Instituto Cultural Minerva Institute of Brazilian Issues The George Washington University

Although the expressive increase of fiscal load verified in the period with the collection breaking historical records and reaching the mark of 31.8% of the GDP , the Brazilian State passed from a consolidated operational surplus of 1.3% of the GDP in 1994 to a deficit of 4% to 4.5% of the GDP in 1997 and recently it has reached 8% of the GDP. [...] In a short space of time, from the adoption of the exchange anchor with the Real having more value related to the dollar, we passed from a deficit in the balance of payments of the 0.3% of the GDP in 1994 for a figure that should be close to 4.5% of the GDP, during the last year. [...] The problem is the destination that the country chose for the US$ 130 billion of foreign saving absorbed in the last four years which is the sum of the deficits in the balance of payment in that period. [...] If in the thirties the world crisis was a consequence of problems in the market, in the eighties the crisis and the economic sluggishness had its main cause centered in the crisis of the State, due to the lack of effectiveness, high costs and the public debt. [...] It strengthens at the same time the formation of regional hypernational blocks and the decentralization to the local powers, the community and the individual, emptying the actual functions of the National State.