Brazil: drained of its wealth

brazil prison

Brazil’s new coalition government, now shorn of any Workers Party members, has increased the maximum permitted working hours to 12 per day and sharply reduced regulations on temporary worker employment. A widespread attack is underway against the Brazilian working class which is being made to pay for the crisis of a system rooted in the drive for private profit. Meanwhile, Teori Zavascki, the Supreme Court judge running Brazil’s enormous Lava Jato (Car Wash) political corruption probe, was killed as his plane inexplicably crashed into the sea off the Rio de Janeiro state coast, conveniently stalling the investigation.

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Brazil: renewed onslaught against the poor

brazil temer

The October 2016 Brazilian municipal elections saw the bloodiest campaign in the country’s democratic history, set in the worst recession in Brazil since the 1930s. At the same time the largest anti-corruption investigation in history has been running, inflaming the fractious impeachment process against former President Dilma Rousseff, which reduced the electoral campaign from 90 to 45 days. At least 20 candidates have been murdered since August. The state of Rio de Janeiro leads the list of places where candidates were shot at, threatened and killed.

These elections, in the 27 states with more 144 million voters in over 5,500 municipalities, confirmed the strength of the reactionary mass media campaign directed by a ruling class in the grip of international capital. The demonisation of the Worker’s Party (PT) by the millionaire mass media has had a profound effect. By the second round of votes, at the end of October, the left was comprehensively defeated, with the PT reaping their worst results in 20 years.

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Brazil a legal ‘coup d’etat’

Brazil

On 12 May 2016 the Brazilian Senate voted 55-22 to start impeachment proceedings against President Rousseff, halting 13 years of politically fragmented coalitions led by the Workers’ Party (PT). Vice President Michel Temer, of the Brazilian Democratic Movement Party (PMDB) under investigation for allegedly receiving more than $1.5m in illegal campaign contributions, has taken on the interim presidency, even though impeachment proceedings against him were also ordered the same day as those against Rousseff. His first coalition cabinet of 13 May was made up of 23 white males, despite the majority of the population being of African descent.

Polling shows the majority of the country wants Temer impeached. WikiLeaks revealed him to be a US Embassy informant since 2006. Temer’s finance minister is Henrique Meirelles, former chief executive of the Bank of Boston. Ilan Goldfajn, from Brazil’s largest private bank Itaú Unibanco, is the new central bank governor. The new Minister of Agriculture is Senator Blairo Maggi (Party of the Republic), ex-Governor of Matto Grosso State, who received Green Peace’s ‘Golden Chainsaw’ award for deforestation in 2005.

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The Crises in Brazil

The current political battles both within and between the governing Workers' Party coalition and the opposition parties centre on the Petrobras corruption charges (see FRFI Web October 2015). Payments extorted by Petrobras managers in return for awarding private contracts, were passed to the governing parties. Such scandals erupt regularly as the Brazilian ruling classes finance their own positions as imperialism drains Brazil’s resources.

The deepening global economic crisis has exposed both the country’s greater dependence on raw material and agricultural sector exports, and the tightening noose of international finance on its cash flows. Brazil is facing its worst recession since at least the 1930s. Industrial production plunged 12.4% in 2015. The economy shrank nearly 4% and it will contract another 3% in 2016.

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Brazil: recession and corruption

Between April and June 2015, Brazil’s economy fell into recession; GDP contracted 1.9% compared to the previous three months, the country’s worst downturn in 25 years, expected to become the worst since the 1930s. Compelled to find a way out of a deteriorating economic and social environment, the bourgeoisie are using the revelations of one of their own largest corruption scandals to hammer the Workers’ Party coalition government into moving from placating the working class to openly attacking it. Behind this stand the global investors.

To punish the government’s August proposals for a 2016 budget deficit of 0.5% of GDP ($Reals30.5bn or US$8.1bn), Standard and Poor’s aggressively downgraded Brazil’s investment grade rating to ‘junk’ on 15 September. With ‘junk’ ratings, global pension and insurance funds automatically start removing capital from a country. The ratings agency insolently demanded ‘unwavering cabinet support’ for the surplus’s planned by the former investment banker and new Finance Minister Joaquim Levy.

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