How did this military dictatorship end? Just as with colonialism, Brazil experienced a remarkably bloodless independence from authoritarian rule. Moderates in the military regime themselves began to push for civilian rule by the mid-1970s. The last decade of military rule was essentially an internal regime battle between moderates and hardliners within the army. Interestingly, much of military’s ability to transition into civilian rule came from the fact that the leadership had consistently rotated into the role of “General President” thereby preventing the establishment of an all-powerful dictator. Throughout the military rule, additionally, the Brazilian Congress was always in existence (unlike in Chile and Argentina), albeit mostly powerless. At the least, this meant that there was a natural governmental body ready to take over civilian rule.
A new generation of military officers emerged in the 1980s who had never lived through the era prior to military rule. They found the repression damaged the reputation of the military in the eyes of the population. A spirited grassroots campaign emerged with millions of supporters donning T-shirts with slogans like “I want to vote for president.” The military agreed to a presidential election, but an indirect one that would take place amongst members of Congress.
Tancredo Neves, the governor of Minas Gerais, a quiet and unassuming centrist, won the first civilian election since the early 1960s. The public was thrilled and the military had confidence in his moderate program. On the eve of his inauguration, March 15, 1985, he was rushed to a hospital with severe stomach pains. His intestine ruptured during surgery. He was sent by airplane to the best hospital in Sao Paulo and he died on April 21, 1985 after six additional surgeries. It was a nightmare start to the democracy.
The Vice-President, Jose Sarney, assumed power and was tasked with stemming an inflation crisis and rebuilding democracy. The Congress got to work writing a new Constitution, which provided for a long list of civil rights. The initial stabilization plan to combat inflation was a success, dropping it to less than 2% per month. But inflation rose again, drastically, by 1987 and then reached 1038% in 1988 and 1783% in 1989. Additionally, Brazil faced a foreign debt crisis, which forced it to spend much of its foreign currency to pay off debt rather than to support the domestic economy. The first years of democracy did not instill confidence. Brazilians, especially the elite, began to leave the country in waves to emigrate to the United States and Japan.
In the early 1990s, the new Brazilian president Fernando Collar, was exposed in a widespread corruption scandal. A Congressional investigation led him and his allies to try to buy off members of Congress. He was impeached and then he chose to resign before the Senate could convict him and throw him out of office. Regardless, the Senate still voted, 76 to 5, to remove him.
The man who brought political and economic stability to Brazil was Fernando Henrique Cardoso, a former sociology professor. As finance minister, Cardoso took a multi-pronged strategy to attack inflation, pushing for a balanced budget and a gradual transition to a new currency, the real. The introduction of the real came at the right moment: Brazil had just won its fourth World Cup soccer championship leading to a boost in confidence and nationalism. Under Cardoso’s leadership, inflation dropped to 4% by 1997.
Cardoso won the 1994 presidential election and continued a policy geared toward stabilization of the Brazilian economy, privatization, and ensuring low inflation.