International Outlook: GLOBAL WRAPUP
The country is moving ahead with economic reform despite the deepening troubles of President Fernando Collor de Mello. The likely impeachment trial of Collor in the Senate won't delay a scheduled Oct. 1 cut in Brazil's tariffs, to an average 16.9%, down from 20.9% at present. Nor will it affect the planned opening of Brazil's long-protected computer market to world competition on Oct. 29.
But business is putting investment decisions on hold until the fate of the president, who is accused of receiving millions of dollars in an influence-peddling scheme, is resolved. That could take several months. "No one will invest a penny or make any important decisions with regard to future plans," says a U.S. executive.
If Collor is convicted or resigns, he would be replaced by Vice-President Itamar Franco, who favors a slower pace of economic reform. So Paulo Governor Luiz Antonio Fleury has urged that the more respected Cabinet members be kept on until the crisis has passed. But if Franco takes office, he seems likely to shuffle most of the Cabinet, including Economy Minister Marclio Marques Moreira, darling of the foreign banks. But such a change worries investors less than the ongoing uncertainty. "We just want to know who will be calling the shots," a foreign banker says.Edited by Stanley Reed