October 15, 1998

                  Brazilian Indians protest government spending
                  BRASILIA, Brazil (Reuters) -- Brazilian Indians smeared in black war paint
                  and wielding clubs on Thursday protested a sweeping government austerity
                  plan which has deprived their villages of essential medicine and food.

                  About 150 warriors from the Kaiapo tribe gathered outside the
                  headquarters of the Indian Foundation (FUNAI) in Brasilia, where all
                  spending has been frozen as Brazil grapples with its worst financial crisis in

                  "The government has to understand ... that FUNAI deals with lives, with our
                  people," said Megaron, a Kaiapo chief, after meeting with FUNAI officials.
                  "If Indians start to die, there will be trouble."

                  No funds to combat disease outbreaks

                  FUNAI officials said they had no money to deal with at least 10 outbreaks
                  of tuberculosis, malaria, pneumonia and other diseases affecting Indian
                  groups across Brazil.

                  Three members of the Kaxinauwa tribe died this week amid an outbreak of
                  cholera in the Amazonian state of Acre, newspapers reported Thursday.

                  "Everything is on hold," said FUNAI spokesman Roberto Lustosa. "There's
                  not a cent to be spent."

                  Brazil has announced more than $5 billion in budget cuts, and is preparing
                  further austerity measures to fend off a crisis that threatens to wreck the
                  country's four-year economic recovery.

                  The plan has the blessing of the International Monetary Fund, which is
                  preparing to offer Brazil an emergency credit line, once the government
                  comes up with a full belt-tightening program.

                  The October 4 re-election of President Fernando Henrique Cardoso was
                  widely interpreted as a sign that Brazilians are prepared to swallow austerity
                  measures to keep the economy alive.

                  Not even the country's cash-strapped health and education services are
                  likely to be spared the ax, officials say.

                  But so far, the most painful cuts appear to have fallen on the country's
                  320,000 Indians who depend on FUNAI for health and other essential

                  Indigenous groups to seek emergency aid

                  "We believe that the government cannot put Brazil's 215 Indian nations on
                  the negotiating table at the IMF," said Marcos Terena, a leader of the
                  Terena tribe and a FUNAI employee. "We're talking about people who
                  have nothing to do with the crisis."

                  He said leaders of several indigenous groups were hoping to meet with
                  Finance Minister Pedro Malan who, as "the master of the money," might be
                  persuaded to free up some emergency funds.

                  As part of a first round of austerity measures announced in September,
                  government departments that already had spent 80 percent of the 1998
                  budget were prevented from making any new outlays until October 31. That
                  measure hit FUNAI.

                  Officials say that even when the temporary freeze is over, most of their
                  budget will be eaten up by debts, leaving FUNAI with less than $1 million
                  until the end of the year.

                  "We're in absolute chaos," said Alexandre Ramos Cristino, head of
                  FUNAI's office in western Mato Grosso state, where even telephone lines
                  have been cut to keep down costs.

                  "I've got more than 100 Indians in our clinic, and there's no money for
                  medicine or food. If we don't find some cash, we're going to have to shut
                  down," Cristino said.

                          Copyright 1998 Reuters Limited.