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Brazzil - Politics - August 2004

Left Unchecked Lula Would Muzzle Brazil

Three recent proposals by Brazilian President Lula have caused uproar
in Brazil. The first would create a Federal Counsel of Journalism
to police journalists' activities. The second would establish a
National Agency of Movies and Audiovisual. And the third would
prohibit certain government officials from speaking to the press.

Richard Hayes


Picture The Brazilian economy continues to pick up and is now at the level it was in 2002 before fears about Lula's winning the election caused turmoil, according to some sources.

As it turns out, due to pursuing the orthodox monetary and fiscal policies of the previous government, the PT or Workers' Party government has as yet not proven to be the disaster that many had predicted.

Due to healthy industrial growth, unemployment has leveled off and people are spending money as fears about loosing their jobs, if they have one, have lessened.

The GNP may grow by 4 percent this year, more than eliminating the negative growth during the first year of Lula's reign.

This growth may not be sustainable though, as industrialists are hesitant to invest in new plant and equipment while unused capacity at many factories is reaching a low point.

Exports may reach a record US$ 90 billion this year with a favorable trade balance of $ 30 billion a distinct possibility.

These and other statistics have caused a stabilization of the real, a reduction in the so called Brazil risk to 555 basis points and have elevated the quotation of C bonds to over 0.96 US to the dollar.

Evidently foreign investors and speculators feel that Brazil will be able to continue to service its debt while rolling maturing principal.

The signs of a growing economy have caused a nearly 10 percent improvement in Lula's popularity rating as well as that of his government, according to recent polls.

With the October municipal elections growing nearer, emphasis on the part of the PT is focused on the city of São Paulo where incumbent Marta Suplicy, of the PT, has now passed over José Serra in the polls.

This has caused a certain amount of euphoria in the PT ranks and they are now talking openly of Lula's re-election in 2006.

The PT while in the opposition always was against a second term for elected officials. But now that they are in control naturally the Workers' Party wishes to perpetuate their rule and occupation of the apparatus of government.

Controversial Measures

Three recent proposals of the PT government have caused uproar in the media and conservative circles. One measure would create a Federal Counsel of Journalism that would have the power to deprive reporters of their credentials and otherwise police their activities.

The government claims that the National Federation of Journalists (FENAJ) a union controlled by leftist leaning members of CUT, an ardent PT supporting group of unions, prepared the text.

If enacted, the first steps toward muzzling the press and creating a Pravda or Granma will be in place. The PT can dish out criticism but seems unwilling to take it. There are plenty of semi-employed "journalists," members of FENAJ that would happily work in government controlled propaganda agencies.

The second proposal is to create a National Agency of Movies and Audiovisual (ANCIVAN) to monitor the activities of the film industry. The rational behind this, according to the government ministries involved, is to support the Brazilian filmmaking industry. However, it reeks of censorship and totalitarianism.

A third proposal would prohibit government employees below that of a certain rank to speak to the press. These are merely examples of how the PT could gradually become an elected dictatorship if given the opportunity.

Apathy on the part on the populace, a very low educational level and compulsory voting make it easy for an organized political party such as the PT to accomplish their goals.

PT party financing is partially obtained by an involuntary levy that ranges from 0.5 percent to 20 percent, on the salaries of government employees and elected officials who are members of the party.

This provides a strong incentive for the government to create more ministries, agencies, advisory counsels and other civil service jobs to be handed out party members with little regard to the ability of these appointees to perform.

Therefore, Brazilian taxpayers of all political leanings are indirectly financing the PT, by far the most organized and dedicated of Brazil's numerous political parties.

Shaky Democracy

As the planting season for soybeans is growing near, farmers would like to know if they might legally plant genetically modified seeds. Congress has yet to define policy as this long awaited material is bogged down in disputes among environmentalists and those concerned about the health hazards of food products.

Political reform has been put on the back burner indefinitely as is the matter of central bank autonomy, something that was promised to the IMF and creditors.

Also stalled in a congress more concerned about October's municipal elections are the bankruptcy law, judiciary reform, tax reform and the project to create PPP or Partnerships between Public and Private sectors, which the government says will result in infrastructure projects, sewage, ports and highways for which the government by itself lacks funds.

In spite of the lackadaisical habits of Brazil's legislators and the inefficiency of the judicial system, it is up to these two branches of government to protect the society against the encroachment of the federal executive branch.

The states, many of which are governed by non-PT persons who make sense, are loosing tax revenues to Brasília.

Opposition to the PT is fragmented, but best represented by the PSDB and PFL that formed part of the coalition that helped Fernando Henrique Cardoso govern.

The other big party, PMDB with little ideological conviction, swings back and forth according to what it perceives will create more favors for its members.

Unless the moderate Left and conservative elements unite soon, Brazil may be in for many years of rule by the PT and its collaborators.

José Dirceu, Lula's right hand man, spent his vacation in Cuba and was there for the 26 de Julio celebrations.

Lula himself favors democracy, but his government is riddled with those who would impose an authoritarian state denominated society.

The Finance Minister, Antonio Palocci, himself a former Trotskyite, is an exception to the others.

Since he is the most visible minister to foreign economic observers, the façade of a market-oriented government is thus far maintained, with the help of Henrique Meirelles, president of the central bank, who has managed to hang on to his job in spite of revelations of certain improprieties.

His explanations are far from complete but for the time being at least, his name and that of Banco do Brasil president Cássio Casseb have disappeared from the headlines.

Richard Edward Hayes first came to Brazil in 1964 as an employee of Chase Manhattan Bank. Since then, Hayes has worked directly and as an advisor for a number of Brazilian and international banks and companies. Currently he is a free lance consultant and can be contacted at 192louvre@uol.com.br.
São Paulo, August 18, 2004.

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