Brazil democracy at rocky point

Brazil's 20-year military dictatorship is coming to an end. While it has not, like Argentina's recently retired military leadership, been defeated at war and dishonored, it has racked up the world's largest foreign debt, put the country on the brink of bankruptcy, and lost credibility among Brazilians.

The political jockeying that will lead to selection next January of a civilian president - Brazil's first since 1964 - is under way.

But many Brazilians who have long demanded a return to democracy remain dissatisfied. The 1985 election is scheduled to be an indirect vote by Brazil's Electoral College, which is made up of elected representatives of the federal and local legislatures but is dominated by the Social Democrats, a party that is considered to be allied with the current military government.

A crowd estimated at 250,000 people demonstrated Wednesday in Sao Paulo, the nation's key industrial city, against the plan - and in favor of a direct popular election of the president.

The protest was far larger than its organizers anticipated and is described here as the largest in Brazil's history. More such demonstrations are expected in Rio, Sao Paulo, and Belo Horizonte.

Some opposition political leaders also are pressing for direct election - among them Ulisses Guimaraes, president of the Party of the Brazilian Democratic Movement, which has a wide popular following. Guimaraes wants a constitutional amendment for direct one-man one-vote, presidential elections.

The military, however insists that the vote will be indirect, according to its plan.

A good half dozen presidential candidates are regularly out on the hustings here. But many believe the man with the edge is Tancredo Neves, even though he is a member of the Brazilian Democratic Movement, not the Social Democrats. Mr. Neves is governor of the key state of Minas Gerais and was elected to that post in 1982 in direct elections for state and local offices accross the country. He is widely viewed as a man of moderation and appears to have the respect of all political parties and most military men.

Discussions with politicians, economists, and business and union leaders indicate that civilians expect the next government to take some drastic measures to grapple with the $93 billion foreign debt. These private- and public-sector leaders expect the next government to start by proclaiming a de facto moratorium on paying off its debt, with renegotiation of the terms to include lower rates of interest and a more favorable time frame for meeting payments.

''The stringent economic guidelines which the (military) government agreed to follow in order to obtain the International Monetary Fund's support last year, in seeking new credit lines and a new respite in repaying the principal and the interest of its loans abroad are unbearable,'' says Clovis Ferro Costa, a respected Brazilian economist and former congressman. ''They constitute an infringement upon our national sovereignty, they threaten to bring Brazil's economy to a state of collapse, and they disrupt in the most serious and dangerous way Brazil's society.''

The economy is near collapse by almost all standards. It was an economic near-crisis that spurred the armed forces to topple the civilian government 1964 . The Army wanted to fight corruption and inflation. Inflation at that time was close to 25 percent, and moving rapidly upward. But in recent months inflation has reached 210 percent.

Fifteen years after the world marveled at Brazil's period of economic progress, calling it an ''economic miracle,'' Brazil's economy is contracting (by 15 percent over the past three years), not growing.

Unemployment, close to 12 percent according to official figures, is really about 15 percent. And an 18 percent rate of inflation is expected in 1984, according to well-placed officials.

In order to meet debt-servicing deadlines, Brazil worked hard to get a $6 billion surplus in its balance of trade last year so that it could move ahead on meeting it debt payments. Part of this success came with increased exports, but it is also attributable to reduced imports, including the raw materials and other products Brazil's industry considers vital. The import slowdown severely damaged the pharmaceutical, chemical, and fertilizer industries. In 1983, trade and services were reduced by 5 percent. Investments are paralyzed and, thus, so are exports.

''Capital formation is badly hurt,'' says Niveo Friedrich, a leading Brazilian industrialist. Savings represented 25 percent of gross national product in 1963, but now only 12 percent. Meanwhile, austerity measures adopted last fall have reduced purchasing power by 13 percent.

As for the poor, the roughly 50 million people who are chronically undernourished, ''Their situation has become intolerable; they are hungry,'' says Joao Dantas, vice-president of Rio de Janeiro's Commerce Association and former editor of the respected daily Diario de Noticias. Supermarkets and grocery stores are looted nearly every day in Sao Paulo, Fortaleza, Recife, and Rio. (In one month alone, 45 attacks were registered in Sao Paulo, 80 in Fortazela, 22 in Rio.)

Angered by the audacity of muggers and of youth gangs, Brazilians have increasingly taken the law into their own hands. There have even been lynchings. Two months ago, Joilson de Jesus, a 15-year-old boy who had ripped a necklace from a woman's neck on in of Sao Paulo, was kicked to death by an angry mob.

In this regard, ''Pixote'' - a Brazilian movie shown in the United States that concerns a destitute boy whose life on the streets and in jail leads him to become a hard-core criminal - seems prophetic.

Meanwhile, as a result of five years of drought in Brazil's northeast, 10 million people are flagelados, that is, people who go hungry, having lost their crops and jobs. It is estimated that 3 million Brazilians are in this position. In some areas, the only support the federal government is giving the flagelados is through a special public works program that pays $15 a week.

Meanwhile, Pharaonic projects such as the Transamazon Road across the vast jungle north to Peru - which cost billions of dollars - have been left unfinished.

Brazil's present difficulties are to some extent the fault of its leaders, who did not foresee the oil crisis and the world recession. But Brazilians also blame the nation's predicament on Western banks, which pressed Brazil to accept loans, instead of reinvesting petrodollars, and on so-called Reaganomics, which many Brazilians hold responsible for the dramatic rise of interest rates.

''The interest rates and the collapse of market prices of raw material represent 40 percent of our debt,'' says Prof. Celso Furtado, a leading economist.

But in the long run, many Brazilian economists think the nation's future is promising. It has vast proven reserves of bauxite, coal, some gold, uranium, huge reserves of phosphates, and potassium. (Brazil already exports billion a year of potassium. It produces 500,000 barrels of oil daily, and could be self-sufficient in 10 years. And it generates 8 billion kilowatts of hydroelectric energy, and expects to reach 18 billion by the end of the century.)

This nation also produces coffee, sugar, and silk, and its high-technology industries are growing. (It exports microcomputers and combat vehicles, among other products.)

Many observers do not expect the military to give in to demands for direct elections in 1984 to replace the military President, Gen. Joao Baptista de Oliveira Figueireido.

''Direct elections - given the present angry, resentful mood of the middle class, not to speak of the workers' (mood) - could bring into power a left-wing populist leader such as Rio de Janeiro's governor Lionel Brizola,'' says one military man.

Brizola is feared by many military officers who believe that he would follow in the footsteps of Argentine civilian President Raul Alfonsin, who has allowed and even spurred his country's judiciary to punish the military for human-rights violations. In this country, too, opposition members have been tortured and killed.

It would take a two-thirds majority of Congress to change the Constitution to provide for direct elections. Since the election is only a year away and the Social Democrats control the the lawmaking body, Congress is unlikely to switch the electoral plan, many analysts say.

The key candidates are:

* Col. Mario Andreazza, interior minister and former transporation minister. Andreazza, a Social Democrat, is reported to be President Figuereido's personal choice. However, some Brazilians allege that he is linked to major cases of corruption. His chief support is said to come major corporations that benefited from his government-sponsored projects - among them the Transamazon Road).

* Paulo Maluf, former governor of Sao Paulo. Maluf, a businessman, is viewed as a strong candidate although he is believed to be disliked by Figuereido and by a share of his own Social Democratic Party. The tensions apparently stem from his alleged links to financial scandals.

* Aureliano Chaves, Brazil's Vice-President. Chaves, also a Social Democrat, is a moderate and is widely viewed as honest, although lacking charisma. He may suffer from the stigma of having served a military president.

* Tancredo Neves, governor of Minas Gerais. A leading figure in the Brazilian Democratic Movement, Neves served as minister of justice under President Getulio Vargas in the '40s and as prime minister under President Joao Goulart.

''Tancredo is not a man who will rock the boat and try to humiliate or punish the military,'' says journalist Mauro Santayana. ''He is not a wild leftist. Essentially he is a moderate, a liberal, . . . a man of strong democratic convictions and a pragmatist.''

Governor Neves told the Monitor:

* ''The return to democracy in Brazil is slower and more complicated than in Argentina. Brute force has rarely been used in Brazil, for political purposes. We did not lose a war like the one in the Falklands. The slowness of the process of redemocratization does not worry me. There are no shortcuts in history. The main thing is to have the train reach the destination, not its speed.

* ''Regarding Brazil's foreign debt, I think we must honor our pledges. But there are no miracles. We must be allowed to meet our obligations under reasonable, practical conditions. I am thinking about time frames and interest rates.''

Despite its present economic and electoral turmoil, Brazil remains an economic giant and force in world affairs. It's vast agricultural fields may wind up serving as a world granary. Some say it is the only country which in the 21st century may be in a position to stand as an equal with the US, the Soviet Union, China, and India.