Brazil's Fresh Start

INSTABILITY in Brazil is not the same as instability in, say, Peru. Brazil's sheer size - 40 percent of Latin America's people and 40 percent of its economic activity - gives events there particular potency.

That's why last week's peaceful transfer of power from a Brazilian president beset by scandal to a new chief executive was heartening. Little in the country's turbulent political history would have guaranteed such a development. But the military stayed on the sidelines - as they haven't in the past - and the constitutional succession worked, with Itamar Franco, the vice president, taking over for Fernando Collor de Mello, who resigned just before the Brazilian Senate could formally try him under a bill o f impeachment.

The irate senators tried him anyway, finding him guilty on corruption charges. While the relatively smooth functioning of Brazil's democratic processes in this instance is encouraging, little else is. The country's economy is still chaotically out of balance, with inflation running between 1,100 and 1,200 percent annually and unemployment high. Mr. Collor had instituted a program of economic reforms designed to combat inflation, but it was perceived as coming down especially hard on lower-income Brazilia ns.

The influence-peddling scandal, with Collor's family allegedly getting $8 million in kickbacks, was a final straw for most Brazilians.

Mr. Franco plans to shift the country's priorities from fighting inflation toward the creation of jobs. That's an understandable political choice, and Franco has long been a champion of Brazil's 90 million poor citizens. It adds, however, to doubts about the country's economic future, since Franco probably has in mind increased public spending, which could fuel more inflation and ultimately hurt all Brazilians.

The new president says he sees the dangers and won't let inflation run wild. His biggest task will be to forge a popular consensus behind his policies. Brazil's politics are deeply fragmented along regional and class lines.

Brazil's efforts to shake free of its problems deserve support from outside the country as well as within. A stronger relationship between the United States and Brazil would be useful. The relationship has often gotten hung up on minor trade disputes, instead of focusing on a productive partnership between the two largest countries in the hemisphere.

The Clinton administration can break new ground in this regard, and thus help solidify Brazil's commitment to democracy.