Eh Isso Ai Essays

1270 Words Sep 23rd, 2015 6 Pages
Collor Plan I The Collor Plan is the name given to the set of economic reforms to stabilize the inflation. It was created during the presidency of Fernando Collor de Mello from 1990 to 1992. The official name of the plan was New Brazil, but it became strongly associated with the figure of the President, then, "Collor Plan" became the official name. The Collor plan combined fiscal and financial liberalization with radical measures to stabilize inflation. The main stabilization measures were accompanied by foreign trade reform programs, Industrial and Foreign Trade Policy, better known as PICE (Política Industrial e de Comércio Exterior), and a privatization program entitled the National Privatization Program, better known as PND …show more content…
* A cut in public spending. * Reduce the state machine with the layoffs and privatization of state enterprises. * Open of the internal market, with the gradual reduction of import duties.
During one year, from March 1989 to March 1990, the inflation reached 4.853%, and the previous government had several failed plans to curb inflation. This plan was designed to put an end to the crisis, adjust the economy and raise the country from the third to the First World. The Collor government should ensure that the demonetization will be "orderly" and "slow" in order to keep inflation down, but a Rapid and uncontrolled demonetization of the economy is seen as the cause of failure of inflation stabilization plans adopted previously. To control the speed of demonetization, Collor could use a combination of economic tools such as taxes, exchange rates, credit and interest rates. But, the government opened several "gaps" that contributed to the increase in cash flow: taxes and government accounts issued before freezing could be paid with the old Crusado, creating a form of "liquidity gap", which was fully exploited the private sector. Several exceptions to individual sectors of the economy have been opened by the government, as in retirement savings, and the "special financing" on the government payroll.
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