DEVELOPMENT-BRAZIL: Church, Leftist Groups Challenge Foreign Debt

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Sep 8 2000 (IPS) - The Brazilian Catholic Church, labour unions and leftist political parties are attempting to mobilise the population behind demands for transparency in handling the nation’s external debt and for designating more public resources for social programmes.

An informal referendum, promoted by the National Bishops’ Conference of Brazil, concluded Thursday, Brazil’s Independence Day. Organisers asked citizens if the government should maintain its agreement with the International Monetary Fund (IMF) and continue making payments on its external and internal debts.

Beginning Sep 2, the public could place votes in any of the 50,000 ballot boxes distributed among 3,000 of Brazil’s 5,500 municipalities. The result of the vote will be announced next Wednesday.

Undoubtedly, the “no” vote was the runaway winner for all three questions on the ballot, as the voters were largely those who wanted to express their rejection of the government’s policy to continue paying off the debt.

The response to the first point expresses the public’s rebuff of the IMF, whose economic recommendations, adopted by the Brazilian government, are interpreted by the referendum organisers as one of the leading causes behind rising poverty and deepening social inequalities.

The second question asks if the nation’s foreign debt should continue to be paid “without the audit established by the 1998 Constitution,” and, lastly, the ballot asks if the voters agree that a major portion of the public budget should go to paying the internal debt held by “the speculators.”

The conclusion of the vote coincided Thursday with the “Cry of the Excluded,” another Catholic Church initiative dating back to 1995 that is observed on the anniversary of the country’s independence.

The “Cry” included demonstrations throughout the country, involving numerous social organisations, such as the Movimento dos Sem Terra (MST- landless movement) and the nation’s largest labour union.

The central event brought 85,000 people to the village of Aparecida, 170 km from Sao Paulo, and a traditional destination for Catholic pilgrimages. The local archbishop, cardinal Aloisio Lorscheider, stressed that Thursday was not a day of celebration because Brazil still does not have its independence, especially in the economic sphere.

Joacyr Braido, co-ordinator of the National Bishops Conference’s social division, emphasised that the referendum organisers demand a “responsible attitude” toward the nation’s debt, and not necessarily a suspension of payments.

What they want is transparency, he said, they want the authorities to explain how they accumulated a foreign debt of more than 230 billion dollars and where that money went.

The president of the episcopal conference, Jaime Chemello, considered to be a progressive-minded bishop, asked the nation’s President Fernando Henrique Cardoso in a meeting last week for a public hearing on the foreign debt issue even if it is impossible to cut back on payments.

Since 1995, Brazil has paid approximately 128 billion dollars in debt service payments, enough money to build 15 million low- income homes, according to economist Reinaldo Goncalves, of the Federal University of Rio de Janeiro.

Or, as another option, that sum could finance an agrarian reform to resettle 5.8 million rural families, thus eradicating the problem of landless peasants, Goncalves said.

Finance minister Pedro Malán said the new anti-debt campaign is “foolishness.” The issue was a top agenda item for the government and public opinion in the 1980s, but he believes it has been “resolved,” as it has received little attention over the last decade.

Economic authorities point out that the majority of the foreign debt today falls to the private sector, unlike 18 years ago, when Latin America began what is known as its “lost decade.”

Any type of unilateral measure in this area could trigger capital flight, and capital is necessary for the country’s development, say government officials and economists who are not aligned with the left-leaning political forces.

As far as the internal debt, they argue, it is the high interest rates the government pays that feed the fiscal imbalance, preventing greater public investment in social initiatives to reduce poverty and inequality.

The “Cry” has expanded to other nations of the Americas, and included a series of actions by the Continental Social Alliance, a World Women’s March that is to arrive in New York Oct 15, and South Jubilee 2000, which promotes tribunals against the foreign debt in various countries.

The mobilisation is slated to conclude with a continental event Oct 12 at the United Nations headquarters in New York, with the participation of national and regional groups, including the Latin American Association of Rural Organisations and the Continental Federation of Community Groups.