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Paralyzed, Brazil Enters Eighth Day as Hostage of Truck Drivers

Truck drivers stop the BR-040 road, in Valparaíso de Goiás during strike against fuels hike - Valter Campanato/ABr

Brazil should start this Monday a new week and the eight day with a crippling truck drivers strike that has brought Latin America’s largest economy to a screeching halt. This, despite the intervention of the Army and government’s concessions lowering the price of the diesel.

A truckers protest over diesel prices that has crippled key sectors of the Brazilian economy dragged into the weekend, putting drivers in a standoff with Brazilian President Michel Temer who authorized military force to clear highways.

Brazil’s largest city and economic hub, São Paulo, decreed a state of emergency, as did Rio de Janeiro. Gas stations and airports across the nation ran out of fuel, supermarket shelves went bare and hospitals said they were running out of supplies.

Public transport and trash collection was reduced or halted across the country, and many schools canceled classes as teachers could not get to work.

Lack of feed supplies may cause one billion birds and 20 million hogs to die, Brazilian meat group ABPA said.

“Those blocking the highways and acting in a radical manner are hurting the population,” Temer said in a televised address. “We will not allow hospitals to run out of supplies to save lives. We will not allow children to be harmed by the closure of schools.”

Yet Sunday night, much of the country remained paralyzed. In response to the threat of military action, Abcam, a Brazilian truckers association that says it represents 600,000 drivers, called on them to no longer block roads.

However, it encouraged the drivers to keep protesting and not deliver goods, meaning it was likely the situation would remain critical.

Negotiators for several trucker groups agreed late on Thursday to suspend their blockages for 15 days after the government vowed to subsidize and stabilize diesel prices, which may cost 5 billion reais (US$ 1.4 billion) this year.

To win over truckers the government promised to extend for 60 days a 10% diesel price cut announced by state-led oil company Petrobras. Shares of Petrobras, as the company is known, closed down nearly 1.4% on Friday after plunging 19% in the prior two days, as the blockades continued.

But the Abcam trucking association that ignited the strike was not among the parties that signed the accord and insisted on Friday it would not do so until Congress puts diesel tax cuts into law, which would take several days at the quickest.

No trucks were able to enter the port of Santos, Latin America’s largest, and oilseeds crushing group Abiove anticipated that soy exports would halt on Saturday if truckers did not allow access to major ports. Meat group ABPA said 152 poultry and pork processing plants had indefinitely suspended production.

Auto production in Brazil, which contributes about a quarter of industrial output, ground to a halt on Friday in the latest blow to a fragile economic recovery following the worst downturn in decades.

Amnesty International

Brazil’s federal government must halt its deployment of the military to clear highways blocked by striking truck drivers, Amnesty International said.

The order, announced on Friday afternoon, represented the first time that the Brazilian government has authorized the Armed Forces to enforce the law and halt civic disruption at national level since the end of the military regime in 1985.

“The role of the armed forces is not to break up protests, assemblies or strikes. The state must respect our human rights to freedom of expression and peaceful assembly,” said Jurema Werneck, Executive Director at Amnesty International Brazil.

“The protesters and the appropriate authorities must negotiate a peaceful resolution to any disagreements. Sending in the military is a disproportionate response to this strike that could lead to a serious escalation of violence.”

Security Forces

The Brazilian government authorized the use of federal security forces where protesting truckers refrain from freeing the roads blocked as part of their countrywide rallies.

The announcement was made by Temer at the Planalto presidential palace after a meeting with cabinet members and the president.

“I’d like to unveil an immediate security plan to mobilize federal security forces to unblock the roads, and I’m requesting state governors to follow suit. We will not allow the population to be deprived of basic need items, hospitals to be deprived of supplies to save lives, and children to be deprived of school.

“Those blocking the road in radical fashion will be held accountable for it. As always, the government has the courage to negotiate; now it will have the courage to resort to its authority in defense of the Brazilian people,” the president stated.

Temer’s ministers announced earlier a deal, which included the suspension of the protests carried out by the truckers for 15 days. However, not all of the truck drivers’ associations accepted the proposal.

In São Paulo, pickup trucks and trucks are still seen lined up by the curb. This is also the case in the states of Paraná, Santa Catarina, and Rio Grande do Sul, where protests are being staged in 74 locations. In the Federal District, the police reported demonstrations on four highways.

In the deal between the government and the truck drivers’ representatives, the stoppage was to be suspended for 15 days. Petrobras, in turn, agreed to keep the 10% reduction in the diesel price at the refineries for 30 days, while the government seeks ways to cut prices.

Petrobras is reiterating its commitment to afford the discount – estimated at over US$ 95 million – in the first 15 days. The following 15 days will be financed by the government.

The government also pledged predictable monthly prices by the end of the year, with no changes to Petrobras’s pricing policies, and will also subsidize the price differences from prices fixed by the firm each month.

“When the diesel price at the refinery drops and stays under what has been set, Petrobras has a credit that reduces the costs of the Treasury,” Finance Minister Eduardo Guardia said.

Representatives from truck drivers’ associations call for the end of the tax burden on diesel. They expect the Senate to approve the exemption from some taxes on diesel up to the end of the year.

The matter was approved yesterday by the lower house and should now be submitted to the Senate. Should it be approved, the exemption from these taxes will have to be further sanctioned by the president.

Leaders Diverge

In the second meeting with representatives from eleven truck driver trade unions, the government attempted to come to an agreement, but not all of those in attendance accepted the deal.

José Fonseca Lopes, a representative from the Brazilian Association of Truck Drivers, rejected the proposal brought forth by the government to suspend the strike for 15 days to a month while the government continues to seek a solution to the problem with diesel prices.

Lopes said that other union leaders welcomed the government’s suggestion, but he did not, and left the meeting before it was over. The association chaired by Lopes represents 700 thousand truckers, with 600 trade unions spread throughout Brazil.

While the meeting was taking place at the Planalto presidential palace, Wallace Landim, a union leader representing autonomous drivers in the country’s Central-West, said his trade had no representation in the meeting and that no decision made in it would be taken into consideration. His stance is similar to that of Lopes – blockages should continue until the taxes levied on diesel are eliminated.

In a statement made Thursday (May 24), Fonseca Lopes, president of the Brazilian Truck Drivers’ Association, said that the protests will only be brought to an end after President Michel Temer confirms the lower house decision to abolish another tax on diesel.

The government had already agreed with Congress to eliminate one of the taxes-a move now awaiting a presidential decree to become effective.

The other tax, pending approval from Congress, is yet to be approved by the Senate before being okayed by the president.

MP/ABr

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It seems the future never arrives in Brazil What Lies Ahead in Brazil? Brazil Has No Exemplary Past or Present. But What Lies Ahead for the Country? Europeans, US, developed country, developing country. Bolsonaro, future B. Michael Rubin For years, experts have debated what separates a developing country from a developed one. The GDP (Gross Domestic Product) of a country is one simple way to measure its economic development. Another way to measure a country's progress is the extent of public education, e.g. how many citizens complete high school. A country's health may be measured by the effectiveness of its healthcare system, for example, life expectancy and infant mortality. With these measurement tools, it's easier to gauge the difference between a country like Brazil and one like the U.S. What's not easy to gauge is how these two countries developed so differently when they were both "discovered" at the same time. In 1492 and 1500 respectively, the U.S. and Brazil fell under the spell of white Europeans for the first time. While the British and Portuguese had the same modus operandi, namely, to exploit their discoveries for whatever they had to offer, not to mention extinguishing the native Americans already living there if they got in the way, the end result turned out significantly different in the U.S. than in Brazil. There are several theories on how/why the U.S. developed at a faster pace than Brazil. The theories originate via contrasting perspectives – from psychology to economics to geography. One of the most popular theories suggests the divergence between the two countries is linked to politics, i.e. the U.S. established a democratic government in 1776, while Brazil's democracy it could be said began only in earnest in the 1980s. This theory states that the Portuguese monarchy, as well as the 19th and 20th century oligarchies that followed it, had no motivation to invest in industrial development or education of the masses. Rather, Brazil was prized for its cheap and plentiful labor to mine the rich soil of its vast land. There is another theory based on collective psychology that says the first U.S. colonizers from England were workaholic Puritans, who avoided dancing and music in place of work and religious devotion. They labored six days a week then spent all of Sunday in church. Meanwhile, the white settlers in Brazil were unambitious criminals who had been freed from prison in Portugal in exchange for settling in Brazil. The Marxist interpretation of why Brazil lags behind the U.S. was best summarized by Eduardo Galeano, the Uruguayan writer, in 1970. Galeano said five hundred years ago the U.S. had the good fortune of bad fortune. What he meant was the natural riches of Brazil – gold, silver, and diamonds – made it ripe for exploitation by western Europe. Whereas in the U.S., lacking such riches, the thirteen colonies were economically insignificant to the British. Instead, U.S. industrialization had official encouragement from England, resulting in early diversification of its exports and rapid development of manufacturing. II Leaving this debate to the historians, let us turn our focus to the future. According to global projections by several economic strategists, what lies ahead for Brazil, the U.S., and the rest of the world is startling. Projections forecast that based on GDP growth, in 2050 the world's largest economy will be China, not the U.S. In third place will be India, and in fourth – Brazil. With the ascendency of three-fourths of the BRIC countries over the next decades, it will be important to reevaluate the terms developed and developing. In thirty years, it may no longer be necessary to accept the label characterized by Nelson Rodrigues's famous phrase "complexo de vira-lata," for Brazil's national inferiority complex. For Brazilians, this future scenario presents glistening hope. A country with stronger economic power would mean the government has greater wealth to expend on infrastructure, crime control, education, healthcare, etc. What many Brazilians are not cognizant of are the pitfalls of economic prosperity. While Brazilians today may be envious of their wealthier northern neighbors, there are some aspects of a developed country's profile that are not worth envying. For example, the U.S. today far exceeds Brazil in the number of suicides, prescription drug overdoses, and mass shootings. GDP growth and economic projections depend on multiple variables, chief among them the global economic situation and worldwide political stability. A war in the Middle East, for example, can affect oil production and have global ramifications. Political stability within a country is also essential to its economic health. Elected presidents play a crucial role in a country's progress, especially as presidents may differ radically in their worldview. The political paths of the U.S. and Brazil are parallel today. In both countries, we've seen a left-wing regime (Obama/PT) followed by a far-right populist one (Trump/Bolsonaro), surprising many outside observers, and in the U.S. contradicting every political pollster, all of whom predicted a Trump loss to Hillary Clinton in 2016. In Brazil, although Bolsonaro was elected by a clear majority, his triumph has created a powerful emotional polarization in the country similar to what is happening in the U.S. Families, friends, and colleagues have split in a love/hate relationship toward the current presidents in the U.S. and Brazil, leaving broken friendships and family ties. Both presidents face enormous challenges to keep their campaign promises. In Brazil, a sluggish economy just recovering from a recession shows no signs of robust GDP growth for at least the next two years. High unemployment continues to devastate the consumer confidence index in Brazil, and Bolsonaro is suffering under his campaign boasts that his Economy Minister, Paulo Guedes, has all the answers to fix Brazil's slump. Additionally, there is no end to the destruction caused by corruption in Brazil. Some experts believe corruption to be the main reason why Brazil has one of the world's largest wealth inequality gaps. Political corruption robs government coffers of desperately needed funds for education and infrastructure, in addition to creating an atmosphere that encourages everyday citizens to underreport income and engage in the shadow economy, thereby sidestepping tax collectors and regulators. "Why should I be honest about reporting my income when nobody else is? The politicians are only going to steal the tax money anyway," one Brazilian doctor told me. While Bolsonaro has promised a housecleaning of corrupt officials, this is a cry Brazilians have heard from every previous administration. In only the first half-year of his presidency, he has made several missteps, such as nominating one of his sons to be the new ambassador to the U.S., despite the congressman's lack of diplomatic credentials. A June poll found that 51 percent of Brazilians now lack confidence in Bolsonaro's leadership. Just this week, Brazil issued regulations that open a fast-track to deport foreigners who are dangerous or have violated the constitution. The rules published on July 26 by Justice Minister Sérgio Moro define a dangerous person as anyone associated with terrorism or organized crime, in addition to football fans with a violent history. Journalists noted that this new regulation had coincidental timing for an American journalist who has come under fire from Moro for publishing private communications of Moro's. Nevertheless, despite overselling his leadership skills, Bolsonaro has made some economic progress. With the help of congressional leader Rodrigo Maia, a bill is moving forward in congress for the restructuring of Brazil's generous pension system. Most Brazilians recognize the long-term value of such a change, which can save the government billions of dollars over the next decade. At merely the possibility of pension reform, outside investors have responded positively, and the São Paulo stock exchange has performed brilliantly, reaching an all-time high earlier this month. In efforts to boost the economy, Bolsonaro and Paulo Guedes have taken the short-term approach advocated by the Chicago school of economics championed by Milton Friedman, who claimed the key to boosting a slugging economy was to cut government spending. Unfortunately many economists, such as Nobel Prize winner Paul Krugman, disagree with this approach. They believe the most effective way to revive a slow economy is exactly the opposite, to spend more money not less. They say the government should be investing money in education and infrastructure projects, which can help put people back to work. Bolsonaro/Guedes have also talked about reducing business bureaucracy and revising the absurdly complex Brazilian tax system, which inhibits foreign and domestic business investment. It remains to be seen whether Bolsonaro has the political acumen to tackle this Godzilla-sized issue. Should Bolsonaro find a way to reform the tax system, the pension system, and curb the most egregious villains of political bribery and kickbacks – a tall order – his efforts could indeed show strong economic results in time for the next election in 2022. Meanwhile, some prominent leaders have already lost faith in Bolsonaro's efforts. The veteran of political/economic affairs, Joaquim Levy, has parted company with the president after being appointed head of the government's powerful development bank, BNDES. Levy and Bolsonaro butted heads over an appointment Levy made of a former employee of Lula's. When neither man refused to back down, Levy resigned his position at BNDES. Many observers believe Bolsonaro's biggest misstep has been his short-term approach to fixing the economy by loosening the laws protecting the Amazon rainforest. He and Guedes believe that by opening up more of the Amazon to logging, mining, and farming, we will see immediate economic stimulation. On July 28, the lead article of The New York Times detailed the vastly increased deforestation in the Amazon taking place under Bolsonaro's leadership. Environmental experts argue that the economic benefits of increased logging and mining in the Amazon are microscopic compared to the long-term damage to the environment. After pressure from European leaders at the recent G-20 meeting to do more to protect the world's largest rainforest, Bolsonaro echoed a patriotic response demanding that no one has the right to an opinion about the Amazon except Brazilians. In retaliation to worldwide criticism, Bolsonaro threatened to follow Trump's example and pull out of the Paris climate accord; however, Bolsonaro was persuaded by cooler heads to retract his threat. To prove who was in control of Brazil's Amazon region, he appointed a federal police officer with strong ties to agribusiness as head of FUNAI, the country's indigenous agency. In a further insult to the world's environmental leaders, not to mention common sense, Paulo Guedes held a news conference on July 25 in Manaus, the largest city in the rainforest, where he declared that since the Amazon forest is known for being the "lungs" of the world, Brazil should charge other countries for all the oxygen the forest produces. Bolsonaro/Guedes also have promised to finish paving BR-319, a controversial highway that cuts through the Amazon forest, linking Manaus to the state of Rondônia and the rest of the country. Inaugurated in 1976, BR-319 was abandoned by federal governments in the 1980s and again in the 1990s as far too costly and risky. Environmentalists believe the highway's completion will seal a death knoll on many indigenous populations by vastly facilitating the growth of the logging and mining industries. Several dozen heavily armed miners dressed in military fatigues invaded a Wajãpi village recently in the state of Amapá near the border of French Guiana and fatally stabbed one of the community's leaders. While Brazil's environmental protection policies are desperately lacking these days, not all the news here was bad. On the opening day of the 2019 Pan America Games in Lima, Peru, Brazilian Luisa Baptista, swam, biked, and ran her way to the gold medal in the women's triathlon. The silver medal went to Vittoria Lopes, another Brazilian. B. Michael Rubin is an American writer living in Brazil.

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