Brazil freezes its future

Source:  Granma
December 19 2016

by: Laura Bécquer Paseiro |

Progressive forces and social movements, like Clara in Aqua­rius, have entered a new stage in which the only option is resistance to injustice.

brazilians protest dec 2016.jpg
Protests have erupted across Brazil in opposition to the proposed Constitutional amendment. Photo: Reuters

Brazil hits rock bottom

In the film Aquarius by Kleber Mendoca, Clara represents resistance to the imposition of injustice, in an unfavorable environment. Even though the movie isn’t an explicit condemnation of the current political situation in Brazil, the character played by Sonia Braga captures the reality of a country that has hit rock bottom and has not found a way to escape the crisis it is experiencing.

Restricting public spending for the next 20 years

The panorama has continued to worsen since the shady impeachment of Workers Party President Dilma Rousseff. After assuming the position of Interim President, Michel Temer from the Brazilian Democratic Movement Party, promised to “tighten belts” in the country of some 200 million inhabitants, under the pretext of “getting the economy on track.” One of the measures he began pushing as soon as he reached the Planalto executive headquarters was a proposed Constitutional amendment (PEC), which was approved December 13, by the Senate.

The most questioned issue within the amendment is a fiscal reform that restricts public spending for the next 20 years, beginning this coming year. This reform would be the most far-reaching in decades and was defended tooth and nail by Temer, as the only way to overcome the deep economic crisis – with stagnation, a falling GDP, and no growth – in a country once considered an example for the world.

A dangerous regression of social gains

On one hand, the administration is promising to generate employment and attract investment to reactivate the spent economy, while on the other, limits were established on the amount the state can invest in health and education, which means a dangerous regression in terms of social gains for the disadvantaged.

These expenditures to social programs in sensitive areas are considered a burden by the Temer administration.

Real minimum wage cannot be changed for the next 20 years

“The 2017 state budget will be the same as that of 2016 plus adjustments for inflation. In this context, the minimum wage cannot be changed for the next 20 years, maintaining its current level of 880 reales (275 dollars) monthly. Until now, this wage was calculated by adding the inflation rate and the real GDP growth rate, annually, but with the approval of the reform, this salary cannot be increased more than the inflation rate, “under any concept whatsoever,” according to the specialized website Brasil de Fato.

Another detail is that the amendment, at this time, only affects the federal government, although such a reform at the state level has not been ruled out.

Changes in education

Temer has warned that if the spending ceiling is not respected, public resources and the hiring of staff could be denied, among other provisions. His plans also include changes in education, with subjects like Sociology, Physical Education, and Arts being made optional, not obligatory.

Laura Carvalho, who holds a PhD in Economics from the New School for Social Research in New York, emphasizes that improving efficiency requires effort and ability, which is not outlined in the law that simply limits spending.

The amendment – an inflexible burden

“No country has implemented a rule like this, much less for 20 years. Some nations have adopted measures to stimulate growth, but generally they are effective for only a few years, taking into account an increase in the GDP and other economic indicators. Moreover, no country has a rule about spending in its Constitution,” she wrote in her article on the amendment, published on the Brasil de Fato site.

Carvalho warns that, in the long term, the GDP will again grow, making the amendment an inflexible burden, absolutely unnecessary to the economy.

Another element she identifies is that, according to a study by the International Monetary Fund (IMF) in 2012, countries with the most rigid fiscal regulations tend to suffer as a result of the government’s financial maneuvers, which lead to off-budget expenditures and corruption.

“The country already has auditing, supervision, and planning mechanisms, in addition to annual budget goals. It’s not enough to make a law on the issue, it is imperative that there be a desire on the part of governments to strengthen those based on the transparency of fiscal policies,” Carvalho insisted.

Protests across the entire country

For now, voices speaking up against the draconian measure can be heard across the entire country. Protests have taken place in Alagoas, Bahía, Ceará, Espíritu Santo, Mato Grosso, Minas Gerais, Pará, Per­nam­buco, Río Grande do Sul, Roraima and Sergipe. Also making headlines is repression by the interim Temer government against its own citizens.

The only place in the world where the direction being taken has been applauded is in Washington, at IMF headquarters, with its director Christine Lagarde, saying she was encouraged by the focus of the reforms.

Progressive forces and social movements, like Clara in Aqua­rius, have entered a new stage in which the only option is resistance to injustice.

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