Brazil: accelerating exploitation

FRFI 218 December 2010/January 2011

Dilma Rousseff became Brazil’s first female president in the first elections in Brazilian history to be based on full universal suffrage. Following the votes on 3 and 31 October, her Workers’ Party now holds more state governorships than it did under former President Lula (2002-10). His designated successor won 56.05% of votes against 43.95% for Jose Serra (Party of Brazilian Democracy); winning most of the impoverished poor northern and north eastern regions. The central and southern areas voted for Serra.

The Workers’s Party has damped down protests by providing the 11 million very poorest families with the Bolsa Familia – a family allowance of $12 per month or $0.39 per day, per family – tied to attendance by their children in the abysmal state school system. This has created a political balance and social peace which allows foreign investors to buy the country’s resources on a grand scale. The boom in worldwide demand for raw materials over the last six years means more workers are being exploited and Brazil is now the world’s seventh largest capitalist economy, with an official 10% of workers destitute. A loose budgetary policy – Federal State spending is up 18% this year – is aimed at placating a strategic section of the working and small middle class.

Profits are high, the price of land relatively low, wages are low, raw materials are cheap and capital is scarce. High returns attract capital. So an enthusiastic influx of capital from ‘over-ripe’ imperialist states takes place. The inflow of currencies has pushed the Brazilian Real up 39% against the US dollar since the start of 2009. To prevent this influx of currency fuelling speculation, a 6% tax on bond inflows has been imposed, but this has not prevented the worsening of Brazil’s export competitiveness. With the US’s recent second Quantitative Easing programme more dollars have flooded into Brazil. Brazil cannot prevent the continued imposition of usury imperialism on top of the scheme of direct investments.

Despite Brazil being a major exporter of manufactured goods, engineering and technology to South America (dominating trade with Argentina, Uruguay and Paraguay) and Africa, the ratio of raw or basic products exported to its manufactured exports is the highest since 1978.

The destruction of the Amazon forest, as the infrastructure is extended to extract this wealth, is wiping out the remaining indigenous communities, regardless of a facade of legal protection given by Lula.

Continued accumulation of capital puts grandiose ideas into the heads of the national bourgeoisie. It is trying to put an economic distance between itself and the US, disturbing US imperialism, with strong ties to the ALBA nations, and its independent stances towards the Middle East, Iran and elsewhere. In 2009 China replaced the US as Brazil’s largest trading partner. Brazil’s exports to China have rocketed, agricultural products being critical. China’s Sinopec has just taken over 40% of Spanish firm Repsol’s Brazilian oil stake. These changes are eyed jealously by European financiers. The message of congratulations sent to Rousseff from EU president Barroso inevitably advocated the intensification of the 2007 Strategic Partnership between the EU and Brazil. The inter-imperialist struggle for markets of every sort in the ‘developing’ world has not been this intense for 50 years.

Alvaro Michaels


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