Brazil: renewed onslaught against the poor

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The October 2016 Brazilian municipal elections saw the bloodiest campaign in the country’s democratic history, set in the worst recession in Brazil since the 1930s. At the same time the largest anti-corruption investigation in history has been running, inflaming the fractious impeachment process against former President Dilma Rousseff, which reduced the electoral campaign from 90 to 45 days. At least 20 candidates have been murdered since August. The state of Rio de Janeiro leads the list of places where candidates were shot at, threatened and killed.

These elections, in the 27 states with more 144 million voters in over 5,500 municipalities, confirmed the strength of the reactionary mass media campaign directed by a ruling class in the grip of international capital. The demonisation of the Worker’s Party (PT) by the millionaire mass media has had a profound effect. By the second round of votes, at the end of October, the left was comprehensively defeated, with the PT reaping their worst results in 20 years.

The pivotal point of change was the 2013 protests, which warned the ruling class and its imperialist creditors that the PT years had unleashed demands which could not be met. Brazil, with its size, population and economic weight, is central to US strategy in South America. Harsher measures were needed not to just keep the poor poor, but to increase the rate of exploitation, to increase the extraction of surplus value from the workers, which fuels imperialism. Conciliation had to go. Two years ago, Brazilians elected the most reactionary Congress in the past half-century, which moved against Rousseff. In the October elections the PT presented 47% fewer candidates than in 2012. Of the 635 PT members elected four years ago, 105 had left the party. Nationwide it received the fewest votes since its foundation in the late 1980s, winning only 255 of 638 mayoral elections, a loss of 40% compared to the last, 2012, municipal elections. Overall the four largest parties involved in the impeachment process against Rousseff came out stronger from these latest municipal elections.

In São Paulo, almost 40% of the electorate cast blank votes (a record). The millionaire businessman João Doria (Brazilian Social Democracy Party - PSDB) won with over 40% of the vote in the first round. In Rio de Janeiro, 43% of the voters chose not to vote for a mayor. The rejection of the establishment by the poorest sections mean that in Rio de Janeiro, Crivella, a right wing senator (Brazilian Republican Party - PRB), and Evangelical bishop won. In Salvador, millionaire Mayor Antonio Carlos Magalhães Neto (Democrats Party - DEM) was re-elected with a shocking 74% of the votes cast.

The Temer Coalition

On 31 August 2016 President Rousseff of the PT was removed from office by a senate vote of 61 to 20. Her former coalition vice-president, Michel Temer, of the country's biggest political party, the Brazilian Democratic Party Movement (PMDB), abandoned her in March becoming interim president in May. He is serving the remaining two years of her term but has been named many times in the multibillion-dollar bribery investigation of state-owned Petrobras. Recent polls give him ‘approval’ ratings of less than 20%. The mass of workers want new elections to remove the corrupt governing clique, but Temer will not resign. If he fails to deliver cuts, the right could dump him in 2017, when a new president could be indirectly elected by parliament.

The new coalition is rushing constitutional amendment PEC 55 through parliament, imposing a 20-year cap on public spending, directly opposed to Brazil's post-dictatorship constitution, which set a compulsory minimum investment in health and education, promising to reduce inequalities. Now the next 20 years can expect reduced spending on public health, education and infrastructure, leaving these open to further privatisation. There is no change to Brazil's shamelessly regressive tax system and Rousseff's policy of corporate tax breaks remains in place.

Recession

Capitalism brooks no sentimentality. Rousseff’s good intentions did not prevent 12 million workers being unemployed at the time she was removed, a rise of a third in a year. Her opponents blamed her interventionist policies for the rise in the budget deficit and a rapid increase in gross public debt to nearly 70% of gross domestic product, but it was the collapse of growth in the imperialist states – the financiers of the world - that changed the situation. Investors removed their capital from Brazil, creating the country’s worst recession in more than a century. The economy will shrink more than 7% from 2014 to the end of 2016. With falling growth and high interest rates of 14.25%, higher debt meant higher interest payments and yet higher debt. Two years of recession have depressed tax revenues. Inflation is near 10% and this cuts into the workers’ meagre wages and reduces the real value of state spending.

Temer’s manifesto, a ‘Bridge to the Future’, raises the retirement age, reduces state welfare, privatises the huge oil sector (Petrobras is privatising $15.1bn of its assets in 2016 and $19.5bn more in 2017 and 2018 ), weakens workers’ legal protection and cuts mandatory spending in health and education. However Trump’s 8 November 2016 election victory still hit Brazil’s financial markets. The Real suffered its worst three day loss against the dollar since 2008, depreciating by 7.3%. The US Federal Reserve’s threat to increase US interest rates could draw capital away from Brazil, which is dependent on foreign inflows to provide capital. Brazil remains in the thrall of international finance.

The budget presented on 31 August 2016 aims to reduce the primary deficit to 2% of GDP (from the current 2.5%). Even under the proposed spending freeze, the government could not achieve a primary surplus before 2021. Brazilians want more from public services, not less. A third of Brazilians have dropped private health insurance over the past year; they now rely on public clinics. Some 14% of parents say they have withdrawn children from fee-charging schools.

The austerity policies of Temer’s government have provoked workers and socialist rallies in the big cities, like Rio de Janeiro, where fences protecting the City Assembly were breached on 17 November. However, since 2013, the overwhelming corruption of the system has resulted in the demands from workers’ leaders that move away from the fight for social equality. Instead of demanding the right to work, for homes and medicine, they now chant ‘No parties!’ and denounced political corruption, high taxes and a high rate of crime, indistinguishable from the demands of the right wing. The same day, a group of fascist demonstrators broke into the lower chamber of Congress in Brasilia to demand a return to military rule: 60 were arrested after three hours.

In Brazil a ‘Popular Front’, the Brazilian ‘Front without Fear’, a coalition composed of the Landless Workers’ Movement (MST), the Movement of Homeless Workers (MTST), the Unified Workers’ Central (CUT), the Communist Party of Brazil (PCdoB), the National Union of Students (UNE), and several tiny parties, now demand ‘Direct Elections for president Now!’ Precisely who would be elected is unclear. The Workers’ Cause Party (PCO) calls for a constituent assembly, but a force organising independent action of the masses on a revolutionary programme does not yet exist.

Alvaro Michaels