ABSTRACT
Most of Brazil's economic development has been based on a two-fold model: the automobile industry and its spinoffs as economic motor for industrial development; and brutal income concentration after 1960 to put consumer buying power in the hands of the upper and upper-middle classes to stimulate demand for consumer durables. Brazil in 1987 is at a crossroads, confronting difficult decisions. On the internal front, the Sarney government is faced with huge problems: public deficit, investment decisions, tax and land reforms, and control of resurgent inflation. On the external front, Brazil is on an economic competition collision course with the United States, as the latter feels its last remaining comparative advantages in high technology and services threatened by newly industrialized country leaders, such as Brazil and India. Brazil's military views both economic and political stability as necessary conditions for national security and development.
