Brazil enters 2017 facing a societal crisis. 60 people recently died in Manaus in the amazon region, in one of the biggest prison massacres of its history. Unfortunately, this bloodbath is just an additional, albeit shocking, example of the weaknesses and failures of the state, as the horrific conditions of Brazilian jails are pointed out. However, an increase in public budgets is not likely to happen in light of the political events that took place in the recent months.
Accused of front-loading funds for social programs and establishing spending budget without the approval of the Brazilian congress, Dilma Rousseff was impeached on August 31, 2016. Though there was apparently no crime of responsibility as opposed to what her detractors affirmed, the democratically elect president of Brazil was replaced by Michel Temer, a member of the Brazilian Democratic Movement Party (PMDB), a center party.
The first concrete measure proposed by the Temer government is the proposition of a Constitutional Amendment that would limit public spending to the amount spent in the previous year adjusted for the inflation. In other words, until inflation is not controlled and economy growth is not back, the government will be obliged to reduce public spending. This expense ceiling will last for 20 years and will impose restrictions on executive, legislative and judiciary power. The reform has been approved by the deputies on October 25 and by the senators on December 13.
The amendment, which detractors call the constitutional amendment « of the end of the World », is a type of economic measure never experienced in history. As a matter of fact, in the European Union, the limit for public spending is associated with the long-term growth rate of GDP, not with inflation. The advocates for the reform affirm that the current external debt exceeds 70% of the GDP and that if the public spending continues to grow, it could reach 132% in 2026. But more than a hazardous economic measure, it is a real threat to Brazil’s young democracy, as the Education and Health budgets are likely to be the first to suffer from these budget cuts.
Henrique Meirelles, the Minister of Finance, said that « this is the way back to the growth of our economy and the creation of jobs that our people need ». Indeed, from 2014 to 2016, the country suffered the worst economic recession in its history, which resulted in a reduction of 4,5% of the size of its economy.
Once again, GDP, Debt, Inflation and Exchange Rates are used as catch-alls to justify austerity reforms. However, economics, especially in the Brazilian context, isn’t just about high growth and low debt. Building a solid welfare state and fighting poverty were primary goals in the country since its (re)democratization in the 1980s. In fact, to be able to limit spending on education and health, the government will have to further modify the constitution itself, symbolizing the social regression this represents. Indeed, the amendment will only apply to these sectors in 2018.
According to the defenders of the reforms, such as Simão Davi Silber, a professor at the University of São Paulo, « more can be done with less: the problem is one of management ».
But although it can be a supplementary incentive to better manage resources, it is hard to believe that this is the measure on which to base the revival of the economy in this context. As Alexandre Garcia (former secretary of state in the 1980s) explains: the situation is already « desperate in health and education » because of lack of funding.
Additionally, economic growth also depends on the societal indicators such as the level of poverty and inequality. Those who benefit the most from free education and health are always the most vulnerable.
Economic modernity is also about allowing social inclusion. In fact, emerging economies that bet on democratic governance seem to be more stable, as, they experience an economic growth that benefits the society as a whole. A threat to democracy is a threat to this very model. As former president of the Argentinian Republic Raul Alfonsin once affirmed: « With democracy you eat, with democracy, you educate, with democracy you heal ».
As a matter of fact, according to the World Bank, from 2001 to 2014, the poverty headcount ratio of the Brazilian population decreased from 24,7% to 7,4%. This means that approximately 30 million people have gone over the national poverty line during that period.
More important than the purely economic debate, it is fundamental to recall that this is a non-democratically elect President, former professor of Constitutional Law, who managed to modify the constitution in order to limit public spending on the 9th world economic power. Moreover, he has himself been recently accused of receiving illegal funding from Odebrecht, a Brazilian firm that has activities in the fields of engineering, construction, chemicals and petrochemicals.
Regardless of the guilt or innocence of both Rousseff and Temer, what is happening is clearly damaging democratic governance. The instrumentation of institutions from political parties has lead people to stop believing in the (democratic) « rules of the game ». The democratic form of political commitment is becoming useless, as the decisions are not taken in the framework of a societal debate, but imposed from the top.
As opposed to the crisis of representation that exists in Europe or North America, this one is threatening democracy itself. This can be seen in the numerous protests and demonstrations as well as strikes in universities across the country. Philip Alston, the UN Special Rapporteur on extreme poverty and human rights affirmed that this reform is a « historic error » and that« a whole generation is threatened ».
In a technical note published on October 7, The Attorney General of the Republic even affirmed that the Constitutional amendment was unconstitutional, because it « offends the independence and autonomy of the legislative and judiciary power […] and, as a consequence, the constitutional principle of separation of powers».
Whether you agree or not on this reform, its purpose and the way it was adopted give clues about the intentions and methods of those who are responsible for the impeachment, and the members of the current Brazilian government. What will happen from now to the 2018 elections is unpredictable, but as the society is increasingly polarized, dramatic events and changes may happen.