Thursday August 26 7:21 PM ET

Brazilians Protest Economic Reforms

By HAROLD OLMOS Associated Press Writer

BRASILIA, Brazil (AP) - Tens of thousands of Brazilians, fed up with belt-tightening reforms that keep unemployment high and wages low, converged peacefully on the capital Thursday with a loud message for the government: Change course or face growing social unrest. Under the close watch of almost 6,000 police and army troops, the so-called March of the 100,000 clogged streets around the city's modernistic, cone-shaped cathedral. Early police estimates said there were 60,000 protesters, but police officers later said the number could have reached 100,000. Organizers said there were up to 130,000. Red flags and banners calling for the resignation of President Fernando Henrique Cardoso colored the dry savannah landscape. Deafening music from a dozen decorated sound trucks created a carnival-like atmosphere on the broad lawns of the Esplanade of Ministries. The protest was organized by an array of 80 institutions, including leftist parties, labor unions and student groups. It was the biggest rally ever against the free-market reforms of Cardoso, who took office in 1995 and was re-elected last year. The protesters planned to deliver a petition with more than 1 million signatures asking for a congressional investigation into suspected irregularities in the 1998 privatization of Telebras, the federal telecommunications company. Some leaders also want to examine Cardoso's role in the episode - the first step toward impeachment proceedings. ``We see no future with Cardoso. The poor are going through sharp pain because of his policies,'' said Flavio Ramos, who traveled 600 miles by bus from the northeastern state of Ceara to press for ``drastic change.'' A public hospital nurse, Ramos earns the equivalent of $155 a month to support three children and his ex-wife. Like other government workers, he hasn't had a raise in five years. But he does have a job. Sandro Alexis de Oliveira, who worked for 10 years in a health ministry brigade fighting tropical diseases, was fired in July along with 6,250 other workers. The layoff was part of an effort to cut public spending and reduce the budget deficit. ``This rally has to raise some issues,'' he said. ``Cardoso has to change and govern for the people.''

The mood is very different from five years ago, when Cardoso swept to the presidency on the success of the anti-inflation plan he crafted as finance minister. Known as the Real Plan, it eliminated chronic four-digit inflation.

Cardoso pledged to mend and modernize the economy. He privatized government companies, broke up the federal oil monopoly and opened Brazil's borders to imports.

But the strong currency, the real, hurt exporters and aggravated weaknesses in the economy. The budget deficit ballooned, and the government was slow to take steps to fix it. When the Asian crisis rocked global markets in 1997, Brazil plunged into recession and eventually was forced to devalue the real. His popularity is at a record low. In a survey this month by the respected Vox Populi pollsters, 59 percent said he was doing a bad or terrible job.

``Brazilians believed that he was the one who would protect the real, that would avoid a devaluation,'' said political analyst Villas-Boas Correa. ``He is now paying the bill.''