Roger ROMAIN
a/conseiller communal
B6180 COURCELLES
sites web : http://www1.brutele.be/users/r.romain
http://www1.brutele.be/users/r.romain/enbref.html
e-mail: [EMAIL PROTECTED]
----- Original Message -----
From: "Jim Monaghan" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Cc: <[EMAIL PROTECTED]>
Sent: Sunday, January 30, 2000 5:42 PM
Subject: [Cuba SI] Brasil
> __________________________________________________
> International Viewpoint * Inprecor * Inprekorr
> PO Box 27410, London SW9 9WQ, Britain
> Fax +33-01 43 79 29 61
> <[EMAIL PROTECTED]>
> URL (1): <www.internationalen.se/sp/ivp.htm>
> URL (2): <come.to/international-viewpoint>
> Free electronic subscription
> __________________________________________________
>
> Brazil
>
> One year of "democratic and popular" government in Rio Grande do
> Sul state
>
> by Adam Novak
>
> [this article should be read in conjunction with the introduction
> by Carlos Henrique Arabe, and the articles on Rio Grande do Sul
> published in the June and July 1999 issues of International
> Viewpoint]
>
> [The author welcomes criticism, comments and questions, to
> <[EMAIL PROTECTED]>
>
>
> This article is 10,000 words long.
>
>
>
> 1 Introduction
>
> Ubiratan de Souza of the Rio Grande do Sul Budget and Finance
> Department is one of the 200 PT activists from the Porto Alegre
> town hall who swept into the Rio Grande do Sul state
> adminisrtation after PT leader Olivo Dutra won the state
> presidential election in late 1998.
>
> De Souza is proud of the first year of "democratic and popular"
> government. "Obviosly, we live in a capitalist state, and that
> puts big limits on what we can do.. But you can make many more
> changes at the state level, compared to our previous municipal
> governments.We can already dispute the redistribution of public
> income. At a national level, much much more would be possible."
>
> "Under the previous state government, public funds were
> distributed to the multinationals. Now, those funds go on health,
> education, small farmers and small business development. That's a
> big change. One of our key successes was introducing the
> participatory budget. We decided to let citzens decide on 100% of
> resources: not just new investments. Because you have to
> understand the whole picture of income and expenditure in order
> to make informed decisions."
>
> But the success of the new Rio Grande do Sul government goes far
> beyond its progressive reforms, or its experiment in direct
> democracy. The whole strategy of the Dutra government has been to
> build popular confrontation with Brazil's economic and political
> elite. Including the conservative parties who still dominate the
> state assembly.
>
>
>
> 2 Inherited problems
>
> Any evaluation of the new admiistration must start with an
> appreciation of the immense problems they face. The PT state
> government cannot immediately create the favourable conditions
> that exist in the state capital, Porto Alegre, where the party
> has been in power for twelve years (see previous issues of
> International Viewpoint). Under the previous state president
> Antonio Britto, Rio Grande do Sul regularly ran a 30% budget
> deficit (R$1.2bn). This disastrous situation was financed by
> privatisation. Tax income was collapsing, through neglect and
> corruption. To make matters worse, Rio Grande do Sul was been
> particularly affected by the regional recession. The collapse of
> trade barriers almost destroyed the local shoe industry, and
> weakened much of the metalworking fishing and agricultural
> sectors
>
> Despite privatisation, and the collapse of real spending on
> public services, the Britto administration spent more and more
> public money every year. This was largely becauseof the growing
> weight of interest payments on the public debt. This increased
> from R$4.4bn in 1994 to R$13.4bn in 1998.
>
> The incoming PT adminitrtaion faced a situation where salary and
> pension obligations consume over 80% of income, and interest
> payments over 15%. The whole spending structure was confined in a
> straightjacket of benefits to companies, exemptions and tax
> breaks. Having ruled out ptivatisation and redundancies, "in the
> first months, the Dutra government was forced to implement a 'war
> economy'," according to an offical report after six months in
> office. "Our government represnets a clear break wth the project
> that was previously underway: the neoliberal dismantling of the
> state apparatus leaving nothing but a 'Minimum State' and a
> bouquet of good business deals for big capital." 1
>
> Increasing income
>
> The Dutra administration has removed some injustices and
> absurdities from the tax system. It has removed many of the
> previous government's regulations which enabled Cable TV and
> breweries to pay lower taxes than food and other producers. As
> well as revising the web of fiscal concessions, the government is
> auditing cases from the previous administration. Reforms are
> leading to a simpler, more universal tax system. Enforcement is
> becoming easier. It is also a much higher priority than under the
> Britto administration. As Ubiratan de Souza notes, "Porto Alegre
> has achieved a massive increase in its income. We will try to do
> the same. We can't take direct control of the means of
> production, but we can use control of the state machinery to
> seize a bigger part of surplus value and distribute it to the
> people."
>
> The government has also tried to stop the downward spiral of tax
> concessions by other Brazilian states, to attract industry.
> Procurator General Paulo Torelly and Vice Governor Miguel Rosseto
> have made repeated trips to Brasilia to challenge these tax cuts,
> and try to reach concensus on federal regulations for tax
> concessions.
>
> Each increase in taxation is a potential struggle with the
> economic elite and central state. In November 1999, the Porto
> Alegre administration was forced to reintroduce a standard tax
> rate for residential buildings, after the Federal Supreme Court
> declared illegal the progressive system introduced by the first
> PT city government under Olivio Dutura.(0.95% for residential
> property, 1.18% for comercial property). Guilherme Barbosa,
> leader of the PT group in the city council, admits that this
> contradicts the progressive policy introduced in 1989, but
> expects total income will be the same, because successive
> administrations have been able to increase the collection rate of
> this tax to very high levels.
>
> In Porto Alegre, 12 years of PT administrations have increased
> municipal income by 300%. The Dutra administration might not be
> able to achieve the same level of income redistribution from rich
> to poor. But it has successfully resisted immense pressures to
> continue privatisation and public sector redundancy, without
> cutting public services or increasing the tax burden on the
> majority of the population.
>
> Debt
>
> The new government has been handicapped by a very unfavourable
> debt repayment agreement which the Britto government signed in
> the months before the election. The Dutra administration found
> itself bound by an agreement to pay much more in debt repayment
> than Britto had done. In case of non-privatisation, this
> percentage was to increase. The outgoing state government had
> also ceded soverignty, authorising the federal government to
> directly seize state resources in persuit of its claim.This
> legislation designed to impose a stratitjacket on the incoming PT
> administration, and to force it to privatise what is left of the
> state sector.
>
> Vice Governor Miguel Rosetto realised that refusal to repay the
> debt would isolate the new government, and be used to justify an
> intervention by the federal authorities. Default would also
> prevent the Dutra government from borowing money on the commecial
> market. The Dutra government could have continued Britto
> strategy, by selling the remaining state assets: Banrisul
> (Brazil's 14th largest bank), the remaining shares in the
> electricity utility CEEE, the water treatment company Corsan, and
> the information technology company Procergs. It could also use
> federal and international credits offer for "downsizing" the
> civil service.
>
> But privatisation and reduncancy were out of the question.
> Rosetto quickly developed a dual strategy. State procurator Paulo
> Torelly found a series of legal loopholes that enabled Rio Grande
> do Sul to deduct its debt from other payments owed by the federal
> government, but frozen because of the financial crisis.
> Meanwhile, Dutra and Rosseto tried to maximise an anti-debt
> movement, both in the institutions and in broader society. Dutra
> managed to bring together five governors (three from the PT and
> two from the ruling parties) to demand a renegotiation of the
> federal government's treatment of all states' debt. Meanwhile,
> the PT and trade unions threw their efforts into public
> discussion of the debt, and strategies for building a "can't pay,
> won't pay" movement. They linked this to the development of a
> Brazilian wing of the international ATTAC movement for taxatoin
> of financial transactions.
>
> Many PT supporters elsewhere in Brazil were disappointed that Rio
> Grande do Sul did not mount a more agressive campaign, or simply
> default on its debt. Other state leaders, notably former federal
> president Itamar Franco, made much more noise. But according to
> Luis Felipe Nelsis of the Vice Governor's office, "bourgeois
> dissidents have more room to make noise than we do. They scream
> and shout, and then do a deal behind closed doors. After all,
> they're all part of the federal president's political 'familiy.'
> We on the other hand can only move forward if we have convinced
> the population of the need to do so, and educated them about the
> possible consequences."
>
> Left frustration with Rio Grande's 'moderation' on the debt
> question has died away in recent months, as all the other
> governments have fallen in line with the federal administration,
> while Rio Grande do Sul has continued to build popular support
> for a renegotiation of federal debt, and of the country's debt to
> foreign banks and governments.
>
> The new administration has also demonsrtated its committment to
> "governing differently" by cutting over 80% from the budget for
> publicity, governor's travel, car hire and congresses. Total
> non-wage and non-investment costs of the administration have been
> cut by over 29%.
>
> Stability achieved
>
> "The opposition said that, unless we privatised, there'dbe no
> money to pay the wages in March [the third month of the Dutra
> mandate]," says Nelsis. "In fact, we have paid on time throughout
> the year, even the bonus 13th month. No other state in Brazil can
> say the same. We have drastically reduced the deficit, from
> R$1.2bn to R$0.3-0.4bn. We have increased receipts, despite
> economic stagnation. We have ended exceptions that prevented us
> from taxing Cable TV, beer and some other products.
> Unfortunately, there is a continued tax war between the states of
> Brazil, making competitive cuts in the hope that this will
> attract companies. We have increased resources on detecting
> fraud, and reduced the incentives which had such a big cost to
> society. But we need a federal renegotiation to resolve the
> question of tax competition between the states."
>
>
>
>
>
> 3 -- ambitious policies
>
> Debt reduction and austerity measures required an enormous
> effort. But they made possible the regular function of the state
> machinery, and -- so far-- regular payment of salaries, without
> privatisation or redundancies. To have refused these pressures,
> and survived, was a considerable achievement. It distinguishes
> Rio Grande do Sul from all the other Brazilian states. But the
> Dutra administration has gone much further. It has already
> signalled new priorities, and changed the pattern of spending, so
> as to direct resorces to the majority of the population.
>
> Renegotiating with the multinationals
>
> One promise of the electoral campaign was to reevaluate and
> renegotiate the previous administration's contracts with
> multinational investors. Tax breaks, infrastructure promises and
> other state committments threatened to empty the public purse,
> while creating very few permanent jobs. The Dutra administration
> sucessfully renegotated its contract with General Motors, saving
> over R$103m. It also convinced Dell Computors to accept lower
> incentives over a longer period, and source a greater part of its
> scientific and technical work from local subcontractors.
>
> Unfortunately, the Ford motor company was less advanced in its
> installation, and was already worrying about the financial
> implications of another Brazilian factory. Encouraged by the
> federal government, Ford walked away from the negotiations,
> refusing to return the R$134m already paid by Rio Grande do Sul.
> Ford has now promised to build a factor in Bahia state, where it
> is alrady recieving massive state subsidies.
>
> The new administration has also renegotiated over 400 contracts
> with a series of public sector contractors, particualry the road
> building and opperating comapnies. In exchange for new orders and
> longer concessions, contractors have reduced their costs. Critics
> warned that the participatory budget system would force the
> government to split investment into impossibly small parcels. But
> in 1999 the Dutra government was able to spend R$299m on road
> spending -- more than any incoming state government. In Brazil,
> roadbuilding is a traditional election--year programme. In Rio
> Grande, election no longer depends on populist stunts.
>
>
>
> Health
>
> The government is only partially satisfied with its progress in
> the field of health. Most resources are federal, and the public
> health system is in crisis. According to Nelsis, "we were able to
> plan well, and integreate movements concerned with health care.
> We won greater control over health care, and passed control to
> the municipalities, at their request. We accompanied this with
> state financial and logistic support. Despite a generalised fall
> in health spending, we improved the public health system,
> compared to the previous government. The perspective is for
> growth in a well organised system."
>
> The Unitary Health System (SUS) was decentralised and
> regionalised, improving access to health care accross the state.
> An emergency loan of R$3.8m to 12 charity hospitals prevented
> them from leaving the SUS, and preserved public access to these
> establishments. At the request of the municipalities, the state
> administation began devolving responsibility, and resources, for
> health care, to a series of inter-municipality health
> consortiums. The state has also provided 31bn to create local and
> intermunipcal health consortiums. Total health spending
> increased.
>
> Education
>
> The number of secondary school places increased by 18.62% (60,485
> students). The state now guarantees a place in public school to
> every every child and adolescent who wishes to study. This
> required an additional 35,000 teacher hours, which was provided
> by contracting 2,500 new teachers (with another 2,800 planned)
> and 1,375 administrative personel (when the PT took over the
> state, only one in three schools had administrative personel to
> support the pedagogic staff). Rio Grande continues to have
> Brazil's best literacy campaigns (MOVA-RS), and the erradication
> of illiteracy is now a realistic target.
>
> The government also launched an ambitious two year education
> debate (Constituente Escolar), to refound the school system on
> democratic and quality system. Unfortunately, the teachers' union
> has so far boycotted the debate, in support of its wage demands.
>
> Agriculture
>
> Few in government are happy with their progress in the field of
> land reform. "This is a very conflictive area," says Nelsis. "But
> this isn't the only reason why we've falled behind. The
> government's land reform secretariat is staffed by comrades from
> the Landless Movement (MST). But they had low adminstrative
> experience."
>
> Nevertheless, Rio Grande do Sul does at least have an agrarian
> reform programme, after ten years of complete government
> inactivity. The government has allocated R$43m for land reform,
> including R$28m to buy land (which is quite cheap now, because of
> the agricultural crisis). But Nelsis is careful to warn that "the
> government can't substitute for generalised social struggle,
> around questions of land, salary and so on. The basic force for
> transformation is the social movement. We can make the public
> administrative system receptive to this pressure. But we can't do
> it all on behalf of the movements."
>
> The new PT administration was never going to be able to solve the
> landless problem. Only the federal state has the authority to
> confiscate and reallocate land. And the balance of forces in Rio
> Grande doesn't allow the government to m
>
>
> ------------------------------------------------------------------------
> Cuba SI: http://www.egroups.com/group/cubasi/
> Imperialism NO! Venceramos!
> Information and discussion about Cuba.
> Discussion of the path of Ernesto Che Guevara.
>
> ------------------------------------------------------------------------
> Want to send money instantly to anyone, anywhere, anytime?
>
> You can today at X.com - and we'll give you $20 to try it! Sign
>
> up today at X.com. It's quick, free, & there's no obligation!
> http://click.egroups.com/1/332/0/_/30563/_/949250669/
>
> -- Easily schedule meetings and events using the group calendar!
> -- http://www.egroups.com/cal?listname=cubasi&m=1
>
>
