“Plano Real” now 20 years old

Launched on February 27, 1994, during the administration of Itamar Franco (1992-1994), the Plano Real (“Real Plan”) was a major economic stabilization program aimed at controlling the hyperinflation that was damaging the country. Before Brazil's currency changed from cruzeiro to real, Brazilians had the Unidade Real de Valor (“URV”), a virtual currency devised to facilitate the transition. Fernando Henrique Cardoso was the Finance Minister then, and took on the presidency the following year. He remained president for two terms, ending in 2002.

At a ceremony celebrating the 20th anniversary of the plan, held at the National Congress, the former president mentioned how tense the atmosphere was the day before the plan was implemented. “There was a lot of incomprehension. People were afraid the URV would be detrimental to workers. There was a lot of resistence on the ministers' part, but President Itamar was firm. In a short while, the population understood, and supported it. This is what matters. It's time to make other decisions – I won't say what it is, but the people feel as if it were time to point towards a new way,” he remarked.

While talking about the current economic policy, Cardoso said that Brazil moves at a pace a little different from that of the rest of world at the moment, and therefore adjustments are necessary. In his view, it cannot be said that Brazil's inflation is not under control.

“I can't be unfair and say that the government doesn't control the inflation. [When I was president], inflation levels were 20%, 30% per month. This doesn't mean we have to keep controlling it. Yes, I am concerned with meeting the inflation target program, and that with fiscal responsibility. There's no recipe for economic policy; it's navegation. We must see what we should do at every point,” said Cardoso, according to whom the economy should be evaluated at all times, and never regulated by a fixed idea.

Senator Renan Calheiros, president of Congress, highlighted the importance of the plan in stabilizing the economy and raising the income of the poorer sections of the population. In his speech, Calheiros said that this is all very positive, but there is still a long way to go if Brazil's inequalities are ever to be redressed. “What matters is that the first step has been taken, way back, in 1994, with the Plano Real, which is part of Brazils's heritage and its society,” the senator added. Calheiros also paid a tribute to former president Itamar Franco, who died in 2011.

Translated by Fabrício Ferreira