In Brazil, public spending will be frozen for 20 years
14 December 2016
The Brazilian Senate approved on Tuesday, December 13, an amendment to the Constitution that freezes the public budget of the national government, including the health and education sectors, for the next 20 years. PEC 55, as it is known, received the favorable vote of 53 senators, while 16 voted against. In a first-round vote, the proposal had received 61 votes in favor and 14 votes against.
The measure determines that the increase in annual public spending will be limited to the rate of inflation of the previous year. Which means that this expenditure will not increase in real values, and, considering the population growth in the same period, in reality the PEC will mean cuts in social investments, once there will be a greater number of people depending on the public services.
“PEC 55 is the most serious setback in terms of social rights since the promulgation of the 1988 Constitution, a document that guarantees the right to health and education, among others, as fundamental. Unfortunately, if this measure is not reversed, the scenario for the next two decades is disastrous: chaos will be installed in the public health and education systems, while the privatization of the sector will be increased. The most affected will be the poorest, who will not be able to pay for these services in the private sector and will not have at their disposal quality public attention", says Jocelio Drummond, Regional Secretary of Public Services International (PSI) Interamericas.
In a recent statement to the press, Senator Paulo Paim of the PT, the party of the dismissed president Dilma Rousseff, called attention to the fact that the UN estimates an increase of 21 million people in the Brazilian population between 2015 and 2030.
“If public spending is limited in the next 20 years, until 2036, how can the population be given more education and more health with fewer resources? If there will be no state investments, how can more jobs be generated?", he asked.
The minimum wage, whose real increase was one of the instruments used by the Lula and Dilma administrations to raise workers' incomes, can not have a real increase, but only according to the inflation of the previous period.
The new measure will start to be implemented from 2017, with the exception of health and education areas, whose changes are valid as of 2018. The public spending ceiling can only be revised after ten years.
The amendment to the Constitution was approved only 8 days after the government of Michel Temer presented his proposal for reform of the pension system, which receives harsh criticism for punishing the poorest sectors of the population. PEC 55 has also been rejected by social movements, trade union organizations and many other sectors of society. According to a survey released on December 11, 60 percent of Brazilians are opposed to the measure.
On the same day of the amendment approval in the Senate, protests occurred in several cities of Brazil. In São Paulo, the building of the Federation of Industries of the State of São Paulo (Fiesp), one of the main promoters of the dismissal of Dilma Rousseff, had part of its glass broken. In the capital Brasília, the Military Police strongly repressed the demonstrators; more than 70 were detained. Strong repression, with injuries and detainees, had already occurred on November 29 in the same city.
In October, the Brazilian Association for Collective Health (Abrasco) issued an open letter against the amendment, warning that the Brazilian Unified Health System (SUS) "needs to move forward, not be cut and reduced". Across the country, students engage in public school occupations against the measure.
Also in October, a group of Brazilian economists launched the study "Austerity and Setback", in which they question the arguments favorable to PEC 55. According to the document, the amendment will not promote economic growth, will affect social programs that benefit the most vulnerable sectors of the population, will aggravate the economic crisis, will weaken the domestic market, will not balance the accounts and will have as a consequence the dismantling of the Brazilian state.
On 9 December, Philip Alston, UN Special Rapporteur on extreme poverty and human rights, released a press release about PEC 55:
“One thing is certain. It is completely inappropriate to freeze only social expenditure and to tie the hands of all future governments for another two decades. If this amendment is adopted it will place Brazil in a socially retrogressive category all of its own.”
In the opinion of Jocelio Drummond, from PSI, both the approval of PEC 55 and the proposal for reform of the pension system are part of the context of the dismissal of President Dilma Rousseff in August 2016:
“It is no coincidence that an unelected government - which rose to power after an illegitimate process of removal of the former president, and whose cabinet is composed entirely of white men - has adopted a platform of measures that surely would not receive the endorsement of the Brazilian population at the polls.
Although the elected President Dilma Rousseff was implementing measures criticized by progressive sectors, in terms of economic policy and withdrawal of rights, the institutional coup against her paved the way for the radical implementation of the withdrawal of constitutional rights and the adoption of a tough adjustment which will punish the poorest and benefit the financial system. This recipe was already adopted in the 1990s and was disastrous for Brazilian people, who suffered from unemployment, the loss of purchasing power and the poor quality of public services.”