The programme introduced by acting President Michel Temer consists of extreme neo-liberal measures that the government believes can be imposed by force. But will it work?
The Brazilian Senate recently voted to suspend Dilma Rousseff (of the PT, the Workers’ Party) from the Presidency of the country and to start an impeachment trial against her based on alleged fiscal irregularities. In constitutional terms, the legitimacy of the impeachment process has been questioned so harshly that some claim it is a coup d’état. Despite the systemic involvement of PT in a number of serious corruption scandals over the past decade, Dilma herself does not face any charge of corruption. That is not the case of the vice-president Michel Temer (from PMDB), who immediately after taking over Dilma’s post, appointed eight ministers (from PSDB, DEM, PMDB, PP and PPS) who, just like him, have been named in plea bargains as having taken bribes in the corruption scheme of the state-run oil company Petrobrás, under investigation by the ongoing Lava Jato (Car Wash) operation. Corruption, far from being the monopoly of a specific political party, is the ordinary practice of the most influential public and private sectors in the biggest Latin American nation.
“A bridge to the future”
In late 2014 the coalition PT-PMDB was re-elected for a second 4-year-presidential term (January 2015- December 2018). Although Temer’s PMDB formally broke with Dilma’s PT only two months ago, it had been gradually turning its back on its former ally since August 2015. In late October 2015 PMDB released a document entitled “A bridge to the future”, the party’s programme to overcome the severe political and economic crisis that has been affecting Brazil, especially from 2014 onwards. The content of the ‘plan’ is nothing more than the radicalisation of what Rousseff had already started when she appointed the Chicago-trained economist Joaquim Levy as her Finance Minister in January 2015. In other words, very aggressive austerity measures have been proclaimed by PMDB as “a bridge to the future” and are now being put into practice at the speed of the light.
Within 24 hours the complete absence of women and ethnic diversity among the new 23 ministers had damaged the image of Temer’s administration on a worldwide scale. His first official decision was to abolish four ministries, including the Ministry of Culture and the Ministry of Women, Racial Equality and Human Rights. Temer is likely to work hard to minimize criticism and improve his political image in these regards (without, however, breaking with the extremely conservative and powerful evangelical faction in Congress). What is less likely to change is his approach to austerity measures, which are going to be passed in the blink of an eye. The task to build the “bridge” was handed to the new Minister of Finance, Henrique Meirelles, who was also president of the Brazilian Central Bank during most of the two administrations of former President Lula (also from PT). Meirelles is a well-known banker and clearly represents the interests of the global financial markets.
By making a strategically confusing link with corruption within the PT, right-wing politicians, business associations and media groups have tirelessly exploited the two-year crisis, which has harshly affected the Brazilian population, to gain public support for the impeachment process. Now the discourse must be changed. In his first speech as interim president, Temer quoted a phrase from a billboard he had seen recently, which, he said, he liked very much: “Don’t think about crisis, work!”
The Minister of Finance announced last Tuesday the proposed constitutional changes to remedy the “fiscal” crisis: labour market and pension fund reforms, the creation of legal limits to compulsory public spending (cuts of up to 50%) and de-indexation of social benefits from the minimum wage. It comes as no surprise for those already familiar with PMDB’s documented austerity plan that, in short, it aims: 1) to loosen workers’ rights in the labour market, allowing more space for “free” negotiations between employers and workers (in other words, wage constraint); 2) to reduce the outlay on pensions and to increase the period in which taxes are paid by delaying workers’ retirement age; 3) to worsen public services through budget cuts, especially in education and health spending, as well as in social security; 4) to raise taxes (probably through indirect taxation); 5) to privatise companies (or sign private concessions contracts with them) in core infrastructure and logistics sectors (including Petrobrás and Correios), with the door opened wide to international capital. Last but not least, Temer has signalled his intentions to negotiate free trade agreements with the United States, European Union and Asia, with or without the support of Mercosul and Unasul. No wonder the financial markets are so optimistic.
The end of the crisis?
In his recent essay Crisis in Brazil in the London Review of Books, British historian Perry Anderson provided an accurate description of PMDB: “the largest and most characterless political entity in the country”. Its most prominent members — Eduardo Cunha, Romero Jucá and Renan Calheiros — are well-known corrupt politicians and also the people who started the impeachment process. Now in charge, PMDB will do all it can to accommodate the interests of the Brazilian Congress, especially taking measures to prevent traditional practices of corruption schemes from being investigated and coming to public knowledge. With the help of media oligarchs and part of the judiciary, as well as the support of the financial sector, Temer hoped to build the “bridge to the future” in the very short-term future and to restore “normality” to the country. However, it hasn’t worked out like that: Temer’s two-week interim government is already facing great difficulties and is widely considered to be in a profound crisis. (See video of an anti-Temer demonstration here).
Temer and his nominated white male cabinet have been facing popular protests, which will tend to increase, now that one of the country’s leading newspapers, A Folha de S. Paulo, has published the recording of a phone conversation in which Romero Jucá (Temer’s Minister of Planning and the president of PMDB) clearly refers to Dilma’s impeachment as a political “national pact” to stop the Lava Jato investigations. Such was the outcry that Jucá was forced to resign. Since Temer took power, demonstrators have also taken to the streets throughout the country on a daily basis, demanding that he step down. The promised neoliberal reforms will certainly not help to create a scenario of popular satisfaction with the interim president, who has never enjoyed high rates of popularity. In his first interview as interim president to the most powerful TV channel, Globo, he claimed not to be concerned about his low levels of popularity nor to have any intention of running for president in the 2018 elections. He forgot to mention that in any case he is legally ineligible to run for any elected office for the next eight years, due to violations in campaign financing. Nor was it pointed out that he would not have any chance of winning, especially with the austerity agenda that he is pursuing now.
In this regard, the new Minister of Justice and Citizenship, Alexandre Moraes (PSDB), will work hard to maintain “Order and Progress”, the conservative slogan of Temer’s administration, taken from the Brazilian flag. Moraes is famous mainly for two things: having acted as a defence lawyer for corrupt politicians, such as Eduardo Cunha, and drug criminal organizations, such as Primeiro Comando da Capital (PCC, the country’s largest criminal organisation); and his brutal use of the Military Police to repress social movements while in the post of Secretary of Security of the state of São Paulo (2014-2016). He is playing a key role in the current attempt to convince the Brazilian population, through violence, that Temer is their legitimate president and that the neoliberal reforms are necessary for “the good of the country”.
The dirtiness of Brazilian traditional mainstream politics is nothing new; it is just showing itself in its purest, naked form. The Workers’ Party (PT) has occupied the presidency of the country since 2003, following the election of its charismatic and internationally known leader, Lula. Instead of changing the corrupt power structure, PT became absorbed in it, using it to boost its own power and as a means of bargaining support from other parties and national and international private companies. The internal and external contradictions of PT burst when the economic situation could not deliver at the same time both high profitability for companies and relative gains for the workers, mainly through policies to encourage consumption.
The downturn in commodity and oil prices on the world market strongly hit the export-driven platform of the Brazilian economic growth (2005-2011), which relied heavily on selling raw materials to China. The 2013 mass demonstrations were the first major expression of the failure of the PT’s conciliatory approach, in which it attempted to please both the richest 10% and the poorest 10% of the population, in one of the most unequal countries in the world. During the 2014 election campaign, Dilma strongly criticised her major opponent – Aécio Neves from the PSDB (who is also involved in many corruption scandals) – for proposing the adoption of austerity measures. However, after winning by a very narrow margin, Dilma herself tried her best to deliver neoliberal reforms, but the traditional power oligarchs already had their own fast-track, all-inclusive austerity plan that did not include convincing voters.
The challenges Brazil faces are enormous and are clearly not disconnected from the worldwide political and economic crises. However, if it is accepted that the lack of fulfilment of the basic human needs of a significant part of the population is the country’s most important problem, the greatest challenge is to consolidate organized grassroots movements capable of gathering sufficient political strength to overcome the centuries-old corruption culture and, at the same time, to fight to turn the country’s economic apparatus into the means for satisfying those needs.
To this end, there are numerous short and long-term proposals being discussed within the left, but it seems to me quite clear that it is crucial to challenge the PT and not to back Lula’s presidential campaign for the next elections in 2018. The message that the PT gave to the population after Dilma’s suspension was clear: PMDB is still an ally in the elections for governors and mayors in October of this year. This is clearly not the kind of response that is required if Brazil is ever to resolve its profound crises.
*Janaína de Faria is a lecturer in Political Economy at UFVJM/Brazil and a PhD candidate in International Political Economy at KCL/UK.