The Quadros Line

Since President Janio Quadros took power in Brazil seven weeks ago, no one save Quadros himself has been entirely sure where Brazil's foreign policy was heading. Some of Quadros' countrymen accused him of planning to deliver Brazil into the neutralist camp; others, despite denials from Foreign Minister Afonso Arinos, thought Janio's overriding ambition was simply to pull a few tail feathers out of the U.S. eagle. Last week, in his first State of the Nation address to Brazil's Congress, Janio sought to clear matters up.

Born Free. Janio denied that he is a neutralist. Said he: "Inspired by the ideals of democracy, we are born members of the free world . . . Brazil's ideological position is Western and will not change." What he does favor, Janio emphasized, is an independent Brazilian voice in world affairs and increased friendship with Communist nations. "The East-West conflict," he said, "tends increasingly to restrict itself to ideological attitudes. We have faith in ours, and we wish no ill to people who differ."

Coexistence, as Janio sees it, means that "Brazil cannot ignore the reality, vitality and dynamism of the Soviet states." Again he proclaimed his desire for diplomatic and trade relations with the Communist bloc and his intention of voting in the U.N. to readmit the Hungarian Communist delegation and to debate Red China's admission. But Janio was also careful to add that "We hope to place our relations with our traditional friends of the north on a fertile and realistic bilateral basis. We hope for U.S.

understanding and support." The Bad News. Quadros' hope of winning U.S. support rests chiefly on his domestic policies. He inherited from his flamboyant predecessor, Juscelino Kubitschek, a cumulative $1 billion budget deficit, prospects of a $700 million balance-of-payments deficit, and rampant inflation.

As a countermeasure Quadros last week abolished highly preferential exchange rates that in effect subsidized imports of oil, wheat, newsprint, fertilizers and machinery. He warned that this would cause price rises in consumer items. But, he predicted, it would increase the cost of living a mere 2%, v. Brazil's 85% price jump in the past two years.

As Quadros is keenly aware, his eco nomic austerity program is likely to jeop ardize his political popularity. But the reforms he promises -- antitrust legislation, land reform, a general tax overhaul --should stand Brazil in good stead abroad as well as at home. Last week, as President Kennedy declared such reforms to be one of the conditions of U.S. aid to Latin American nations, Quadros sent special envoys to both the U.S. and Europe to arrange stretch-outs of old debts -- and to investigate the chances for new loans.

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