Kubitschek Justifies Capital Change As Economically Sound for Brazil

For Juscelino Kubitschek de Oliveira, the evening spent at the University was one of reminiscence over his accomplishments as President of Brazil. Stopping by Cambridge in the middle of a rapid lecture tour of the United States, the man who preceded Janio Quadros gave a quick sketch of Brazil's major economic problems and the measures his Administration had designed to deal with them.

Since he is best known as the builder of Brasilia, he explained in some detail why he had felt the much-criticized new capital necessary. Describing the vast Western region of virgin forest and Indian tribes, where "per capita income is exactly zero," he stressed the importance of "immediate integration of that region with the economic life of the country."

Brasilia, he said, fulfills this need by opening up trade routes to the North-west; furthermore, "numerous population centers are already springing up along the highways." Besides, the idea of such a city has so long been debated that Kubitschek concluded building it was a "constitutional mandate."

For the tremendously poor Northeast as well, he pointed out, his Administration found a long-range economic program. Essentially, it replaced "mere palliatives" of temporary assistance with a new regional agency to cope with strikingly low income and perennial drought.

Yet, curiously, Kubitschek's suggestions that were to have the widest reach and scope concerned the relatively prosperous area of the central South. (This area, which includes the most heavily industrial sectors such as those of Sao Paulo, is generaly considered the key to overcoming Brazil's most perplexing economic problem: an unfavorable balance of trade.)

As a method to drive his country off a single-export economy, and indeed to aid collective development in Latin America as a whole, Kubitschek proposed to President Elsenhower in 1958 an "Operation Pan-America." "Only with the name changed," he said amusedly, it has at last been adopted as the Alliance for Progress.

The Alliance--in which Kubitschek evidently places much confidence--he describes as "not just stop-gap assistance." One of his chief hopes is that it can stabilize commodity and raw material prices in South America.

In response to questions on more recent aspects of Brazil's politics and economics, Kubitschek made the following points:

* "Brazilians prefer to act peacefully," but there may be a revolution. "I don't think the revolution will be started by the communists, but they will be the winners in the end." The example of Cuba showed above all that "Operation Pan-America" should have started much sooner.

* Former President Quadros (who arrived at the southern port of Santos yesterday) "has created no great stir," and will probably settle down to being "just another Brazilian."

* American taxpayers ought not to mistrust his country's use of Alliance funds. Since Presidents do not "dip into public funds" and a critical free press is always active, the U.S. has no cause for worry about Brazilian expenditure of light capital abroad. (Kubitschek did not comment on Brazil's current inflation.)

* "We have no hostility or animosity against foreign capital," despite Rio Grando do Sul's recent taking over of the U.S. operated International Telephone and Telegraph Company. IT & T is a utility company, and so a special case.

"Sometimes one had to wait for 10 years to get a phone.... Political conditions do not allow for increased rates which would permit better services." Private industrial companies "are another thing."