BRAZIL AUSTERITY PLAN
'Test case' for IMF blood-letting
By Molly Charboneau
With local elections over, Brazil President Fernando
Henrique Cardoso has wasted no time announcing sweeping
austerity measures. They are aimed at raising $84 billion over
three years-through budget cuts and tax hikes. That would
"qualify" Brazil for more than $30 billion in loans from
imperialist banks and the International Monetary Fund.
Brazil's austerity plan took shape as the Group of Seven
imperialist nations announced plans for a global bailout fund
to head off financial crises. It is seen as the test case for
future G7 policies.
This bailout is designed to rescue the big imperialist
banks. Yet even they are wary.
With a capitalist economic crisis sweeping the globe, they
have to wonder if this blood-letting plan will kill off yet
another source of their golden eggs.
Calling for "national unity," Cardoso detailed what the
Brazilian government will put on the chopping block to pay off
the IMF and a consortium of imperialist banks. The plan
includes a 10-percent cut in health and education funds, an
increase in what public employees have to pay into their
pension funds, a requirement that retired public workers pay
into social security, and cuts in state and local
social-service budgets.
Specifics of the austerity plan may have come as a shock to
Brazilian workers, farmers and oppressed peoples, including the
populous and highly oppressed African-Brazilians.
But officials of the IMF, the World Bank, the U.S.
Export-Import Bank, and other imperialist investors got a sneak
preview. IMF officials met with Cardoso four days before his
speech to review the austerity plan in detail.
The IMF plans to maintain a spy mission in Brazil for up to
three weeks to make sure the plan is progressing.
If cutbacks do not move quickly enough, say imperialist
analysts, the IMF may hold back and "drip-release" parts of the
loan to pressure the Brazilian government to step up the
pace.
"It is essential that Brazil implement its program promptly
and convincingly," said U.S. Treasury Secretary Robert E.
Rubin. Washington will commit $3 billion to $5 billion to the
bailout plan.
According to Reuters, 20 percent of United States exports
are sold in Latin America-the majority in Brazil. In addition,
many U.S.-owned businesses are located in Brazil.
Brazilian elections:
a barometer of opposition
Brazil's state elections didn't turn back this assault. But
they did reflect broad opposition to the austerity measures in
many areas.
In São Paulo-Brazil's industrial powerhouse where
millions of workers have produced a $300 billion economy the
size of Argentina's-Cardoso ally Mario Covas was re-elected. He
had won imperialist favor by restructuring debt, dismissing
100,000 municipal workers and auctioning off state-owned
businesses.
But Itamar Franco, a bourgeois critic of Cardoso, won in
Brazil's mining center of Minas Gerais. Center-left candidate
Anthony Garotinho, who favors restricted cutbacks, was elected
in Rio de Janeiro. And Olivio Dutra of the leftist Workers'
Party, which has opposed the IMF deal, won in Rio Grande do
Sur, an important agricultural state.
Elections can't turn back the capitalist assault on the
workers. But they can be a barometer of the Brazilian masses'
consciousness and outlook. Observers reported turnout was low
and voters seemed subdued.
The government had to deploy troops in four northeastern
provinces to force the elections forward at bayonet point. That
is where the landless farmers' movement led seizures of stores
and food shipments after a recent drought.
The austerity program leaves untouched such pork-barrel
projects as an $800,000 moat being constructed around the
Brazilian Congress to keep protesters out of the building. The
real opposition to Brazil's austerity plan will come in the
streets as clinics are closed, school funds are cut,
unemployment rises, and the workers and poor fight back.
This article is copyright under a Creative
Commons License.
Workers World, 55 W. 17 St., NY, NY 10011
Email: ww@workers.org
Subscribe wwnews-subscribe@workersworld.net
Support independent news http://www.workers.org/orders/donate.php)
HOME
:: U.S. NEWS ::
WORLD NEWS ::
EDITORIALS ::
SUBSCRIBE ::
DONATE
Email
this article
Printable
page