UNSTABLE BALANCE

Genserico Encarnação Jr.
<<eeegense@nutecnet.com.br>>
English version: Frida Eidelman

After accomplishment of half of Fernando Henrique Cardoso (FHC) administration, it is presented a brief analysis of this period.

First of all , it should be registered the stabilization of prices with the arrival of the Real Plan. Since it was launched, in July 1994, up to the end of 1996 the price indexes have increased a little more than 60%. The deed it most significant when one knows that the annual inflation rate remained at 10% last year.

Decisively this striking performance was beneficial to everyone, specially to the lower income population , increasing its consuming power. It is doubtful to believe that 32 million of the poor (twice the population of Chile) were reduced to the half, as the official propaganda has boasted . Nevertheless, even though difficult to quantify, the improvements were indisputable for those who kept their jobs.

The counterparts to this success were the conservation of the high interests policy which carries the main responsibility for the continuing increase of the public deficit; the exchange valuation which resulted in a deficit of US$ 5 billion in the commercial balance and a high unemployment level. The current exchange policy , by inducing the import of cheaper goods, forces the prices to remain stable allowing for the so called competitiveness blow to the national industry but, on the other hand, leads it to a delicate position, producing unemployment, denationalization or the closing of enterprises. As to the commercial deficit, it has been compensated by the considerable inflow of capital, avid of high interests, good opportunities of investments and keeping an eye on the government-owned enterprises which are liable to privatization.

Another positive point of the present government was the advance in the agrarian reform, with the creation of the proper Ministry, the modification of the Rural Territorial Tax, the institution of summary justice for expropriation of non-productive land and the settlements effected. Actually, this all would not have happened without the "Movimento dos Sem -Terra" (a Brazilian organization of landless - without rural property - people ) and, unfortunately, without the Pará massacre.

If the official propaganda and the big press can be trusted, the government has the merit of setting out an educational reform, which may change the track and the bankrupt state of this strategic sector. Nevertheless, as far as it is known, the federal universities are being emptied, without appropriate budget, with low salaries and an abundance of retirements.

To the credit of the government it should be included the brave process of revision of crimes committed during the dictatorship. In this particular point we are given an example to Latin America which still has General Pinochet as the head of the Armed Forces in Chile and hundreds of political prisoners under the Peruvian "democracy", which

became an issue with the regretful kidnapping of authorities and diplomats at the Japanese Embassy in Lima.

In order to balance the present analysis, we should examine now the weak points. The serious state of the public health sector is evident ( which will not be improved at all with the CPMF - a new tax on the economic transactions destined to the health sector) and the poor performance of the "Comunidade Solidária" ( an organization for community solidarity headed by the First Lady) whose results are either ignored or do not contribute to a satisfactory change in the very bad social conditions in the country.

As a matter of fact, there is no record of change or hope of improvement in our situation regarding income inequalities, one of the worst distributions in the world.

Still on the negative side, it should be mentioned the so called "flexibilization" of the state oil monopoly , in fact its elimination and the attempt to sell Companhia Vale do Rio Doce. As a principle, we have nothing against privatization as long as it is not carried out in the strategic sectors and it is done in a decent way, what includes a fair evaluation. This has not been necessarily so. This does not mean that the enterprises that have undergone privatization are not doing well, we are referring to the sale process and not to their operation after transfer to the private property properly recovered. As in the case of the electric power utilities with updated tariffs.

In the international level it is positive the support and advancement accomplished in Mercosul, counterbalanced by the negative side of almost unconditional alignment with the position of the Western powers under the leadership of the United States, paying a high price for a vote in the Security Council of the United Nations.

The PROER ( program for securing the banking sector) was a special case since on one hand it protected the depositors and maintained financial market stability, on the other hand it caused the transfer of R$ 14 billion (almost the same amount in US$) from the public funds to the banking sector, protecting the insolvent bankers.

The taxing simplification for small and medium enterprises was a good initiative to be followed at the state level. Nevertheless, it was shamelessly used as a political expedient for getting support for the reelection project.

The freezing of the salaries of the public servants during all the administration period and the disastrous program of voluntary dismissal demonstrated the governmental insensitivity in handling such important matter.

The big reforms that supposedly "would guaranty governing conditions" remain to be made. The fiscal, administrative, political and juridical reforms are being delayed by the bill that guaranties reelection at all government levels. If this is not possible, at least for president. The reforms made up to now are characterized by their identification with the dominant ideology; for example: the elimination of the state oil monopoly, the admission of private enterprises (national or foreign) in the natural gas distribution and the admission of foreign ships in internal navigation.

The abuse of Provisory Measures, the National Congress connection with the Federal Government desires, the almost complete domination of information in the major press, the authoritarian decisions, jeopardize the institutional structure of the Nation.

The situation may be very good indeed. While some valves will be capable of dominating the inner pressure of the pan things will go on well. Just like passion, it should be eternal as long as it lasts.

After all, the real Brazil continues to be almost the same. It is sufficient to go to the countryside or walk trough the streets in our big cities and their surroundings. A close examination of the last census will show the traps on the way. For example: the population growth has decreased but the economically active population, the one born twenty years ago, is still high in a period when employment offers are low.

The reforms necessary for the big reversal of this situation have not even been cogitated by those who control power. Only the virtual Brazil has changed. Brazil of the future is a big question mark as well as the world society in this crossing marked by the failure of socialism via the communist experience and the success of capitalism via the neoliberal adventure, this double-edged knife which, after dominating its opponent, may be used to liquidate itself.

 

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