Presidency of Castelo Branco

The presidency of Castelo Branco began on April 15, 1964, after Marshal Humberto de Alencar Castelo Branco won the 1964 presidential election, and ended on March 15, 1967, when Artur da Costa e Silva took office.

His government occurred during Brazil's military dictatorship, whose main objectives were to break up the reformist nationalist ideals represented by the Brazilian Labor Party (PTB) and the João Goulart government's basic reform project. One of the first measures of his administration was the promulgation of Institutional Act Two, which abolished the multi-party system in Brazil and granted the President of the Republic powers to revoke the mandates of members of parliament and call indirect elections. In Brazilian foreign policy, he resorted to the United States for economic, political and military support. During his term, GDP grew by 12.6% (an average of 4.2%). Castelo Branco took over with inflation at 92.12% and handed over at 25.01%.

Institutional Acts and changes
The Castelo Branco government began under Institutional Act Number One, which revoked the political rights of former president Juscelino Kubitschek, then senator for Goiás, and other renowned parliamentarians and politicians. Similar sanctions also affected intellectuals, union leaders, students and civil servants. Three months after taking office, Castelo Branco's mandate was extended from January 31, 1966, to March 15, 1967, which led to the cancellation of the 1965 presidential elections. On November 26, 1964, the federal government decreed intervention in Goiás and extinguished the mandate of Governor Mauro Borges. On July 15, 1965, it sanctioned the new Electoral Code with the aim of improving the Brazilian electoral system by curbing fraud from registration to the voting process.

Despite implementing Complementary Acts to consolidate its power, the federal government kept the elections for governor scheduled for October 3, 1965: in Alagoas, the result was not ratified because it did not satisfy the absolute majority rule under Constitutional Amendment Thirteen, promulgated on April 8. In Goiás, Maranhão, Mato Grosso, Pará, Paraíba, Paraná, Rio Grande do Norte and Santa Catarina, the candidates supported by Brasília won, but the victory of the opposition in Guanabara and Minas Gerais provided support for the establishment of bipartisanship through Institutional Act Number Two, which created ARENA, the majority party supporting the government, and MDB, the opposition party.

As a result, the government made elections for state governors indirect and removed the autonomy of the capitals through Institutional Act Number Three, published in 1966. In order to guarantee support for its proposals, the Castelo Branco administration changed the balance of power in the states: it weakened Vitorino Freire's rule by supporting José Sarney as governor of Maranhão and removed Ademar de Barros from the São Paulo government. On September 3, twelve governors were indirectly elected and on November 15, 23 senators and 409 federal deputies were directly elected. Castelo Branco decreed a 33-day recess for the National Congress from October 20, in response to Congressman Adauto Lúcio Cardoso, president of the Chamber of Deputies, who had kept in office six oppositionists removed from their posts a few days earlier.

Castelo Branco also extinguished the União Nacional dos Estudantes (English: National Union of Students - UNE) and other organizations and resorted to forceful measures, such as invading the University of Brasilia. On December 7, 1966, he instituted Institutional Act Number Four, which decreed the drafting of a new constitution for Brazil. On January 24, 1967, the document was promulgated, but it only became effective when Costa e Silva took office on March 15. On February 9, the new Press Law was sanctioned.

Economic crisis in the 1960s
From 1962 onwards, Brazil experienced low growth rates, reaching just 0.6% increase in 1963. There was a fall in public and private investment and a rise in the public deficit, which caused inflation to accelerate, from 47.8% in 1961 to 51.6% in 1962 and 79.9% in 1963. Between 1964 and 1968, inflation was reduced from 92.1% to 25.5% a year.

Programa de Ação Econômica do Governo (1964-1967)
The Programa de Ação Econômica do Governo (Government's Economic Action Program - PAEG), designed by Roberto Campos, the Minister of Planning, and Octávio Gouveia Bulhões, the Minister of Finance, focused on promoting tax, financial and labor reforms and reducing regional imbalances. It imposed strict credit restrictions and instituted a new wage formula, causing severe deterioration in the purchasing value. The PAEG's objectives were:


 * Accelerating economic growth;
 * Containing inflation;
 * Reduce income concentration (regional, sectoral and personal);
 * Increase employment;
 * Correct the external imbalance.

In order to structure the Sistema Financeiro Nacional (National Financial System) and correct inflation, Castelo Branco established unpopular measures that would lead to relative economic success:


 * Changes to the tax structure (indirect taxes were raised and direct taxes reduced to protect strategic sectors due to the concentration of income);
 * Restrictive monetary policy (mainly low currency issuance);
 * Stabilizing prices and reducing purchasing power.

Terrorism
During the first half of 1965, the Três Passos Guerrilla was defeated and an explosion damaged the office of O Estado de S. Paulo. On July 25, 1966, a bomb exploded in the lobby of Recife International Airport. Aimed at Costa e Silva, a former army minister and presidential candidate, the attack killed journalist Edson Régis de Carvalho and retired vice-admiral Nelson Gomes Fernandes, and left fourteen wounded, including civil guard Sebastião Thomaz de Aquino. On the same day, explosions with no victims hit the headquarters of the União Estadual dos Estudantes (State Student Union - UEE) and the United States Information Agency (USIS).

Presidential succession
In a session that lasted three hours, Marshal Costa e Silva was elected President of the Republic under the ARENA ticket on October 3, 1966, after winning 295 votes in the National Congress, one of which was cast by opposition deputy Anísio Rocha, from Goiás.

Foreign policy
Brazil and Cuba broke off diplomatic relations on May 2, 1964. The following year, a civil war in the Dominican Republic put an end to the coup d'état that had ousted President Juan Bosch in 1963. However, an invasion by the United States, endorsed a posteriori by the Organization of American States, extended the conflict for a year in order to prevent a new Cuban Revolution. In the meantime, 280 Brazilian soldiers occupied the National Palace in Santo Domingo on June 1, 1965. Brasilia and Havana only resumed diplomatic relations in 1986.

Base Industrial de Defesa (BID)
The Base Industrial de Defesa (Defense Industrial Base - BID) is a set of state-owned or private companies that participate in one or more stages of research, development, production, distribution and maintenance of defense products (goods and services) and can contribute to the achievement of objectives related to Brazil's security or defense.

The Castelo Branco government was responsible for developing initiatives aimed at establishing a defense industrial complex. The incentives, combined with industrial potential, qualified human capital and a favorable international market, led the BID to evolve rapidly, resulting in Brazil becoming the world's fifth largest exporter in the defense sector by 1970.