241:
advisors of PT party candidate Luiz Inácio Lula da Silva, during the period between the general election and the runoff. In spite of the differences in their general economic strategies, these competing candidates failed to develop their own stabilization policies at a time of rapid price increases and risk of hyperinflation during the second half of 1989. The proposal to block liquidity originated in academic debate and was imposed upon the main presidential candidacies
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Brazil had suffered through several years of hyperinflation: in 1989, the year before Collor took office, average monthly inflation was 28.94%. The Collor Plan sought to stabilize inflation by "freezing" government liability (such as internal debt) and restricting money flow in order to halt inertial
358:
While previous privatizations had been conducted by the government in the 1980s, at time of Collor's inauguration, no large-scale privatization program had been attempted. Sixty-eight different companies were added to the PND and slated for privatization. Unlike traditional privatization programs,
226:
Cruzado, creating a form of "liquidity loophole" which was fully exploited by the private sector. A number of individual exceptions to individual sectors of the economy were opened by the government, such as retirees' savings and "special financing" for the government payroll. As the government
206:
Rapid, uncontrolled re-monetization of the economy had been named as the cause the failure of the previous economic stabilization plans in controlling inflation. The Collor government would have to "throttle" the re-monetization in order to keep inflation down. To do so, it could utilize a wide
203:, the rate of inflation dropped from 81% in March to 9% in June. The government faced two choices: they could either hold the freeze, and risk a recession brought about by the reduction of economic activity, or re-monetize the economy by "unfreezing" money flow and risk the return of inflation.
240:
The Collor Plan itself began to be formatted by the president-elects advisors at the end of
December 1989, after his victory in the runoff election. The final draft was probably strongly influenced by a document discussed by the advisors of PMDB party candidate Ulysses Guimarães, and later by
246:
Ultimately, the government was unable to reduce spending, reducing its ability to use many of the aforementioned tools. Reasons ranged from an increased share of the federal tax revenue to be shared with the individual states to a "job stability" clause for government employees in the
366:
sectors. The PND also ended several government monopolies whose possible negative social impact was expected to be countered by the increased competition. This increased competition, resulting from the aforementioned PICE policies, was thought to reduce the chance of the emergence of
350:, argued that the policy seemed to have produced that very contradictory effect: local production saw improvements in quality and productivity in face of foreign competition, but it simultaneously curbed domestic innovation due to unrestricted competition from imported technology.
221:
economists to the Collor government's failure to control the re-monetization of the economy. The government had opened several "loopholes" which contributed to the increase of the money flow: Taxes and other government bills issued prior to the freeze could be paid with the
359:
which sought to finance a government's deficit, the PND had a stated goal of providing the government with the means with which they could purchase back the public debt. Government bonds were used in large quantities as currency to pay for privatized companies.
309:, on October 2, 1992. President Fernando Collor de Mello had been impeached by congress four days earlier, on September 28, 1992, over charges of corruption in an influence-peddling scheme, marking the end of his government's attempts at ending hyperinflation.
17:
327:
Selected policies included the gradual reduction of tariffs (with the selective protection of certain key industries), an export financing mechanism through the creation of a
Foreign Trade Bank (similar to the American
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Marcílio's plan was considered more gradual than its predecessors, utilizing a combination of high interest rates and a restrictive fiscal policy. At the same time, prices were liberalized and, working along with
73:
The Collor plan combined fiscal and trade liberalization with radical inflation stabilization measures. The main inflation stabilization was coupled with an industrial and foreign trade reform program, the
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210:
For the next few months after the plan was implemented inflation continued on an upward trend. By
January 1991, nine months after the plan began, it had climbed back to 20% a month.
171:
Three separate plans to stabilize inflation were carried out during Collor's two years in power. The first two, Collor Plans I and II, were headed by the finance minister,
113:. The actual plan to be implemented was written by Antônio Kandir and economists Ibrahim Eris, Venilton Tadini, Luís Otávio da Motta Veiga, Eduardo Teixeira and João Maia.
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603:
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Running along in parallel with the Collor Plan was the PICE, a program which aimed to both raise real wages and promote economic openness and trade liberalization.
259:, both former finance ministers, who had predicted at the start of the plan that the government's fiscal situation would make it impossible for the plan to work.
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combination of economic tools to affect the speed of re-monetization, such as taxes, exchange rates, money flow, credit and interest rates.
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On paper, the PICE had seemingly contradictory goals: to stimulate the entry of foreign companies while increasing local innovation.
305:
Inflation rates during the Marcílio Plan remained at hyperinflationary levels. Marcílio left the finance ministry to his successor,
962:
385:
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with new financial instruments which included in its yield calculation the anticipated rates of both private and federal papers.
810:
768:
199:
The freeze caused a strong reduction in trade and output of industry. With the reduction in the money supply from 30% to 9% of
131:
Freezing of 80% of private assets for 18 months (receiving the prevailing rate of inflation plus 6% in interest while frozen),
855:
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Altogether, some 18 companies worth US$ 4 billion were privatized between 1990 and 1992, mostly in the steel, fertilizer and
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1052:
969:
562:
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1010:
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According to Carlos
Eduardo Carvalho, from Departamento de Economia da Pontifícia Universidade Católica de São Paulo:
176:
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903:
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761:
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The second Collor Plan took place in
January 1991. It included a new freezing of prices and the replacement of the
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The extinction of several government agencies, with plans for a reduction of over 300,000 government employees,
116:
The plan was announced on March 16, 1990, one day after Collor's inauguration. Its intended policies included:
55:
251:
which prevented the size reduction as announced at the start of the plan. This vindicated economists such as
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957:
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The plan managed to produce only a short-term drop in inflation, and it began to climb again in May 1991.
147:
98:
46:), is the name given to a collection of economic reforms and inflation-stabilization plans carried out in
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587:. ECONOMIA. Niterói. Vol.4, No.2, p.283-331, July–December 2003. Retrieved September 8, 2007.
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286:-educated economist who was at the time of his nomination the Brazilian ambassador to the
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On May 10, 1991, Zélia was replaced as finance minister by Marcílio
Marques Moreira, a
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86:, and a privatization program dubbed the "National Privatization Program" (Portuguese:
66:), but it became closely associated with Collor himself, and "Plano Collor" became its
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Between the end of the Marcílio Plan and the beginning of the next "named" plan, the
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462:
445:
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805:
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16:
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The failure of the Plano Collor I in controlling inflation is credited by both
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mechanisms and the use of government-generated demand for high-tech sectors.
984:
934:
368:
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issued more and more exceptions granting liquidity, these were later dubbed
214:
1113:
67:
815:
97:
The plan's economic theory had previously been laid out by economists
162:
Stimulus of privatization and the beginning of economic deregulation.
47:
753:
720:
15:
629:
Hiperinflação e
Estabilização no Brasil: o Primeiro Plano Collor
757:
585:
O fracasso do Plano Collor: erros de execução ou de concepção?
200:
635:. 11 (4). October–December 1991. Retrieved September 8, 2007.
563:
Resultados
Mensais por Grupos - 1979 a 1999 - Brasil e Áreas
505:
The Collor Plan and the
Industrial and Foreign Trade Policy
316:, inflation continued to grow, reaching 48% in June 1994.
645:
Ministros de Estado da
Fazenda: Marcílio Marques Moreira
58:, between 1990 and 1992. The plan was officially called
332:), reduction in customs duties, implementation of anti-
421:. December 30, 2004. Retrieved on September 8, 2007.
134:
An extremely high tax on all financial transactions,
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998:
943:
912:
864:
791:
697:
Fundação Getúlio Vargas. Retrieved August 17, 2007.
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Increase in the prices charged by public utilities,
723:. December 31, 2002. Retrieved September 9, 2007.
381:Timeline of Brazilian economic stabilization plans
528:
526:
524:
128:at a parity exchange rate (Cr$ 1.00 = NCz$ 1.00),
627:Bresser-Pereira, Luiz Carlos. Nakano, Yoshiaki.
544:. pp.132-150. 1992. Retrieved September 8, 2007.
302:secured to shore up internal currency reserves.
153:Gradual economic opening to foreign competition,
668:Ministros de Estado da Fazenda: Gustavo Krause
413:Welch, John H. Birch, Melissa. Smith, Russell.
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8:
618:. August 1990. Retrieved September 8, 2007.
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320:Industrial and Foreign Trade Policy (PICE)
120:Replacement of the existing currency, the
80:Política Industrial e de Comércio Exterior
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685:September 29, 1992: Collor's Impeachment
534:O Décimo-primeiro Plano de Estabilização
24:, responsible for the implementation of
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446:"As origens e a gênese do Plano Collor"
444:Carvalho, Carlos Eduardo (April 2006).
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516:Institute of Applied Economic Research
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344:Institute of Applied Economic Research
140:Elimination of most fiscal incentives,
175:. In May 1991, Zélia was replaced by
156:Temporary freeze on wages and prices,
7:
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601:O Plano Collor e a Volta da Inflação
518:. 1997. Retrieved September 8, 2007.
354:National Privatization Program (PND)
538:Combate à Inflação e Reforma Fiscal
88:Programa Nacional de Desestatização
76:Industrial and Foreign Trade Policy
346:(IPEA), an independent government
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386:List of economic crises in Brazil
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737:Collor´s Official web site, The
298:, a US$ 2 billion loan from the
463:10.1590/S0103-63512006000100003
674:. Retrieved September 8, 2007.
658:. Retrieved September 8, 2007.
599:Bresser-Pereira, Luiz Carlos.
569:. Retrieved September 8, 2007.
532:Bresser-Pereira, Luiz Carlos.
1:
167:Inflation stabilization plans
745:Collor´s Official web site,
633:Revista de Economia Política
683:Lattman-Weltman, Fernando.
300:International Monetary Fund
253:Luiz Carlos Bresser-Pereira
249:1988 Brazilian Constitution
1194:
672:Brazilian Finance Ministry
656:Brazilian Finance Ministry
612:Indicadores Econômicos FEE
583:Carvalho, Carlos Eduardo.
1178:1990s in economic history
1173:Economic crises in Brazil
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1021:Automobiles manufactured
690:August 14, 2007, at the
177:Marcílio Marques Moreira
56:Fernando Collor de Mello
1079:Federative units by HDI
1074:Federative units by GDP
710:BNDES: Histórico do PND
257:Mário Henrique Simonsen
90:), better known as the
1119:Central Bank of Brazil
173:Zélia Cardoso de Mello
148:floating exchange rate
99:Zelia Cardoso de Mello
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22:Brazilian Central Bank
342:Later studies by the
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1168:Currencies of Brazil
137:Indexation of taxes,
1016:Automotive industry
846:Stabilization plans
419:Library of Congress
82:), better known as
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606:2012-02-08 at the
510:2011-05-19 at the
146:The adoption of a
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1109:Brazilian disease
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831:Brazilian Miracle
785:Economy of Brazil
614:, 18 (2): 55-61.
503:Villela, Anibal.
415:ECONOMICS: BRAZIL
64:Plano Brasil Novo
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806:Coffee cycle
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856:2014 crisis
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296:Pedro Malan
196:inflation.
107:Álvaro Zini
50:during the
34:Collor Plan
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1089:Corruption
1028:Healthcare
990:Eletrobras
899:Irrigation
801:Gold cycle
392:References
348:think tank
330:Ex-Im Bank
314:Plano Real
284:Georgetown
219:monetarist
52:presidency
38:Portuguese
28:in Brazil.
1084:Companies
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985:Petrobras
935:Fome Zero
215:Keynesian
1137:Category
1006:Industry
713:Archived
688:Archived
648:Archived
604:Archived
508:Archived
375:See also
126:Cruzeiro
68:de facto
1147:Commons
1043:Tourism
1038:Exports
963:History
913:Welfare
816:Fazenda
793:History
334:dumping
124:by the
1114:Camelô
1033:Mining
945:Energy
894:Coffee
884:Orange
879:Banana
811:Empire
70:name.
48:Brazil
1062:Misc.
721:BNDES
1069:Real
980:Vale
889:Beer
874:Wine
567:IBGE
255:and
217:and
109:and
84:PICE
32:The
20:The
458:doi
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224:old
201:GDP
187:).
92:PND
54:of
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