Economy

During the Brazilian Miracle from 1968 to 1973, the Brazilian economy had grown at a rate of more than 10% per year, the fastest in the world. But due to the oil shock crisis in 1974, development fell to 5–6% per year. Because much of the country's oil had to be imported, Brazil's foreign debt began to rise. This strategy was effective in promoting growth, but it also raised Brazil's import requirements markedly, increasing the already large current-account deficit. The current account was financed by running up the foreign debt. The expectation was that the combined effects of import substitution industrialization and export expansion eventually would bring about growing trade surpluses, allowing the service and repayment of the foreign debt.^{[citation needed]}

President Geisel sought to maintain high economic growth rates, while dealing with the effects of the 1973 oil crisis. He maintained massive investments in infrastructure – highways, telecommunications, hydroelectric dams, mineral extraction, factories, and atomic energy. Fending off nationalist objections, he opened Brazil to oil prospecting by foreign firms for the first time since the early 1950s.^{[citation needed]}

Relaxation of dictatorship

Geisel adopted a more moderate stance with regards to political opposition. Together with his Chief of Staff, Minister Golbery do Couto e Silva Geisel devised a plan of gradual, slow democratization that would eventually succeed despite all the threats and opposition from hard-liners. He replaced several regional commanders with trusted officers and labeled his political program abertura and distensão, meaning a gradual relaxation of authoritarian rule. It would be, in his words, "the maximum of development possible with the minimum of indispensable security."^{[citation needed]}. In 1974 elections opposition won more votes than before. However, the torture of regime's left-wing and Communist opponents by DOI-CODI was still ongoing, as demonstrated by the 1975 murder of Vladimir Herzog.

In 1977 and 1978, the presidential succession issue caused further political confrontation between Geisel and hard-liners. Noting that Brazil was only a "relative democracy," Geisel attempted in April 1977 to restrain the growing strength of the opposition Brazilian Democratic Movement (MDB) party by allowing other opposition parties to run, thereby splitting the opposition vote. In October, he dismissed far-right Minister of Army, General Sylvio Couto Coelho da Frota, who had tried to become a candidate.^[9]

In 1978 Geisel had to deal with the first labor strikes since 1964 and electoral victories of the opposition MDB. In late December 1978 he announced the end of the authoritarian Institutional Act 5, allowed exiled citizens to return, restored habeas corpus and full political rights, repealed the extraordinary powers of the president, and planned the indirect election of General João Figueiredo as his successor.

In 2018, an unearthed CIA memorandum from 11 April 1974 sent by William Colby to U.S. Secretary of State Henry Kissinger details the summary executions of over 100 "subversives" which were personally authorized by Ernesto Geisel himself.^[10]

Foreign policy

In his 5 years of government, Geisel adopted a more pragmatic foreign policy. Despite being a conservative and deeply anti-communist, Geisel made significant overtures towards the communist bloc. Brazil established diplomatic relations with the People's Republic of China and socialist-led governments of Angola and Mozambique, signaling a growing distance between Brasília and Washington. Although both countries remained allies, Geisel was keen to seek new alliances and, more importantly, new economic opportunities in other parts of the world, especially Africa and Asia.

Brazil shifted its foreign policy to meet its economic needs. "Responsible pragmatism" replaced strict alignment with the United States and a worldview based on ideological frontiers and blocs of nations. Because Brazil was 80% dependent on imported oil, Geisel shifted the country from a critical support of Israel to a more neutral stance on Middle Eastern affairs. Brazil moved closer to Latin America, Europe and Japan.

The 1975 agreement with West Germany to build nuclear reactors produced confrontation with the Carter administration, which also scolded the Geisel government for abusing human rights. Frustrated with what he saw as the highhandedness and lack of understanding of the Carter administration, Geisel renounced the military alliance with the United States in April 1977.^{[citation needed]}

Foreign honours

• Grand Cross of the National Order of the Legion of Honour (French Republic, 26 April 1976)^[11]
• Honorary Knight Grand Cross of The Most Honourable Order of the Bath (United Kingdom, 4 May 1976)
• Collar of the Supreme Order of the Chrysanthemum (Japan, 10 September 1976)^[12]
• Grand Collar of the Military Order of Saint James of the Sword (Portuguese Republic, 1 June 1977)^[13]
• Grand Collar of the Order of Prince Henry (Portuguese Republic, 13 February 1979)^[14]