Brazil to change constitution to enshrine neoliberal policies until 2037

Brazilian president Michel Temer's government is set to pass a constitutional change that will ensure that neoliberal policies will endure until 2037. The bill will limit spending on health, education social welfare, and public services for two decades.

PEC 241 as the bill is called, has been approved by the lower house by a vote of 23 to 7 in favor. It now goes to the Senate. A sixty percent approval is required on each vote to amend the constitution. The bill's defenders claim that the measure will ensure that Brazil's large debt will be controlled. However a 2014 poll by the National Industry Confederation shows that the main concerns of Brazilians are public order, health, public safety and education in that order.

PEC 241 will significantly reduce health and education programs. Cuts will be made in hospital spending and disease prevention programs. Funding for schools and universities will be reduced, as well as university loans. These austerity programs stand in contrast to those of former president Rousseff and her attempt to focus on aid for Brazil's working class.

A revised version of the bill exempts health and education costs starting in 2018 according to Finance Minister Henrique Meirelles. The proposed index could be changed but only after ten years. After that future administrations could make changes. The exemption of health and education until 2018 probably shows that the government recognizes Brazil at present needs more spending on health and education.

Spending will be linked to the rate of inflation the previous year and will not be linked to revenue growth. The argument is that this will reduce the national debt and "stabilize" the country. It may actually cause social unrest and further depression in the economy.

The Temer government points out that Chile has a public debt of 17 percent of GDP while in 2015 Brazil was 66.2 percent of GDP. The most recent data shows Brazil at 66.2 percent still but United States is 104. The EU area is 93 and Japan is an astronomical 226. Brazil is hardly in a debt crisis situation.

However, the Temer government argues that public spending grew much too quickly under the government of Dilma Rousseff and the Workers Party (PT). The moves increased interest rates and lowered consumer confidence according to critics. The Finance Minister Meirelles and Temer have promoted PEC 241 to business interests including the Brazil Chambers of Commerce as well as foreign investors and wealthy business people, arguing the changes would stabilize the economy, that is in depression, and lead to profitable investments.

There have been demonstrations by students and activists against the bill. Alessandro Molon of an opposition party said: "The government says this will help the war on unemployment, but this is war on the unemployed because their health services will decline and there will be less money for education." The former president Dilma Rousseff said she would fight for the rights of Brazil's most enfranchised after she was impeached on the 31st of August for breaking budgetary laws. While Rousseff was quite popular during earlier periods of her rule, she suffered from scandals including that involving the state oil company Petrobas. No direct evidence has come forth that Rousseff was connected to the scandal but it along with a declining economy created conditions under which the popularity of Rousseff and her government declined drastically. However, the new president Temer is also under investigation on corruption charges.

Telesur notes that within months of taking office "the social policies of Temer's government have proven to resemble the interests of international monetary institutions such as the World Bank and International Monetary Fund than the interests of Brazil's disadvantaged peoples." However, the austerity policies of the Temer government go counter even to many economists who are staunch defenders of capitalism such as Paul Krugman. These economists argue that when there is a depression then the government needs to spend more to stimulate the economy. Brazil will probably experience the same type of negative results that one sees in Greece, worse economic conditions, with reduced services for those negatively affected by the downturn. There could be social unrest as well. Nevertheless, the Brazil stock market, Ibovespa moved up to a two-year high at the prospect of the bill passing.

Dilma Rousseff wins by slim margin in Brazilian presidential runoff

Dilma Rousseff, the leftist former guerrilla, was able to win a second term winning a run-off election over Aecio Neves but only by a narrow margin. With 98 percent of votes counted Rousseff, received 51.45 per cent of the valid votes.

Opinion polls before the results showed Roussef winning by a margin of 4 to 6 per cent. Many Brazilians are unhappy with a recent decline in the economy coupled with rising inflation. Recently inflation has been above the government's target of 6.5 per cent. Added to this is public concern over poor public services and corruption within the government. Many Brazilians were upset by the huge costs of the recent FIFA world cup. ]
The presidential campaign was quite acrimonious with many attack ads on both sides. Rousseff's party represents itself as the party of the less well off and portrays Neves as a playboy with little concern for the poor. Rousseff was far ahead of Neves after the first round winning 41.5 per cent of the vote to only 33.6 per cent for Neves. The prominent environmentalist Marina Silva was third with 21 percent of the vote. In spite of being on the left many of her voters must have voted for Neves.
 One 35-year-old told an Al-Jazeera analyst: "I am from a privilaged class but the poor people who need the government's help most have seen their lives improve a lot. Everyone else in my family voted for Aecio, though." More recent vote results with over 99 percent of votes counted show Rousseff with 51.6 percent of votes and Neves with 48.4 percent of the vote. The vote was peaceful in spite of the negative campaigning. Ideli Salvatti, a top minister in Rousseff's government said that given the closeness of the result the new government would lead a "national conciliation process".
While the economy is not in good shape at present Rousseff's Worker's Party is credited with lifting 40 million Brazilians from poverty since it first came to power in 2003. Even so, Brazil remains a very unequal country. Neves gained support by promising to provide better public services while at the same time promoting a more pro-business agenda. Rousseff managed to convince many that electing Neves would result in a less compassionate and even more unequal Brazil.
Not surprisingly Brazil's financial markets dropped when the polls showed Rousseff would probably win another term. Rousseff had overwhelming support among Brazilians who live in households earning less than $700 a month about 40 per cent of them. A number of government programs have helped this group, including a housing program, government-sponsored vocational training, and an expansion of credit. Liane Lima 62, a secretary in Sao Paulo said: “People without much money have seen their lives improve during recent years.I think we should let Dilma finish what she started.”
 The state-run oil company Petrobas faces serious corruption charges and some of the officials responsible will face prosecution. The economy slipped into recession earlier this year and this will make it difficult to finance social programs. A credit downgrade may be in the works unless Rousseff can cut spending. So far the economic decline has not resulted in high unemployment.
Neves may not survive as leader of the social democratic PSDB party. He has failed to win the last three presidential contests. However, the problem seems to be less that of Neves as a leader than the image of the party as representing Brazil's wealthy minority. Neves promised that he would not scale back the anti-poverty program of Rousseff, but to no avail.
 As often happens, some voters chose what they considered the lesser of two evils. Dingo Bernardo who installs telephone lines in Rio de Janeiro and voted for Dilma Rousseff said: “My life is stable thanks to Dilma’s government,She’s not great, but Aécio would have been worse since he cares less about the rights of working people. I voted for the lesser of two evils.”