Brazil's democracy is at stake as the population becomes more dispirited in the fight against runaway inflation, commentators and politicians say.
The Brazilian government has launched an anti-inflation program for the third time since the military ended 21 years of rule and returned to barracks in 1985.The first two anti-inflation programs imposed price controls. After each attempt inflation actually got worse and by October monthly inflation hit a record high of 27.25 per cent - more than 700 per cent over the last year.
Brazilians bombarded foreign consulates with visa requests and police figures suggest that more than one million Brazilians have emigrated since President Jose Sarney's civilian government came to power.
The third attempt follows the voluntary "social pact" model already tried in some countries, including Spain and Mexico.
Last Friday representatives from business, trade unions and government emerged from marathon talks to announce a pact fixing the levels for prices and wages this month and next.
The aim is to bring down inflation gradually and, in the eyes of many Brazilians, to safeguard the health of a young democracy that must be shown to be able to manage its affairs at least as well as the military did.
"Two threats hang over Brazilian society: hyperinflation and a coup d'etat," said former finance minister Luiz Carlos Bresser Pereira on the day the pact was announced.
Folha de Sao Paulo newspaper said in an editorial on the pact on Saturday: "In the end, more than the fate of the economy, what is really at stake is a democracy which - at the cost of immense sacrifice - has only just been born."
The new accord has support from a wide range of Brazilians, from the country's powerful television magnate, Roberto Marinho of Globo TV, to trade union leader Luiz Antonio de Medeiros.