Brazil: Strikes Try Lula’s Party

 Brazil: Strikes Try Lula's Party

The implications of
Piauí Governor’s failure to navigate through
an impending disaster could have wider and more profound
implications for Brazil Lula’s Workers’ Party. If the strikes in
that state spread this will be shown as yet another example
of the PT being unable to introduce much-needed reforms.
by: Guy


You have to wonder whether the left-wing Workers Party (PT) administration
in the north-eastern state of Piauí is set to suffer the same problems
that one of its first governors, Vitor Buaiz, faced in Espírito Santo,
eight years ago.

Since 8 June there have
been strikes by the police and prison officers over pay. The Piauí
governor, Wellington Dias, claims the state doesn’t have the money, since
much of its receipts from the federal government bypass the state to the municipalities.

In addition to disgruntled
state workers is the added problem of the large number of `ghost’ or inactive
workers on the government’s accounts. They cost Piauí around 27 million
reais (US$ 8.7 million).

Meanwhile the state also
has to cope with a debt to the federal government which comes in at around
22 percent of its annual budget.

Wellington Dias is limited
in what he can do to get out of this fix. He can’t take the easy route so
beloved of governors in the past, in the years of high inflation.

Before the 1994 Real Plan,
which effectively brought an end to rampant price rises, many state governments
simply raised their salaries and passed the cost on to the federal government.

The Fiscal Responsibility
Law, which was passed by Congress four years ago, limits the extent to which
the budgets of Brazil’s states and municipalities can be spent on the payroll
to 49 percent. Piauí’s current budget for salaries is 52 percent.

Last week, Wellington
Dias tried a different tactic. He went to Brasília to challenge the
federal government over his state’s debt with a view to renegotiating it.

But that may not bring
about much in the way of action. If the federal PT government makes a concession
for one of its own, then why shouldn’t it be the same for the other 25 states?

On Thursday, Wellington
Dias’s Finance Minister, Antonio Neto, proposed a series of measures. These
would involve making cuts and redundancies throughout the budget, in the hope
of streamlining Piauí’s bloated accounts.

Rough Ride

But treading down this
path presents Piauí’s PT administration with several obstacles that
observers of the ill-fated Vitor Buaiz will recognise. Assuming the national
political party arrangements are reflected at the state level, a quick glance
at the Piauí legislative assembly indicates that Wellington Dias may
be in for a rough ride.

Of the 30 deputies, only
three come from the governor’s own party. Even assuming some form of co-operation
with political groupings which the PT works with in the Congress in Brasília,
including Leonel Brizola’s Democratic Workers Party (PDT) and the Liberal
Party (PL), then the most this group would muster are seven deputies—still
eight short of a majority.

By contrast, the conservative
Liberal Front Party (PFL) has nine deputies and the Brazilian Social Democrat
Party (PSDB) and the right-wing Brazilian Popular Party (PPB) four each: 17
in total, more than enough to pass their own measures, or block those of the

And the PFL has been making
mischief in the last few days. It’s leader in the assembly, Homero Castelo
Branco, called for President Lula to write off the state’s 2.7 billion reais
(US$ 870 million) debt, using the federal government’s decision to forgive
300 million reais (US$ 97 million), which Bolivia owed to Brazil.

But this is little more
than gesture politics, since it is unlikely Brasília will take much
heed of the proposal, thereby showing up Wellington Dias’s inability to influence
members of his own party in the national government.

Castelo Branco followed
this up a day or so later with an even cheekier suggestion. Wellington Dias’s
administration, he said, "should suspend all official government publicity
on the TV, radio, newspapers, magazines and other media for six months, and
halt financial support to any type of event for the same amount of time."
In other words, not only cut back the budget, but not explain to the public
why it is necessary to do so.

Even if the PT administration
took up these proposals and set about slashing its costs, it wouldn’t only
have the opposition in the legislature to worry about.

As the party of the unions,
making cuts in the state workforce, or at least reducing their salaries, would
affect the governor’s base of support. Making savings across a wider front
than just the police and prison officers could well spark broader protests
and bring him into confrontation with his own kin.

Indeed, on the same day
the PFL’s Castelo Branco was proposing Brasília forgive Piauí’s
debt, two of the senior police officers involved in the strike were sacked,
prompting a spirited defence on their behalf by a PT councillor.

Lessons from the Past

As members of Wellington
Dias’s party begin to decide whether their loyalties lie with the governor
or the workers, Piauí’s police were also considering whether to continue
the strike further.

For observers of the PT,
the best comparison with the current situation in Piauí must be Vitor
Buaiz’s own experience in Espírito Santo. Coming to power in 1995,
he was faced with an overgrown state machine which needed pruning.

But he was one of the
first governors to operate in the post-Real Plan environment, so he initially
met the workers’ demands by raising salaries. But inflation had disappeared
and eventually the increased pay rises began to hurt. In 1996 his administration
put forward a range of emergency measures, including voluntary redundancies
and reduced services.

He was dependent on an
opposition right-wing majority to get his measures through the legislature.
But unfortunately for Buaiz, when they began to bite and brought protests
out onto the street, the legislature cleverly dumped the blame at his door.

By working with the right-wing
majority in the state assembly, Buaiz upset his constituency in the Espírito
Santo PT. The party eventually split. Buaiz was threatened with expulsion
and resigned from his party.

And the PT failed to stand
a candidate for governor in the ensuing elections in 1998. Two years later,
members of the local PT were still claiming to say that the experience had
divided the party, setting the cause of left-wing politics and party back
by 20 years in the state.

There must be worries
in the PT’s national party headquarters in São Paulo and in Brasília
that such an occurrence doesn’t happen again. The question must be whether
they have learned anything from the experience with Bauiz and how they will
deal with the challenge faced by Wellington Dias in Piauí.

But the implications of
Wellington Dias’s failure to navigate through the impending disaster could
have wider and more profound implications. If the situation gets worse and
the strikes spread and the administration grinds to a halt, then this will
be shown as yet another example of the PT being unable to introduce much-needed
reforms at both the local and national level.

Already the government
in Brasília is grinding on with its social security reform, a challenge
made harder by many of the provisions being enshrined within the constitution.

But of more short-term
and immediate concern will be the way in which the performance of Wellington
Dias—and to some extent Lula and the PT government in Brasília—is
portrayed by the media in the run-up to October’s municipal elections.

The PT gets a pretty bum
rap from the national media, dominated as it is by the Globo empire, which
most Brazilians tend to tune into, in between the novelas (soap operas).

Will Lula and his team
let Wellington Dias take the fall? Or will they listen to one of Piauí’s
federal deputies in Brasília, Nazareno Fonteles, who on Friday, argued
that a renegotiation of the debt would help both social and economic development?

For the sake of Piauí
and the reputation of the PT, locally as well as nationally, the party needs
to come up with answers to the current financial crisis as well as showing
that it is still able to positively affect peoples’ lives.

Guy Burton was born in Brazil and now lives in London. His field work on
the Vitor Buaiz administration in Espírito Santo was published in
a co-authored chapter in Gianpaolo Biaocchi’s Radicals in Power (Zed
Books, London) last year. He can be contacted at
and maintains a blog,,
which addresses British and Brazilian politics as well as more general current

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