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TRANSPORTATION. Businesslike operation of the fabulously inefficient government-owned railroads; construction of 6,200 miles of roads; improvement of existing roads. Purchase of 50-odd ships of various tonnages to trim the country's dollar-draining ocean-freight bills.
FOOD. Build silos, warehouses and refrigerated slaughterhouses (upwards of 25% of the food that Brazilian farms now produce spoils for lack of adequate transport and storage facilities); make more and easier credit available to farmers; promote bigger wheat crops.
MINING & MANUFACTURING. Boost coal production; up iron-ore exports, now 1,600,000 tons a year, to 10,000,000 tons. Promote manufacture of locomotives and heavy machinery; create an auto industry that will produce 100,000 cars, jeeps and trucks a year by 1960.
OIL. Kubitschek is up against Brazilian nationalism, which keeps foreign capital out of oil development. Petrobrás, the government oil monopoly, now gets only 6,500 barrels a day out of the ground, about 3% of consumption. Stuck with Petrobrás, Kubitschek expects to do no better than keep the bill for oil imports, some $280 million a year, from getting bigger as national consumption goes up.
Dr. Kubitschek's prescription is largely designed to remedy Brazil's foreign-exchange shortage, which ranks with inflation as the nation's most serious economic malady. Even with imports curbed by government controls, Brazil runs up exchange deficits. The two main exports, coffee and cotton, are subject to price tremors. About half of Brazil's export earnings go for debt service, ocean freight, oil and wheat; what is left for machinery, raw materials and all other imports amounts to some $700 million a year—about $12 per Brazilian. The shortage of foreign exchange stunts economic growth by holding down Brazil's capacity to service foreign loans and pay for capital goods. The foreign-debt burden is already staggeringly heavy: $1.7 billion, some $900 million of it owed to the U.S.
Dizzy Spiral. Kubitschek expects his development program to help cure the inflation sickness by making more goods available. The puzzler here is how to finance the government's share of the program and at the same time slow down the currency presses. In the past few years, the government custom of printing new money to meet budget deficits has kept inflation spiraling dizzily. Retail prices have almost doubled within three years, rising faster than wages. Among Brazilian workers, the resulting sag in real wages has brought on a rancorous discontent.
To make much headway, Kubitschek & Co. will have to attract a lot of foreign capital to Brazil. Again and again during his preinauguration tour, Kubitschek stressed that his administration will welcome foreign investment. For the power and transportation sectors of the program, the administration will also need development loans from the U.S. Government. Urgently needed is U.S. aid in refunding Brazil's existing foreign debts so as to lessen the yearly bite. Just at inauguration time, the U.S. Export-Import Bank announced equipment loans totaling $55 million to Brazilian government-run enterprises ; obvious in the timing was Washington's intent to show its good will toward the new administration.