Economy & Trade, Headlines, Human Rights, Labour, Latin America & the Caribbean

BRAZIL: Multiple Social Demands Crossed with Financial Instability

Mario Osava

RIO DE JANEIRO, May 10 2004 (IPS) - Public employees in Brazil launched a strike Monday, stepping up their social demands on a government whose purse strings have been tightened by fiscal adjustments and which is faced with another episode of financial instability.

Initial strike participation of the 490,000 national government employees was a disappointing 20 to 25 percent, admitted Elano Furtado, a leader of the federal workers union confederation, CONDSEF, in a conversation with IPS.

But more are expected to stop working in the next few days, as the first day of the strike was dedicated to holding assembly meetings, he said.

The movement is demanding wage hikes of 50 percent, rejecting the government’s proposal of 12 to 32 percent increases, varying according to the agencies where they work and the qualifications of each employee.

Public sector retirees, meanwhile, are seeking 9.5 to 19.4 percent increases in their pensions.

The strikers demand "parity" in the increase for the retirees "who built this country and public service," said Furtado.

The government could withdraw its offer if the employee unions do not accept it before May 21, threatened Planning Minister Guido Mantega, who said it is "the best possible" given the federal government’s budget limits, and that it reflects increases beyond last year’s inflation, which reached 9.3 percent.

These are the same sort of threats that governments always make, commented Furtado, noting that public employees have been demanding compensation for the buying power they have lost as a result of inflation since 1998. They have not received a pay raise in that time.

Last year there were no strikes to demand salary hikes because it was understood that the current government of President Luiz Inácio Lula da Silva, of the leftist Workers Party (PT), inherited a federal budget set by his predecessor.

But not this year, said the union leader: "We’ve run out of patience."

Furthermore, what the government is offering is not an increase of base pay, but rather the "extras" and benefits, which can be cancelled at any moment and are not protected by the constitutional guarantees against salary cuts, Furtado stressed.

In addition to the pressure from public employees, some of which have been engaged in some form of work stoppage since last month – like the federal police – the government faces other mobilisations that have emerged around a variety of demands.

Early Monday, some 400 peasant farmers, dissidents from the Landless Workers Movement (MST – Movimento dos Sem Terra), invaded the offices of the National Institute for Colonisation and Agrarian Reform (INCRA), which they occupied for several hours to demand immediate allocations of land to settle and more credits for the farming sector.

Since late March, an offensive led by the MST and other rural organisations has prompted the occupation of more than 100 plots of farmland as well as numerous marches for agrarian reform and against violence in the countryside. It was dubbed "Red April" by its leaders, invoking the image of the MST’s trademark red flags.

Agrarian reform, one of the emblematic issues of the governing Workers Party, is advancing only very slowly. Lula promised to settle 400,000 families on land to farm by the end of his term in 2006, but his administration so far has helped just 10 percent of that total since he took office on Jan. 1, 2003.

Indigenous communities have also stepped up their demands in the past month. On Monday, more than 20 Indian leaders met with Lula to outline their requests for greater protection of their lands, which have been invaded repeatedly by ‘garimpeiros’ (informal miners), loggers and colonisers.

Conflicts over indigenous lands made headlines when 29 garimpeiros were killed by members of the "Cinta-larga" tribe, who live in the northwestern state of Rondonia. The Indians said the miners had invaded their lands to set up illegal diamond mining operations.

Another demand is the official demarcation of the Raposa Serra do Sol reserve, in the northern state of Roraima, which was approved six years ago, but has been put off repeatedly, awaiting presidential confirmation.

Lula promised after he won the October 2002 elections to make the demarcation official, but he has hesitated under pressure from the rice growers who live within the indigenous territory and who would have to be compensated and settled in other areas.

Attending to those demands requires public expenditures, which are limited by the government decision to achieve a primary fiscal surplus this year of 4.25 percent of gross domestic product, a goal that even surpasses the percentage agreed with the International Monetary Fund.

Also raising the ire of the government employees and of the general public was the announcement, on the eve of May 1, International Labour Day, that the new national minimum wage would be 260 reais (82.8 dollars), an increase of just 8.3 percent in order to maintain fiscal balance.

The minimum monthly wage is also what 13 million public sector retirees receive as their pensions.

Aggravating the government’s difficulties is the fact that Brazil’s financial markets have entered another period of instability, complicating the kick-start of the economy that Lula has promised since mid-2003.

The national currency, the real, suffered a 2.54-percent devaluation on Monday, accumulating a seven percent decline in one week, while the Sao Paulo Stock Exchange fell 5.23 percent Monday, and Brazil’s "country risk" rating rose to 800 points after having fallen below 500 at the beginning of the year.