budget. The gov's econ team got replaced in May 1991 and a new finance minister started flexin'. Marcilio Marques Moreiras program was like, totally about keeping inflation in check and continuing to privatize state companies (Roett, 2010:85). But like, public spending was still going strong and the cash flow was way lower than we thought. Collor was like totally accused of being involved in an influence-peddling scheme in May 1992, and like gradually the public started hating on him. He got cancelled and yeeted from office later that year.