ABSTRACT
Brazilian economic policy-making is in disarray and the Sarney presidency, having reaped major political benefits from the initial success of the Cruzado Plan, has yet to master the new policy environment created by its flawed implementation. In 1984, gross domestic product growth reached 4.5 percent due to two main factors: agriculture's good performance and the expanded output of manufactured intermediate goods made possible both by the recovery of the US economy – once again the principal market for Brazilian exports – and by the enhanced competitiveness of Brazilian industry. The Cruzado Plan is based on a number of measures coupled with a hypothesis on the character of recent Brazilian inflation. In addition, it bolsters confidence in Brazilian capacity to formulate and implement a stabilization program without foreign interference. Being investments of long maturation, only in the early 1980s did the new extractive programs and industrial plants begin to operate.
