Plano Trienal
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The Plano Trienal was a political answer to the inflation rising, that was in 1963 in the percentage of 78.4%,[1] and the deterioration of the external commerce. It was proposed by the Minister of Planning Celso Furtado under João Goulart government.
The plan was prepared in three months by a team led by Celso Furtado. The objective of the plan was to return GDP growth to the 7% of previous governments, after the complete failure of João Goulart's initial economic policies. It was a first attempt to start a plan for income distribution. This plan was based on the principle of progressive import substitution, blaming the rise of prices on the structural imbalances of the Brazilian economy, ignoring the effect of the exchange rate on prices.
To reach the dreamed-of performance of 7%, 3.5 trillion "cruzeiros" (the current currency) were allocated for investments at 1962 prices, assuming that this would cause a rise of per capita income from US$323,00 in 1962 to US$363,00 by 1965. There were also expectations for an impossible 70% growth of industry. For both sectoral goals were established of 4.3 million tons of iron slabs by 1965, 190 thousand cars and 270 thousand trucks, and growth of installed capacity and power generation to 7.432.00 kW in 1965.[2]
The objectives conflicted, showing evidence of poor planning: raising taxes while ignoring the effect on private investments, reducing wasteful public expenditures while nevertheless raising salaries, raising money from bank stock without creating any regulatory rule for it, and an attempt to obtain external resources even with hostility growing toward the foreign capital.[3]
