Statistics and economic projections do not justify alarmism of the pessimists, but brake euphoria of optimists. On the streets, people react to austerity measures and accusations of corruption
By Wagner de Alcântara Aragão
In political and economic terms, Brazil faces one of the most complex moments of the last decade. But despite the daily bombardment of news and information about corruption scandals and unfavourable projections of economic indicators, it’s an exaggeration to say that the country is in a deep, unfixable crisis. There are also satisfactory results in some sectors of the economy. And if the corruption accusations come to the fore more often these days, it does not mean that the deviations by politicians are larger than before; it indicates that fewer misconducts go unnoticed nowadays and are subject to scrutiny.
However, there is an almost general feeling that, in relation to the recent social and economic achievements, there are imminent threats. The labour market remains warm and incomes remain high, but the Gross Domestic Product (GDP) could retract in 2015, with higher inflation (see indicators in the box).
In addition, there is an on going series of unpopular measures, taken mostly by the federal government but also by state and municipal governments. They are basically increases in taxes that mainly penalise workers with restrictions on welfare benefits, cuts in public services like health and education budgets and tariffs readjustment of urban transport, energy, water and fuel. A set of actions labelled as “fiscal adjustment” that aims to ensure the government’s primary surplus target (economy to pay public debt interests) in 2015, which is 1.2% of GDP – 110 billion reais. In practice, this contributes to feed the climate of dissatisfaction, shortening the path to the crisis.
“The fiscal adjustment only deepens the economic, social and political problems in Brazil. The so-called austerity will fall, as always, on the workers, the middle class and the productive sector, reducing the growth margins,” warns Professor of Economics Luciano Wexell Severo, from the Federal University of Latin American Integration (UNILA). “The supposed austerity only serves to further benefit the financial market, which requires high interest rates and the faithful payment of public debt. The spending cuts hits staff, investments and social infrastructure. Expenditure for debt is untouchable”.
CORRECTION WAY
President Dilma Rousseff (Workers Party), on the rare appearances and public statements since she began her second term, has argued that the so-called fiscal adjustment is essential to put the country back on the path of economic growth. “We are now entering a new phase of confrontation of the international crisis, in which steps are necessary for a new path to grow,” she said earlier this month during delivery of 1,472 houses in Arauguaria, Minas Gerais. “We want to further improve what we have achieved. So we are making corrections and adjustments,” she added.
Mainly due to the increases in electricity bills and gasoline prices, there is widespread discontent with the beginning of Rousseff’s second term. The latest research on the popularity of the president available at the time of writing, made by Datafolha and published in February, showed that 44% of respondents consider the government bad and very bad – almost double that of the month earlier, in December, when the percentage was 24%. The rate of those who consider the Rousseff’s government excellent or good, in turn, dropped from 42% to 23%.
The drop in popularity is not affecting President Dilma Rousseff. The same survey identified dissatisfaction with the São Paulo state governor Geraldo Alckmin (Social Democrats) – the percentage of assessing his administration as poor and very poor also nearly doubled, reaching 24% – and the mayor of São Paulo city, Fernando Haddad (Workers Party) – 44% of poor and very poor.
On February 26, Alckmin experienced at Bandeirantes Palace, the seat of state government and official residence of the governor, a demonstration led by the Homeless Workers Movement (MTST, in Portuguese) against the lack of water that affects the state. Thousands of people participated in the protest (up to 10,000 protesters).
UPRISING IN PARANÁ
The greatest demonstration of popular dissatisfaction in 2015 so far came from Paraná State. On strike, state public servants – mostly teachers and school officials –promoted an uprising against resources cuts for basic and higher education and against a fiscal adjustment package announced by Governor Beto Richa (Social Democrats) to the Legislative. The package included the elimination of the social security fund, extinguishing mechanisms of career progression for educators and drastic reduction in benefits such as transportation.
On 10 February, anticipating that the proposals sent by the governor would be approved by a majority of state legislators, public service workers occupied the plenary of the Legislative Assembly in Curitiba, interrupting the package appreciation session. The protesters remained camped all night and the next day, inside and outside the legislature, forcing the deputies, on 11 February, to resume consideration at a meeting in the House cafeteria. On 12 February, when there would be a final voting session of the governor of projects, thousands of protesters surrounded the Assembly to block the entry of parliamentarians and thus prevent a vote session.
Transported by an armoured minibus from the military police shock battalion and isolated by a police cordon in the soil, the deputies were able to break through the siege of the protesters, and entered the Legislative Assembly through an improvised passage. They went up to the cafeteria to begin the session, but as soon as the meeting was open, outside, indignant and angry, the crowd breached the police cordon (which did not impose the usual resistance), took down fences and fully occupy the Legislative Assembly. Cornered, fearing a tragedy, state deputies managed to convince the governor Beto Richa to withdrawal the package.
The retreat of the governor was not enough to end the demonstrations. The teachers and staff of both schools and state universities kept the strike, demanding the state government to resume the transfer of funds for the maintenance of schools and the cancellation of administrative measures that had been taken by the state since the end of 2014. Educators promoted two other large marches on the central streets of Curitiba, on 25 February (40 thousand to 50 thousand people) and on 4 March (20,000 people).
Dissatisfaction with Beto Richa’s management in Paraná is not only by public servants. Re-elected in October 2014 in the first round, with 56% of the votes, the governor saw his popularity plummet. A survey conducted by Paraná Pesquisa institute released this month shows that 76% of respondents disapprove Paraná’s current government.
ON THE ROADS
Also in Paraná and at least ten other Brazilian states, the last week of February and first of March were marked by protests by truck drivers who blocked dozens of federal and state highways. Among the reasons, two were key: the recent increase in diesel prices and high toll tariffs. The truckers’ strike came to harm the supply industries and supermarkets and the flow of agricultural crops. The federal government invited the leaders to negotiate – the sanction of a law regulating the industry, approved last year by Congress, attended part of the claims. The reduction in fuel prices was discarded.
For the first half of March, two other demonstrations were anticipated. One, scheduled for 13 March, promised to bring together in various cities, unionists, members of social movements and leftist political leaders. The mobilisation had a heavyweight ally, former President Lula. The movement supports Petrobras (worn down by Operation Car Wash) and the fight against corruption, “against the right-wing bias given to the facts”.
This protest came in response to calls made, especially by social networks, for demonstrations on 15 March, asking for the impeachment of President Dilma Rousseff. Since losing the presidential elections in October, sectors of the Brazilian right outlines movements in order to remove Rousseff from power. In the face of unpopular measures made by the president, the advocates of the impeachment bet on popular dissatisfaction to achieve success.
INDICATORS
- Gross Domestic Product (GDP): The International Monetary Fund (IMF) projects an increase of 0.3% of Brazil’s GDP. Internally, the market predicts a downturn of up to 0.5% for the country. Even the finance minister, Joaquim Levy, admitted the possibility of recession. The GDP for 2014 will be announced on 27 March – accumulated from 12 months to last September, growth was 0.7%.
- Labour market and income: National unemployment ended 2014 with an average rate of 6.8%, lower than the 7.1% of 2013 and the 7.4% of 2012. Last year, the formal labour market generated a positive balance of 397 thousand jobs, a 1% increase over 2013. In the same comparison, the average salary rose 7%, reaching 1,181.56 reais per month. The current minimum wage (788 reais per month) has the highest purchasing power since 1965.
- Industry, trade and services: In 2014, the Brazilian industry and production fell 3.2% compared to 2013. But trade saw revenue rise in the same period, 8.5%; in sales volume, growth was 2.2%. The service sector ended 2014 with 6% nominal growth over 2013.
- Inflation: Inflation in 2014 was 6.1% and was within the target limit (6.5%) stipulated by the Central Bank. In the 12 months ending last February, the index was 7.7%, driven mainly by higher fuel, electricity and bus fares for the first two months of 2015.
Sources: IBGE, Ministry of Labour and Central Bank
