I answer below to a dialogue under the same subject that took place in another international list which I am not a subscriber to. I think that you will find some interesting information about the present Brazilian situation.
It is also a good example of a plague that is not specifically Brazilian, but that is growing everywhere: how people with a certain progressive inclination may harbor reactionary thoughts, how a new world that is not born yet is so tied up to the old world that refuses to die. How Gramscian this sounds!
Oh, before reading it, please cease to call the Brazilian currency as __rial__ for its name is __real__. Calling it "rial" makes me feel like a Saudi potentate, since rial is the Saudi currency. It is not a coincidence of names: it is the same name spelled in two different ways. Remember that __real__ is an ancient coin of the Iberian peninsula and that the Cordoba Caliphate was the center of the Islamic world between the VIII and XI th centuries.
What is the biggest problem of Brazil today? The coming impeachment or resignation of FHC (president Fernando Henrique Cardoso) **************************************************************************** ********** Paulo César de CAMARGO is a Brazilian that read the first part of my message whose subject is "Desastre brasileiro // Brazilian disaster" without the accompanying article by Chossudovsky (parts 2nd and 3rd). Eric Fawcett is a Canadian subscriber to that list.
Chossudovsky's excellent piece is among the top 3 articles about the Brazilian crisis that I have ever read in the latest 14 months. He shows that he knows Brazil better than Brazilian economists and politicians whose heads lie at 700, 19th Street, Washington (the headquarters of IMF) and who are organically linked to the dominant classes and very specially to the financial system. . CAMARGO. I found the text below a bit naive and I do not believe FHC team is the kind of people that are considering to go to Miami if things go wrong. Probably the biggest problem in Brazil nowadays is the lack of political tradition.
FAWCETT. I agree that the lack of a political tradition in Brazil makes the situation far worse, but in countries with a long tradition things aren't so good. In particular, the USA itself is almost ungovernable, let alone competent to act responsaibly as the world's sole superpower.
MAGELLAN. One may see ahead that Camargo has distorted what I wrote. The text was wrote in a hurry in two foreign languages and the most part is composed by citations of Chossudovsky. Is Camargo referring to Chossudovsky being naive?
Is "the biggest problem in Brazil nowadays the lack of political tradition"? Oh, what a naive fool I really am ! Just a second ago I thought that the biggest problems of Brazil nowadays --- and growing ones---- are hunger, disease, homelessness, and mass unemployment. Aren't them anymore, Camargo?
What do you, Camargo, mean as "political tradition"? Every people on Earth has its own political tradition for the simple reason that men necessarily live in society. Brazil, as you know quite well, is a giantic continent-country of 160 million people with a very rich political and cultural history that comprises at least 4 different countries within herself, each of them with their own history, tradition and cultural frames.
Each one of these inner "countries" moves this piebald mastodont called Brazil at different paces.
Things are changing swiftly and the social movements (either spontaneous or organized ones) are now surpassing organized institutions and parties, including the vacillant PT (Workers Party). Pay attention, for instance, to the growing movement of solidarity towards the fight of the 7,000 autoworkers (minimum number) that were already fired by GM, Ford and Volkswagen or are menaced to be fired.
Is the FHC team not the kind of people that are considering to go to Miami if things go wrong? Well, the first neoliberal emperor, dom Fernando I (Fernando Collor), who was outsted by the Parliament on corruption charges, now lives in a golden exile in Miami. I concede that the main rascal of today is a very sophisticated guy and will rather prefer Paris to the nouvelle-riche Miami.
Pedro Malan (the present Finance Minister) and Gustavo Franco (the former president of the Central Bank) will become well paid employees of IMF or of the banks (they already are by their deeds!), as it is very common in Brazil. Remember, Camargo, that even right wing politicians often refer to the scandalous permanent promiscuity ("promiscuidade permanente", as they derisorily say) between the high federal financial officers and the banking system. I would like very much that dom Fernando II and all the rest of them go to hell, and I hope that it be Camargo's wish too.
Don't bet your devaluated money on FHC political survival, Camargo! The dominant classes have already realized that a very heavy social turmoil lies ahead and they need "to make the revolution before the people does it", in the best Brazilian tradition... Cardoso is soon to play the role of scapegoat, as Collor did some years ago. They already are beginning to promote the impeachment of Cardoso on charges of mismanagement and political irresponsability (and perhaps on corruption charges, related to the Telebrás/Telefónica de España affair and to the mysterious Cayman funds).
Take the following examples. Last Friday, the editorial of the conservative and monarchist newspaper "Jornal do Brasil" was short of saying "Cardoso, step down!" The mild reactionary newspaper "Folha de São Paulo" is now turning its batteries against Cardoso. The president of the Rio de Janeiro Stock Exchange declared that if Cardoso insists in remaining loyal to the IMF policies (what he will certainly do) he should go away.
To the Brazilian people is of no interest to overplace Cardoso with vice-president Marco Maciel. Maciel is a very reactionary politician that served quite well to the military dictatorship of 1964/1985 and he is linked to the archreactionary great landlords of the impoverished Brazilian Northern-East. The whole gang of bankers and latifundists must go and a popular government endowed with dictatorial powers, as in 1889 and 1930, must take the necessary steps to reverse the worst features of the neoliberal chaos. A popular dictatorship, however a transient one, is needed.
Alternatives // There already is a general moratorium in Brazil ************************************************************************** CAMARGO. I understand that global economy is not run for the well being of people in general, as it is very clearly exposed by Marilyn Waring in her video Who's Counting , but it is also clear that the options to oppose neoliberalism are not presented with clear basis. It is not enough to say moratorium is the solution
FAWCETT. You are of course right to say there is no clear solution to the chaos of the "new world order". The best hope is that MANY people are questioning it.
MAGELLAN. Oh, it is damn good to know that globalism (the present stage of capitalism, better saying) "is not run for the well being of people in general". But... in general? Camargo, would this mean that there are exceptions which sometimes make the global economy DOES RUN "for the well being of people"? Who runs it in such philantropic occasions and how it is so managed?
I never said that "moratorium is the solution". Camargo is putting words in my mouth What I clearly said in two languages was:
We must clearly say to the people that the coming situation, even with a government of the present opposition, will be very difficult. The general default on debts (moratorium) must be decreed, both internal and external, as well as the mandatory reduction of debts and the confiscation of the financial system. A harsh repression against economic and social saboteurs and speculators must be launched. . . The accumulation of public wealth in the hands of the financial speculators, both Brazilian and foreign, has backlashed on the economy causing assets and people standing idle and increasing business closures, layoffs and corporate bankruptcies. As it necessarily happens in such situations, there is an accompanying collapse in the standard of living that feedbacks the vicious circle of permanent crisis.
For instance, flats and houses are left by their former tenants who are forced to live in slums for having no money to pay rents. Slums in the city of Rio de Janeiro increased about 50 times ---I said fifty, not five--- between 1992 and 1997 (good years, according to the neoliberal standards!). In this city alone more than 800 thousand dwellings, pieces of land and business premises (that is to say the most part of the city) are subject to mandatory public auction for paying the real estate tax on arrears ---but even so they will hardly find buyers!
Quite ironically, financial institutions are being backfired by their own behavior. Bankers think that interest grows in trees... A __de facto__
moratorium is already a reality in Brazil, but Camargo seems to ignore it.
Let's see:
a) the level of nonperforming loans to companies (including big ones) and to individuals is by far the highest in our history and keeps growing; b) the bad debts allowances also are the highest, according to auditors; c) a growing number of employers are paying only part of salaries or are illegally reducing them and are delaying the payment of taxes; d) other companies are illegally paying salaries with their own goods, so turning workers into sellers; e) several State governors are saying that from March on they will not be able to pay the wages of civil servants, even in those cases that wages are already in arrears; f) in many places public hospitals are without fuel for their ambulances, police cars are kept permanently parked, children are without schools, etc., because States and Municipalities must give priority to the payment of interest; g) the courts are overflooded with judicial suits against usury and anatocism and now against payments with dollar-indexation clauses.
It is a Russian-like situation ! A formal and generalized moratorium decree, both on internal and external debts, will solely recognize a situation that has already became a snowball and will legally give everybody a pause to breathe. It will be the only means to put the economy back to work in a higher level. Moratorium already is an economic necessity. Of course, the Shylocks, both Brazilian and foreign, must pay for the crisis. That is the minimum that a decent government would do, but this is not the case of Cardoso and of the financial gangsters around him.
The options to oppose neoliberalism are quite clear: they lie in opposing the social formation that has liberalism embodied in its working logic, what means to oppose capitalism, be it private capitalism or state capitalism. There is no clear __path__ to sort out from the chaos of the New World Disorder, but the solution is clear: ENTWEDER SOZIALISMUS, ODER BARBAREI !
The privatization scam // Revolution // Cardoso's dictatorial backwardness ********************************************** CAMARGO. The wild privatization is one of the aspects where one can clearly see the contradictions. At one side are the people against privatization for reasons that goes from private interest to philosophycal conviction, at the other side are also people with the same kind of reasons, together with neoliberalism. The final result being Bad Privatization because no one really care about the format of privatization. The essencially question being to gain or to loose politically. We do not need to go backwards with a revolution which needs strong government, we ought to improve our political culture and in this sense the oposition has the most relevant contribution to give, showing how privatization has to be done, what conditions must be imposed.
MAGELLAN. Why a revolution would make Brazil goes backward, dear Camargo? Are revolutions backward movements or they are rather movements against backwardness? Liberté, égalité, fraternité ! The Brazilian people is awakening and they themselves will decide in the streets, as they are already deciding in a revolutionary way in the countryside, with MST (the Landless Movement). Revolutions, either peaceful or violent ones, are the best way to improve the political culture and the life of whichever people. Better saying: they are THE improvement itself.
Brazil is going backwards pretty well under the neoliberal governments, beginning with Collor and now under Cardoso. Camargo, forget everything else and think, for instance, about a sole thing: epidemic diseases that had been throughout eliminated around the year 1900 by the great sanitarian doctor Osvaldo Cruz ---malaria, yellow fever and cholera morbus--- are back in full glamour 100 years later and with new sisters (dengue and AIDS), and as a special gift, a mass upsurge of that old disease of the romantic poets, tuberculosis (today meaning, as in Russia, malnutrition and not poetry).
Camargo forgets that the Cardoso government has been up to now a strong government, practically in the dictatorial sense. He has ruling since 1994 under decree-laws, which are often being used in an unconstitutional way (what is also happening in Argentina). He has been successful into making the 1988 Constitution, that was the most progressive bourgeois constitution in the world, in a mockery of dozens of casuistic amendments dictated by the financial capital, and at least one of them through bribery. Cardoso has transformed the ordinary Federal Congress (parliament) into an incredible permanent constitutional assembly, what is in itself completely unconstitutional ! We already live under the neoliberal dictatorship, Camargo! It is a common saying in Brazil, do you forget?
Even the freedom of speech is denied, since the press (both the common and the specialized press), the book industry, radio and TV lie in the hands of some great private monopolies. Among them the nefarious Globo group, one of the world's largest and surely the most shameful manipulator of them all. These Big Brother monopolies have been able in keeping the people ill informed on purpose, as Camargo himself is an example.
Camargo, I don't believe that you write that the "opposition has the most relevant contribution to give, showing how privatization has to be done, what conditions must be imposed". Hell, why the mission of the left-wing parties would be to help the bourgeoisie, both Brazilian and foreign? Why our mission should be to enrich the plunderers of the Brazilian people by supporting the criminal process of privatization, that is throwing away at vile prices more than 50 years of building an industrial economy, that is reducing us to a new colonial status and that is eliminating the chances of social advancement of the workers?
You can't put as equals those who favour privatization of the state functions (even police and schools !!) and of state-owned enterprises with those who oppose it. Yours is not a political judgement. You are completely ill informed when you say "no one really care about the format of privatization". The PT (Workers Party) proposal ---ironically, with the silent support of the Armed Forces-- opposed the privatization of the strategic sectors, as electricity, oil and communication. Since privatization seemed to be politically invincible, there was another proposal written by Tarso Genro and other PT leaders together with experts: to turn the state-owned companies (many of them were partially state-owned) into really public companies, under the direct control of organized workers and representative institutions.
Privatization in the whole world has probably been the most massive transfer of state and public wealth in short term to the purses of big capitalists at bargain prices. It began in the days of Thatcher, the Milk Snatcher, as the children of the British working class referred to her. In certain cases, as in the enormous privatization processes of Russia and Brazil, privatization was rather a scam.
The sale of the Telebrás group in the mid-98 (a mixed-owned corporation) was an example. It was said to be the largest single privatization ever in the world. Its selling price fell suddenly, without intelligible explanation, to about 1/3 of the initial target price. The federal ministers practiced actively and shamelessly the sponsorship of the opposing bidders. The great winner, Telefónica de España, will be financed with Brazilian federal resources at low interest rates ---- a true colonial dealing! The price of the sale disappeared in less than a week during the first great flight of speculative capital, in September, 1998. Now, Telefónica paid the second instalment __after__ the devaluation of the real, what in practice meant a 40% discount. Jurists said that the federal government could revert the unexpected loss in the courts based on the __rebus sic stantibus__ doctrine of keping the equilibrium among the contracting parties, but the Cardoso government is too much colonially-minded to act accordingly.
One must keep in mind that the privatization is just a feature of the colonial dominantion of the world by the big corporations. Gustavo Franco, the former arrogant president of the Brazilian Central Bank, dared to say in an interview that the Real Plan has made great private Brazilian corporations too cheap and so they should be bought by foreign investors (well, the Plan led many of them to become technically broken). So, privatization also means the expropriation of the local entrepeneurs. Let's finish with Chossudovsky lessons on this issue:
"The programmed bankruptcy" of domestic producers has been instrumented through the credit squeeze (ie. extremely high interest rates), not to mention the threat by Finance Minister Pedro Malan to allow for trade liberalisation and (import) commodity dumping with a view to "freezing price increases" and obliging domestic enterprises "to be more competitive" Combined with interest rates above 50 percent, the consequence of this policy for many domestic producers is tantamount to bankruptcy, -- ie. pushing domestic prices below costs..."
"This ruthless demise of local industry --engineered by macro- economic reform-- has also created an "enabling environment" which empowers foreign capital to take over the internal market, reinforce its stranglehold over domestic banking and enable it to pick up the most profitable productive assets at bargain prices..."
"In other words, the financial crisis (evolving from the inception of the Real Plan in 1994) has created conditions which favour the rapid recolonisation of the Brazilian economy. The depreciation of the Real will speed up the privatisation programme as well as depress the book value (in Reales) of State assets. The IMF's "up- front fiscal adjustment" --combined with mounting debt and continued capital flight-- spells economic disaster, fragmentation of the federal fiscal structure and social dislocation."
The present Brazilian situation ---a crisis within a permanent crisis that comes back to 1978--- is one more step in the general crisis of the last stage of world capitalism, under which the financial capital assumes full control over the economic system. Its main feature is the so called "social exclusion": the end of the labor system based upon wages (salaries) and the widespread, growing and irreversible mass unemployment all over the world (I prefer to use __unoccupation__ or __disocuppation__ , both of them horrendous English neologisms of mine that avoid the juridical narrowness of the word "unemployment")
In solidarity, Roberto Magellan
Paix entre nous, guerre aux tyrans (....) Ouvriers, paysans, nous sommes Le grand PARTI DES TRAVAILLEURS. (L' Internationale)