As the effects of the recession work their way through, more and more sackings will take place, and at this point the great majority of the population, including a whole series of marginal sectors, will feel the weight of the Collor plan. * part of the new measures. From now on, The Workers Party's conversion sales of new cruzados into cruzeiros will play a central role in the economy. Banks will play the part of intermediaries between different clients developing perhaps a whole new parallel "cruzeiro market" for these transactions.
Another point is worth serious attention: the banks are obliged to buy the privatization shares. On what conditions? To what extent? To acquire which enterprises? At what price? In reality the capital in the national financial system is the most ready to take part in the privatization process. This explains the stimulus given to the acquisition of these much coveted enterprises. According to the General Secretary of the Ministry of the Infrastructure (Industry), Paolo Ximenes, the privatization of the steel industry will start with the most profitable outfits: Usiminas and Tubarao. With the resources obtained from the sales, other enterprises will be prepared for privatization. (Jornal do Brasil, March 18, 1990).
Limitations on withdrawals from banks
The losses suffered by wage-owners, small owners, bosses, and middle layers are already significant. Collor has firmly limited withdrawals from current and sayings accounts. This may be some sort of ploy for negotiations with Congress. But what is clear is the great gentleness with which big capital is being treated and the violence of the attacks on the intermediate
The recession imposed by the pact is also a direct consequence of the timidity used in the confiscations directed against those who have been benefiting from the inflation. The recession, leading to loss of jobs and falls in wages, will mean draconian losses for the 90% of the population who Collor claims will benefit.
At the moment the population is assessing the plan from the point of view of the whether it has a real impact on inflation. The Collor plan differs from previous plans given the fact that it may have a real success in the fight against inflation. This is why it is necessary to keep a close watch on who wins and who loses from the package, while at the same time seri24 ously defining defensive strategies and • popular struggle. We have to understand International Viewpoint #184 • May 7, 1990 proposals
IN RESPONSE to the Collor plan, the National Executive Committee of the Workers Party has decided to present a series of alternative measures to stem the crisis gripping the country, while preserving working class living standards. We publish below extensive extracts from the document. DOCUMENT
NDIFFERENT to the worsening of the crisis and the acceleration of inflation during the last days of the Sarney government, president Collor is now proposing laws, decrees and measures that are in contravention of established laws in order to achieve an economic readjust-
With this plan, the Collor government is trying to make us believe that everyone is making the same sacrifices to get the country out of its disastrous economic situation, when in fact the plan will strike and marginalize the most disadvantaged, by putting the economy at risk of an imminent recession, with the well-known consequences: unemployment, poverty, disorganization of production and a social crisis....
The main lines of the plan preserve the agro-exporter model and submit the economy to the diktats of the International Monetary Fund (IMF), by continuing the payment of the external debt. This risks making any attempt to stabilize the economy or to successfully control inflation worthless.
The PT reminds the population of the promises made by Collor concerning wages: discussion of the subject with the participation of the workers and no change in the minimum wage.
But, once more, the government's economic measures harm the workers: one month's inflation is not taken into account, wages have been fixed in advance without any guarantee that the difference between predicted and actual inflation will be paid. The minimum wage has in fact been revised - downwards. Instead of a real rise of 3% per month, the government proposes a quarterly rise of 5%. This is the same sort of thing as in the previous plans.
Unemployment and wages
The menace of unemployment is as serious as the wage agreement. There is no guarantee of stable employment, nor of warning of being laid off, no extension of the right to unemployment relief and a minimum income such as were promised by the government before it came into office.
In this situation, created by the measures, the PT proposes:
1. Stable employment lasting 180 days.
2. State financing for a programme of unemployment relief accessible to the largest number.
3. Participation by the trade union confederations in any modification in wage policy and the taking into account of the differences between predicted and real inflation in the monthly wage; and, from today, the taking into account of March inflation in the computation of wages.
4. The maintenance of the existing policy on a minimum wage fixed by Congress.
### Prices
The price freeze - retroactive to March 12 — is a farce given that enterprises had already modified the prices of their goods beyond the limits established by the plan in order to guard against any losses caused by government measures...
The PT proposes the following alternative measures:
1. access of trade union representatives to the enterprise account books;
2. labelling of manufactured goods at source with the permitted maximum price;
3. Participation by the unions in the price fixing bodies, by sector of production.
### Monetary reform
The violence of the readjustment imposed on the financial markets threatens the coun try with a prolonged recession, encourages the concentration and denationalization of the economy which will have irreversible effects on the industrial base and
The plan makes no distinction between the inheritance of rich and poor families; it does not take into account particular cases of people who do not have the financial means to live; it makes no distinction between big and small enterprises, or between essential sectors and those that are not essential, or between different types of economic activity....
It favours big capital, those sectors who do not need much liquidity, economic groups that organize capital flight and the most solid financial sectors. With the Collor plan it is the powerful who will win, at the detriment of the poorest and weakest sectors. The Collor plan treats international capital in an unacceptable fashion....
The PT proposes the following alternative measures:
1. The establishment of selective criteria for the liberation of blocked funds, according to the following guidelines:
a. For those for whom financial savings are the only source of revenues, the authorization of monthly withdrawals up to the limit of the monthly average for the previous Twelve months, and not amounting to more than 15 times the minimum wage.
b. Funds must be released for the purchase of housing according to the rules of the housing finance system for those who have no c. Funds must be released for spending on health, education with legal verification.
d. Funds must be released for unemployment relief. After March 15 this relief should be 80% of their last wage.
The release of funds must be subject to the a. The taking into account of what is really essential in the economic sector: meeting basic consumption needs, technology and agriculture. b. Payments due to small and medium sized enterprises.
c. The need for capital to circulate: the basis for release of funds must take into account taxes paid the previous year, subtracting the liquidity already released.
Pd. To go through with investments already committed, and establish criteria for strategic investments, in relation to industrial, social and agricultural policy.
2. The conversion into cruzeiros of the external resources of multinationals must also be subject to these restrictive and selective criteria, compatible with the interests of the country and national development.
### Fiscal reform
The fiscal reform has increased taxes and imposed new ones on financial actors, big fortunes and agricultural rent; it also eliminates stockholders and fixes future rents. But, not touching other forms of speculative inheritance, in particular non-productive big rural property, it shows its limits and omissions.
The increase of public charges, with the aim of improving the working of the public enterprises, must not be done to the detriment of the purchasing power of the wage-earners nor become a mere instrument for increasing the profitability of the public sector with regard to its privatization. Furthermore, with this measure, it is the central government that centralizes the the increase in fiscal deductions, which is in contravention of the fundamental principles for fiscal reform defined by the constitution....
The PT proposes the following alternative measure: the taxing of speculative building property, particularly non-productive rural goods, through the progressive and effective application of the tax on rural landed property, to release funds which will allow the construction of public housing in the cities and land reform.
### Administrative reform
The administrative reform has been worked out without any discussion on its guiding criteria. The scapegoats will be the public service workers, as if they are the ones responsible for the disorganization of the state apparatus.
The PT is in favour of a reorganization of the state, but believes that it must be done via a wide discussion and by a clear clarification of the criteria that should guide the policy to be adopted with regard to the employees. The PT considers it inadmissible for the employees to be made responsible for the crisis of the state when the Collor plan itself recognizes that the main responsibility for national bankruptcy are interest payments on the internal and external debt.
The PT proposes the following adminis-
1. The passing of a law to define the main lines of the reform of inheritance and state
2. The establishment of selective criteria for all questions relating to the administrative reform and inheritance, in particular taking into account employment.
3. The transformation of measures regarding the giving up of national wealth.
### Privatization
The PT forcefully rejects the vision implied by the government's new talk about privatization. The PT does not accept the idea of giving the executive carte blanche to carry through privatizations and does not accept that these should be presents to foreign capital or the big domestic industrial
BRAZIL owners....
A large discussion is needed in Brazil on the role of the state, on the sectors that should be privatized and those that should remain in state control.
The international creditors have not been in any way affected by these measures. Furthermore, the freeing of exchange — one of the demands of the IMF's adjustment policy — may bring serious problems for the Brazilian economy, such as the "dollarization" of a part of the public debt that would facilitate the transfer of capital abroad.
The PT proposes the following alternative
1. The creation of a fund for economic and social development, made up in part of the federal government's surplus on the coun try's commercial balance, to finance investments in the infrastructure, education, health, housing, transport, food supply, employment and cleaning.
2. The rejection of the creation of a national privatization programme that would make state enterprises disappear; the installation of a law regulating the public sector that would match the industrial policy; an annual vote on a law on privatizations that would define which enterprises and under what criteria privatization would take place.
3. As for the foreign debt, the PT reaffirms that it is opposed to its payment and proposes the suspension of its repayment.
### Land reform
By failing to tax non-productive land, the government's economic reforms favour the interests of the big owners and those who keep land idle....
The PT proposes the following alternative
1. The establishment of a national programme for agrarian reform with public funds and support from the national bank in credits that have been blocked;
2. The putting in place of an agrarian policy that gives priority to the production of foodstuffs and raw materials necessary for the making of things needed by the mass of the population;
....The PT will not allow, in the name of fighting hyper-inflation, the government to take a series of illegal measures, for, tomorrow, and using other pretexts, it will be ready to violate individual and collective rights and public liberties.
The PT does not believe that the fight against inflation can only be conducted via a recession. Without a democratic policy that fights inflation and the economic crisis and which attacks their structural causes, the country will not reach a level of development where the revenues can be distributed
— which must be the aim of any democratic economic policy.
The NEC of the PT calls on its militants and sympathizers along with all popular and democratic forces to mobilize in the Congress and in the social movements to defend 25 these alternative propositions. *
Free enterprise didn't