Continuing the struggle his plan letting in water in the first few months, dragging in its wake the popularity of the new goverment. His first priority is pursuit of the present economic policy. At the beginning of October, the
Finance Minister, Ciro Gomes, attended the 49th annual meeting of the IMF in Madrid and personally
International Viewpoint #261 November 1994 gave to its Director, Michel Camdessus, a "Memorandum on Economic Policy", which sets out a balance-sheet for the first few months of the Real and the government's financial plans for 1995. Its content is clear. In order to control inflation, the Planalto Palace (the Brazilian seat of government) intends to maintain high interest rates, which will lead to the transfer next year of almost US$10 billion dollars from the Treasury to its creditors — those who play in the "financial markets". As in recent years, repayment to the large monopolies will be achieved at the cost of a sharp fall in State
T HE NEW PRESIDENT needs left-wing
support if he is to carry out a programme similar to that of Fernando Collor. Now that the elections are over, Fernando Henrique Cardoso — FHC — will try to ensure that no-one remembers what he has said in the past. Politicians will make speeches, and the conservative press will publish articles on a daily basis, exhorting the left either to join its efforts to those of the government or to exercise "moderate opposition". Through circumstance, FHC needs the left if he is to carry out his programme. The conservatives believe that with more voices, more deputies and perhaps its first state governors - but without its own project for the country — the left will have to rally behind investment in Brazil's infrastructure and in healthcare and social security in particular. This is still not enough for FHC. Ciro Gomes himself admitted at Madrid that the Real will not survive without "structural reforms" - and the first will affect pensions, taxes and financial relations between central government and the states and municipalities. All this will mean costly and complicated constitutional reforms. Dependent FHC and the forces which have
Five years... Five years after the election of Collor, and two years after his impeachment, the Brazilian ruling class still cling to the deposed President's programme. Collor tried to apply it by force, and failed. FHC, around whom has regrouped a conservative coalition the like of which has rarely been seen this century, will try to apply it through consensus. This route is a long one. Its success cannot be guaranteed. Elected thanks to the fleeting stability provided by the Real, the new President will try to avoid, at any cost, 26 brought him to the Presidency are dependent upon there being a large influx of foreign capital, which will permit them to launch an ambitious programme of investment and modernisation. There are also other obstacles. The international financial markets have in fact been characterised for some years by a surplus of capital. However, to benefit, the country must alienate its patrimony (and, in a sense, waive its own sovereignty) and force workers to accept working conditions even worse than today. Outside money will enter in large amounts only provided that it can
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THE FOLLOWING article, abridged, has been taken recent edition of from the most Brasil Agora, no. 65. ANTONIO MARTINS BRAZIL
swallow up the most lucrative nationalised industries. FHC is ready to deliver them to foreign capital. He openly supports "flexibilisation" (which is more advantageous for foreign investors than privatisation) of the State petrol and telecommunications monopolies. He is equally ready to remove from the Constitution those Articles which protect mineral resources, and to privatise the extremely lucrative mining operation in the state of Vale do Rio Doce. However nothing of this kind can be carried out without constitutional reform. The first two attempts to revise the Constitution in 1993-4 (the first led by Collor, the second by a coalition from the ruling class) failed in the face of the consequent mobilisation by unions whose workers were likely to be affected - particularly those representing petrol and telephone workers Multinational Foreign capital could also enter in the form of investment by multinational companies. From the neo-liberal point of view, however, Brazil is light years behind Asia and Europe and even other countries in South America where multinationals already operate. If they are to be attracted then workers' social rights must be swept away, by the removal of rights inscribed in the workers code and in "flexibilising" the way in which work is organised. It is a route which was taken by Spain some years ago, where the most visible result is an unemployment rate of around 25% of the active population. We should remember that the true capitalist industrial revolution always leads to huge waves of redundancies and a massive increase in inequality. Are Brazilian workers ready to accept such "modernity"? The difficulties for the forces which won the elections begin with the differences which exist within the dominant sectors. The right, the centre, the archaic and "modern" sectors of big business united to beat Lula in the second round of the presidential election in 1989 and 1994. They have been incapable, however, of sustaining the "Collorido"
programme, and it is far from certain that they will unite behind
FHC. Will the big employers, which have drawn upon the postwar model of development, cede graciously to those who want to ride the neo-liberal wave? Are parties such as the PDMB (a centre-right party) and the PPR (a right-wing party, to which most politicians belonged during the dictatorship), which have a significant number of deputies, ready to share responsibility for unpopular governmental measures without sharing in the benefits of power? Committed by his own programme to inflicting serious defeats upon workers, and to complex negotiations with sectors of the ruling class, FHC needs the support of the PT and other left-wing parties, while not actually requiring their participation in government. If it proves possible to domesticate them, to push them into being merely a fragile and opposition, and to convince them not to contest
Structural reforms, then it will be possible to give an air of legitimacy to unpopular government plans, and to force the support of the conservative parties which are not in the victorious coalition. *
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International Viewpoint #261 November 1994