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Vol. 80/No. 19 May 16, 2016
Collapse of economic ‘miracle’ at root of Brazil political crisis
BY SETH GALINSKY
The Brazilian economic “miracle” has collapsed and along with it the
myth that Brazil was going to be the next Japan. That’s what lies behind
the political crisis there.
Brazil’s Chamber of Deputies voted 367 to 137 in favor of the
impeachment of President Dilma Rousseff April 17. If the Senate votes to
open proceedings, Rousseff will have to step down for up to 180 days
until her trial is over. A two-thirds majority is needed to remove her
from office.
Rousseff is accused, not of filling her personal bank account, but of
transferring $11 billion from state banks to mask a budget deficit, in
order to fund welfare programs that helped bolster the Workers Party in
the 2014 elections.
Nearly two-thirds of the deputies are themselves facing corruption
charges. Among those under investigation are two leaders of the
impeachment campaign: Vice president Michel Temer and Eduardo Cunha,
speaker of the Chamber. The two belong to the Brazilian Democratic
Movement, which broke its alliance with the Workers Party in March.
Rousseff charges that the moves are a “coup.”
The crisis has little to do with corruption, always a feature of
bourgeois politics in Brazil. It has everything to do with the worldwide
capitalist economic contraction and the exhaustion of the political
perspective of the Workers Party — which has governed since 2003 — that
permanent improvement could be won for working people if “left” parties
took the reins of capitalist governments across Latin America.
In 2010 Brazil’s gross domestic product — the seventh largest in the
world — was growing three times faster than the United States.
Increasing trade with China fueled a boom for Brazil’s exports, which
included oil, soybeans and beef. Chinese demand for construction
materials pushed iron-ore prices from $19 a ton in 2000 to $126 in 2011
and China replaced the U.S. as Brazil’s largest trading partner.
Brazilian officials thought the trade with China — which soared from $2
billion in 2000 to $83 billion in 2013 — gave them increased bargaining
power with U.S. imperialism. The Brazilian government was a key player
in a bloc of Argentina, Venezuela, Paraguay and Uruguay to forge a trade
agreement with the European Union. The Wall Street Journal reports that
Brazil’s foreign minister prominently displayed a map of the world
upside down in his office to show that “the era of emerging markets was
at hand.”
Rousseff and the Workers Party took advantage of the good times to
expand social programs begun by her predecessor, Luiz Inácio Lula da
Silva. This includes Bolsa Familia, a program that gives cash to
low-income families on condition they prove their children attend school
and get regular vaccinations. As part of its goal of expanding the
middle class, the Workers Party-led government also handed out loans for
buying homes, at the same time that it made repossession for nonpayment
easier.
Prosperity harsh for workers
Even in the midst of the commodity boom, conditions were harsh for the
working class. Many earn less than the official minimum wage of about
$300 a month and more than 11 million live in favelas that often lack
basic services. And despite high prices for oil and foreign currency
reserves of $370 billion, little was done to build needed
infrastructure. China has 32 times as many miles of paved roads per
square mile as Brazil.
In 2013 more than a million people took to the streets across the
country to oppose fare hikes on public transportation.
Many were incensed that $14 billion was being spent on the 2014 World
Cup soccer games, while health care and infrastructure deteriorated.
Protesters carried signs that said, “If my child gets sick, I can’t take
him to a stadium” and chanted, “Lower the fare, charge it to FIFA’s
account” referring to world soccer’s governing body.
Trade with China plummets
A year later the bottom dropped out of the capitalist commodity market
and trade with China plummeted, as did the price of oil. Containerized
exports from China to Brazil fell 60 percent in January compared to a
year before.
Like other semicolonial nations battered by the trade and production
crisis, Brazil’s economy shrank. Gross domestic product declined 3.8
percent in 2015.
The moves to impeach Rousseff have sparked heated debates across Brazil.
But according to the New York Times, “much of the fury is confined to
older, middle-class professionals” on both sides. Working people, who
had been the most enthusiastic supporters of the Workers Party, have
mostly stayed away from both the pro- and anti-impeachment protests.
“We had such high hopes for Dilma, but her government turned out be just
like the others — corrupt as criminals,” Valdenor Soares da Silva, an
ice cream vendor, told the Times in Brasília.
At least 135 mayors elected on the Workers Party ticket have defected to
other parties in the last several weeks.
The Summer Olympics that will soon take place in Brazil, at first a
symbol of Brazilian capital’s rising influence, is becoming a sign of
its decline. On April 21, an elevated bike path built for the Olympics
collapsed in Rio de Janeiro, killing two.
“It’s really a lot of money that could have been invested in health care
or schools, rather than spent on some big project that falls down after
four months,” restaurant worker Edino Feitosa da Silva, told the Journal.
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