RN: Brazil, the world suffer with debt


Jan Slakov

Dear RN list,   Jan. 13

Just today the Brazilian currency, the real, was devalued. This is about all
the news that most people in North America, at least, are likely to get
about what financial warfare means for Brazil. But the real news is about
what happens to people and nature when debt payments become impossible.

The news below is very saddening for me. Brazil, a country I have come to
love  for its joyousness, its anti-military tradition, its crazy, ebullient
humour and incredible diversity, is suffering terribly. Would it were not so!

all the best, Jan

P.S. In preparing this message to send to you, I see that César Roberto
Magellan, by quoting the MST motto (MST = Movimento Sem Terra, the famous
peasants' movement in Brazil) has given us some hint of how to work for a
more livable world in the face of these conditions. The motto is: "Organize,
occupy and produce".

Date: Thu, 14 Jan 1999 01:33:47 +1300
From: "janice" <•••@••.•••>
Subject: Debt Forces Cut of Brazil Rainforest

Debt forces cut of Brazil rainforest project 

Debt and the IMF have forced Brazil to effectively abandon a key project to
save the Amazon rainforest. 

Brazil is the world's biggest debtor, owing nearly $180 billion. Last year
there was a huge outflow of speculative capital, and the IMF lent Brazil
more than $40 billion so it could pay its debts and provide the money
demanded by speculators wanting to withdraw capital. 

But the IMF loan was conditional on a stringent austerity programme, with
sharp cuts in government spending. Social services for the poor and
environmental programmes have been particular targets. 

At the 1992 Earth Summit in Rio de Janeiro, rich nations agreed to provide
90% of the funding for a $250 million project to survey the Amazon
rainforest. This is a first step in protecting it from destruction by
loggers, farmers and miners, and to instead exploiting the commercial
potential of its biodiversity. 

But now Brazil has been forced to withdraw its tiny 10% contribution as part
of the IMF imposed cuts. And the donors seem likely to withdraw their share
if Brazil does not pay its part, even if the IMF has imposed the cuts. 

"It is a far more irrational and perverse consequence of the IMF agreement
than even the harshest critics of the IMF could have imagined," commented
Stephan Schwartzman, a senior scientist at the Washington-based
Environmental Defence Fund, quoted in the London Guardian (2 January 1999). 

Meanwhile, it is still not clear if even the IMF loan will be enough to
allow Brazil to keep up payments. The Financial Times (6 January 1999)
reports that one result of the austerity measures is that individual
Brazilian states are now strapped for cash, and are refusing to pay their
debts to the central government. 

Jubilee 2000

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Date: Mon, 11 Jan 1999 13:52:46 -0200
To: •••@••.•••
From: •••@••.••• (R. Magellan)
Subject: Social upheaval in Brazil ?
Cc: •••@••.•••

Hugh Rodwell <•••@••.•••> wrote:

Subject: Social upheaval in Brazil              Sun, 10 Jan 1999 16:36

                "Massive, violent responses to the massive, violent attacks 
on the working class, including some of its traditionally more docile 
sectors, are flaring up everywhere. More evidence from the back of beyond,
forwarded from the Guardian."

There is NO social upheaval in Brazil, nor  "massive, violent responses" 
etc.  ----at least for the time being...     The town mentioned in the 
Guardian report (below) is a very liitle one with no importance whatsoever 
and very far from any big or medium-sized city.  I didn't read anything 
about this riot in the newspapers and didn't heard about it in the radio 
either (well, I'm not used to watch TV).

Much more important than that riot in a remote village has been the 
occupation of one of the Ford car factories by 2,000 workers who were fired 
on Christmas. Their families, including new-born babies, also joined them.  
This action has shaken the moribund trade union movement, now under feeble 
or corrupt leaderships and weakened by the rising unemployment.

Nevertheless, Brazil is slipping down into a Russian-like situation, step by 
step  (and Argentina will follow, due to the close relationship between both 
countries).  Let's enumerate some features of it:

        a) The prevailing interest rate is the world highest in order to 
satisfy both national and international financial capital, what is wrecking 
everybody, including the productive sectors of the bourgeoisie, not to 
mention the Federal Union, States and Municipalities;

        b) Unemployment has continuously been surpassing its historic 
records each new month and knows no age, sex, race, profession, class or 
regional boundaries;

        c) The Minas Gerais State (the 3rd. of Brazil)  has decreed a 
non-negotiated  moratorium of its debts for 90 days (wages excepted) and 
other states may follow, though risking a federal intervention;

        d) Both heavy and light industries have been either closing their 
doors or changing owners  (the president of the Central Bank, Gustavo 
Franco, has stirred the bourgeoisie up at saying that Brazilian companies 
are now quite cheap thanks to the neoliberal policies and so foreign 
investors are invited to buy them at bargain prices);

        e)  The world's largest privatization program it is still in course, 
to the benefit of big capital, both Brazilian and foreign, besides growing 
suspicions of widespread corruption  (surprisingly, FBI has voluntereed to 
cooperate with its Brazilian counterpart on the matter, but its behavior has 
seemed to be of throwing a smoke screen on the facts);

        f) In several places the payments of wages of civil servants are in 
delay of up to 4 months and many private business are ilegally reducing 
salaries and increasing labor journeys and failing to comply with social 
security and labor statutes and agreements  (this is called  
"flexibilization" of labor contracts);  in some cases salaries are being 
paid in merchandises produced by the employing company;

        g) The rate of insolvency and bad debts in the economy (both 
consumer's and corporate's ones) grows each new month and has reached its 
historic peak; 

        h)  The growth of urban slums has sky-rocketed in several big cities 
and now are the new  "homes" of decaying middle class people;  

        i)  The minimum wage was practically frozen at its June, 1994 level, 
despite the rise of prices of the basic staple since then;

        j)  It is not so uncommon that workers with regular jobs (low paid 
ones) sleep in the streets for having no money enough to pay for 
transportation back home;  in the cold times and places some of them frozen 
to death;

        k) 60% of the emergency care in public hospitals in 1998 was 
ascribed to  hungry and malnutrition causes  (hospitals serve meals, after 
all);   etc. etc.

About one year and half ago there were clashes between PM  (the military 
police, an equivalent to the National Guard in USA, controlled by the 
states) and the federal Army in two states because the state soldiers had 
not received wages for more than 3 months and rebelled.   It had never 
happened such a thing in Brazil. 

Though being very calm by now, Brazil may happens to be a political time 
bomb, as Russia already is.  By the way, Brazil's GNP is larger than the 
Russian one (the world's 9th GNP)  and the exposure of US banks and of the 
international financial system in Brazil is very larger than in Russia.  The 
domino effect will be worse if the country crashes, as it will eventually 

While the permanent crisis of global capitalism goes on,  MST (the landless 
movement) has taken the political lead and has been pushing agrarian reform 
ahead through the occupation of idle lands.  "Organize, occupy and produce" 
is its successful motto. 

In solidarity, 

Roberto Magellan

 Paix entre nous, guerre aux tyrans  (....)
 Ouvriers, paysans, nous sommes
 Le grand PARTI DES TRAVAILLEURS.  (L' Internationale)


Civil Servants Riot in Brazil Town

Saturday January 9, 1999  1:00 am

RIO DE JANEIRO, Brazil (AP) - Hundreds of civil
servants demanding back pay rioted in a [town in a]
remote Brazilian town Friday, setting fire to
government buildings and the mayor's home, TV
Globo reported.

Some 500 workers in Sao Paulo de Olivenca,
angry at not being paid for five months, took part
in the violence and forced the mayor to flee, TV
Globo reported. Police from other towns were
called in.

The rioters also invaded a government-owned
farm and killed a number of pigs, TV Globo said.

Sao Paulo de Olivenca is in Amazonas State, 3,200
miles northwest of Rio.