Fernando Collor de Mello - Presidency

Presidency

In 1989 Collor defeated Luiz Inácio Lula da Silva in a controversial two-round presidential race and 35 million votes. In December 1989, days prior the presidential elections second round, Abílio dos Santos Diniz was the victim of a sensational political kidnapping. The act is recognized as an act of sabotage of the elections having been executed on elections day and associating the act to the political left wing. As there was a prohibition of any political party of taking the media, television, radio or newspapers, on the days prior to election day, Luiz Inácio Lula da Silva's party had no opportunity to clarify the accusations that the party (PT) was involved in the kidnapping. Collor won in the state of São Paulo against many prominent political figures. The first democratically elected President of Brazil in 29 years, Collor spent the early years of his government allegedly battling inflation, which at times reached rates of 25% per month.

The very day he took office, Collor launched the Plano Collor (Collor Plan), implemented by his finance minister Zélia Cardoso de Mello (not related to Collor). The Plan attempted to reduce the money supply by forcibly converting large portions of consumer bank accounts into non-cashable government bonds, while at the same time increasing the printing of money bills, a contradictory measure to combat hyper-inflation.