Trying to Halt Brazil

Let us hope this display of bullying by the joint blue and white
collar sectors continues. This will show the lengths to which some
people will go to look after themselves, regardless of the
common good. The judges threat to strike is a serious challenge
to democracy and an intolerable abuse of power.
John Fitzpatrick

It has been quite a week. The pension reform proposals
were given a symbolic nod of approval by a Congressional
committee in the face of the juggernaut of vested interests
determined to protect their privileges. The vote was clear-30
to 8-but, at the same time, the governing allies took pains to
weed out most, but not all, the opponents from its own side.

This does not mean the proposals will be approved since
there are many amendments and plenty of disgruntled
representatives just waiting to tear the bill to shreds.
Government leaders are talking of having a first vote on
August 5, so lots of backroom meetings are going on as the
administration tries to cater to the special interests without
gutting the bill.

The reform-minded Congressmen are facing intense pressure,
bordering on intimidation, from the forces which want to
maintain the status quo in an unusual alliance of striking
civil servants and members of the judiciary. The unhappy
so-called civil servants who taunted Congressmen and accused
them of being traitors and worse, met their match when the
military police cleared them out of the House of Representatives.

The decision to bring in the police was criticized in some
quarters as being anti-democratic but, since the demonstrators
were virtually threatening elected representatives, it is hard
to feel much sympathy for them. This rougher element has been
joined by the nation’s judges and prosecutors who are
threatening to go on strike on August 5. Is it just
coincidence that this is the day when the first vote may be held?

Let us hope this display of bullying by the joint blue and
white collar sectors continues because it shows the people the
lengths to which some people will go to look after themselves,
regardless of the common good.

Without excusing the civil servants, their behavior is
less serious than that of the judges and prosecutors whose
threat to strike is a serious challenge to a democratic state
and an intolerable abuse of power. It is the first time in
Brazilian history that such a threat has come from this
quarter. One PT member remarked bitterly that it was a pity
the judges had not gone on strike when the rule of law had
been broken during the military dictatorship years
(1964-1985). The president of the Supreme Court claimed that
back then, judges and prosecutors were not entitled to strike.

Despite this unprecedented militancy by these members of
the judiciary, many people are remarkable blasé about the
whole affair. Since justice does not really exist in Brazil
and the legal system moves so slowly, the effects of any
strike are unlikely to be immediate. In any case, the lawyers
and judges will lose what little respect they have and, unless
they change their approach, will crash lemming-like over the
cliff edge.

The government acted swiftly and broke off negotiations
with them. President Luiz Inácio Lula da Silva, who has kept
an unusually low profile over the last week, chose the
occasion to surface once and wasted no time in castigating
them. Without actually naming the judiciary he said: "90
percent of the public sector gets paid badly and lives badly
when they retire but there is a privileged sector which does
not agree with the pension reform... In a country where there
are 40 million hungry people and the minimum salary is R$ 240
(US$ 85 a month) there are people who think that retiring on
R$ 17,000, R$ 19,000, R$ 20,000 or R$ 30,000 (from roughly US$
6,000 to US$ 10,000) is not enough." There are times when Lula
says the wrong things and times when he says the right things
and this was one of the times when he got it right.

It is too early to say whether this strike will really
come about. The judges have been universally slammed and know
deep down that they have no genuine grievance, despite their
pompous claims to be the sole power which can control the
Executive and legislative branch of government in support of
the common citizen. They have no public or political support,
nor any dynamic leadership.

Since they earn good salaries and the average pension
comes to around R$ 8,000 (US$ 2,700) a month they will start
thinking again when they realize what they have to lose.
Unlike striking car workers or even lower level civil
servants, this kind of person is not used to surviving without
his perks and any prolonged strike is unlikely.

Meanwhile, Lula’s priority is to get enough support for
the proposals to be passed on the first vote. For this reason,
he is trying to create a kind of "political committee" made up
of party leaders to try and reach some kind of agreement. At
the same time, he has to sort out the so-called "Group of 30"
dissidents within the PT and also ensure the backing of the
PMDB (Partido do Movimento Democrático Brasileiro-Brazilian
Democratic Movement Party). Although the PMDB is now
officially an ally of the government it has still not yet been
given a high level ministerial appointment. The other parties,
including the PL (Partido Liberal-Liberal Party) of vice
president José Alencar, will also need some sweeteners.

Lula is also under pressure to back up with facts his
recent statement that in July there would be signs of growth.
With only a few days of the month left at the time of writing,
these signs have still not appeared. However, there was good
news of a sort this week for the government when the Central
Bank’s monetary policy committee, the Copom, cut base interest
rates by 1.5 percent to 24.5 percent.

Despite this fairly large cut the Central Bank came in for
criticism from all quarters. It was accused of being too timid
and acting too late. Let us await the publication of the
official minute of the Copom meeting to see why the committee
reached this decision. Not only was the decision unanimous but
the Copom did not set a bias which would have allowed the
Central Bank President, Henrique Meirelles, to act on his own
to cut rates before the next meeting in a month’s time. Maybe
the Central Bank knows something which the rest of us do not.