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BRAZIL:
Looking for
Unlost Electoral Causes
Mario Osava
RIO DE JANEIRO, (IPS) -
Brazil's economic slowdown has
joined forces with the
corruption scandals to threaten
President Luiz Inácio Lula da
Silva's chances of re-election
in October 2006, leaving
progress in the fight against
social inequality as his only
electoral banner still waving.
Everything that happens in
Brazil today, be it new
revelations about corruption or
economic statistics, matters not
just in and of itself, but as an
element influencing the
electoral debate.
Against that backdrop, the1.2
percent dip in gross domestic
product (GDP) in the third
quarter of this year, compared
to the same period last year,
dealt a further blow to the
hopes of President Lula and his
leftist Workers' Party (PT) of
remaining in power.
But the electoral banners seem
to have changed hands. The
conservative opposition, which
tried to block Lula's victory in
2002 by trumpeting the risks of
economic instability if a
leftwing government were
elected, can now resort to
speechifying about corruption,
when the anticorruption platform
was previously a monopoly of the
PT.
The scandal that broke out in
May and revealed illegal
campaign contributions and
alleged bribes of legislators
destroyed the PT's image as an
ethical party.
If the economy remains stagnant
for a few more quarters, Lula
and the PT will also lose the
ability to tout Brazil's
economic recovery. GDP grew by
4.9 percent in 2004, but this
year's figure will amount to
just over half that, analysts
project. That is much lower than
the GDP of several neighbouring
countries, and far below what
might be expected given the
current strong performance of
the international economy.
For this reason pressure has
intensified within the
government itself against Lula's
economic policy, based on tight
public spending and high Central
Bank interest rates, which now
stand at an annual 18.5 percent.
At least the government recently
received one piece of good news
in its favour: the reduction of
poverty and social inequality in
2004.
Three million people have been
raised out of absolute poverty,
celebrated the minister of
Social Development, Patrus
Ananías, referring to the
results of the National
Household Sample Survey, carried
out annually by the Brazilian
Institute of Geography and
Statistics (IBGE).
The proportion of Brazilians
living in extreme poverty -
defined in Brazil as those who
cannot afford an adequate diet -
dropped from 27.26 to 25.08
percent of the population in
2004, according to Marcelo Neri,
an economist who specialises in
social questions at the Getulio
Vargas Foundation in Rio de
Janeiro.
That means eight percent of the
40 million people who were
living in extreme poverty in
2003 have pulled out of that
category.
One-third of this improvement
was due to the 4.9 percent
economic growth and two-thirds
to the narrowing of the gap
between the rich and the poor,
which has finally begun to close
slightly after three decades,
said the researcher, who
predicted that this could be the
decade of reducing inequality in
Brazil.
Based on the United Nations
criteria that follows the World
Bank definition setting the
extreme poverty line at a dollar
a day, Brazil has apparently met
the first of the eight
Millennium Development Goals:
cutting extreme poverty levels
by half between 1990 and 2015,
said Neri.
According to this more narrow
definition of extreme poverty,
12.41 percent of the Brazilian
population fell into that
category in 1993, a proportion
that has fallen to less than
half of that this year. The
economist reckons that poverty
reduction in 2005 will be
similar to that of last year.
Although the economy will grow
at a slower pace, he said, the
minimum monthly wage has been
increased by nine percent and
the government has expanded its
programme of "family grants."
These monthly stipends of 15 to
95 reals (6.80 to 43 dollars)
for poor families who keep their
children in school - the
government's main social
programme - are largely
responsible for narrowing the
gap between rich and poor over
the past two years, said another
expert, Ricardo Paes de Barros
with the Planning Ministry's
Institute for Applied Economic
Research.
His conclusion is based on
statistical data from IGBE,
which reveals that between 2002
and 2004 the number of families
receiving income in the form of
rental payments, financial
investments, dividends, and
"other" unidentified sources
increased from 13.7 percent to
24.4 percent. The "other" income
includes the family grants.
The programme assisted 6.57
million families in 2004. The
goal is for it to reach 8.7
million families this year, and
11.2 million families by the end
of Lula's term in December 2006.
The recipe for fighting poverty
is to reduce inequality and
promote economic growth,
according to Barros.
Lula, however, has stated that
unsatisfactory economic results
are not a barrier to social
progress, ignoring the fact that
unless a large number of jobs
can be generated, the country's
social wounds will not close.
A majority of economists in
Brazil are critical of the
Central Bank's extremely high
interest rates, including those
who support the policy of
setting targets for inflation.
Treasury Minister Antonio
Palocci is now in a weaker
position to resist the
generalised pressure to ease
monetary policy, loosen the
fiscal screws and increase
spending. On top of the fall in
GDP growth, many of his former
advisers are involved in
corruption scandals and he
himself is facing a possible
investigation. |
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