History of South America

Neoliberalism in Brazil

neoliberalism in Brazil begins with the government of Fernando Collor de Mello and is consolidated with the arrival of Fernando Henrique Cardoso to the presidency.

There was a reduction in public investments and privatization of state-owned companies.


With the end of the military dictatorship, Brazil needed to end the main economic problem:inflation. Brazilian industry was also lagging behind technological advances in other western countries.

For this, Collor de Mello proposes the creation of a new currency, change of labor laws, opening of the national market and privatization of state-owned companies. These measures became known as the Collor Plan.

In order to open up Brazil to international markets, the country participated in the founding of some regional economic blocs such as Mercosur.

However, due to corruption allegations and the impeachment suffered in 1991, President Collor cannot carry out his ideas.

In this way, President Itamar Franco calls Senator Fernando Henrique Cardoso to be Minister of Finance. In this folder, Cardoso would outline the Real Plan that ended inflation in Brazil and stabilized the economy.

FHC Government

With the success of the Real Plan, Fernando Henrique Cardoso won the presidential elections in 1994, defeating Luís Inácio da Silva, aka Lula.

With the arrival of Cardoso to power, the State began to have another function. From the developmental state and major investor, as was the case with Getúlio Vargas, JK and the military dictatorship, the state would become the regulator.

Therefore, several regulatory agencies were created in order to dictate the rules for new companies that started to operate in the country. For example:as state telephony was extinguished, private companies have to submit to Anatel to be able to operate in Brazil.

Thus, FHC was able to implant neoliberal ideas in Brazil that included:

  • Privatization of state telephony such as Telebras, Telerj, Telesp, Telemig, etc. and the national company Embratel;
  • Sale of state banks such as Banerj, Banestado, Banesp, etc.
  • Privatization of companies such as Embraer, Vale do Rio Doce and Companhia Siderúrgica Nacional, among others;
  • 20% reduction of federal and state civil servants through early retirement or dismissal;
  • Outsourcing of workers and various state services;
  • Opening the domestic market to foreign companies.


The consequences of neoliberal policy in Brazil can still be felt today.

Despite the Lula government having regained the role of the State as an investor, sectors that were protected by the public power, such as education, saw investments decrease and the participation of private capital increased.

Likewise, the increase in concessions for foreign companies to operate in Brazil. The concession is not a privatization. It is simply a matter of granting the investor the operation of a service under certain conditions. Currently, several Brazilian highways work this way.

Read more :

  • Neoliberalism
  • Washington Consensus
  • Fernando Henrique Cardoso
  • Economic Crisis in Brazil
  • Economic Liberalism
  • Economic Globalization
  • The History of Brazil
  • Welfare State

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