Brazil: behind the Olympics

Submitted by Matthew on 10 August, 2016 - 2:02 Author: Martin Thomas

On the day of the Olympic opening ceremony, 5 August, a demonstration against interim president Michael Temer closed off a main street in Rio de Janeiro.

With banners from the CUT union federation, the Workers' Party (PT, which governed Brazil from 2002 until the "impeachment" of president Dilma Rousseff on 12 May 2016), the left parties PSOL and PSTU, and from Brazil's two Communist Parties, PCB and PCdoB, the 15,000 demonstrators demanded "Temer Out" and condemned Temer, installed after the "impeachment", as a "putschist".

The Olympic organisers set the background music and sound effects to go louder when Temer appeared at the opening, and to keep his appearance as brief as possible, to minimise media coverage of the audience booing him.

Discontent with established authorities spreads much wider than the left. The right-wing parties have been able to push through the "impeachment" coup, and may be able to consolidate it by a Senate vote later this month, only by surfing on that wide discontent. They presented the "impeachment" as a move against corruption, but it is widely known that the right-wing parties are more corrupt than the PT.

In the first month after becoming interim president, Temer lost three of his ministers to corruption charges. 66% of Brazilians tell opinion polls that they do not trust his administration. Preparations for the Olympics have been dogged by scandal and budget shortages. In July protests by public service workers over unpaid wages pushed the state of Rio to declare a state of "public calamity".

The Medico-Legal Institute refused to accept more bodies for autopsies. 63% of Brazilians tell opinion polls that the Olympics will cause more problems than benefits for the Brazilian people, and 51% say they are "not interested" in the Games. As the Olympic flame arrived on 3 August, police used stun grenades, pepper spray, and tear gas to disperse protesters, and 450 heavily armed police invaded an area near the international airport to make arrests. The mayor of Rio city was reduced to claiming that people will see the Olympics positively in years to come. "There is not a bad vibe around the Olympics. There is a generalized bad vibe in Brazil. There's economic crisis, unemployment, inflation, political crisis, impeachment, political divide".

One of Temer's first acts in office was to reset the budget with lower deficit targets. He wants to delete the 1988 constitution's guarantees that welfare benefits must rise in line with inflation. He has also said that he will consider selling the airports in São Paulo and Rio to help to reduce the deficit. He chose a soybean tycoon who has deforested large tracts of the Amazon as agriculture minister. And he is the first leader in decades to have no women in his cabinet at all.

But Temer is weakly placed. Opinion polls for the next presidential election, due in 2018, show PT leader Lula Inacio da Silva, who was president 2002-2010, in the lead, and the right-wing PSDB doing badly. Temer's PMDB is unlikely to run a presidential candidate. In the presidential polls the main rival to the PT is the Rede Sustentabilidade of Marina Silva, a former PT government minister who has become a Pentecostal Christian and right-wing on issues like abortion and same-sex marriage, and who backed the right-wing PSDB in the 2014 presidential run-off, but is still pro-environment. Municipal elections are also coming in October.

The background to the chaos is a severe and continuing economic slump. Brazil's economy grew fast from about 2000 to about 2011. It slumped in 2009, like almost everywhere else, but recovered fast. Journalists talked about it as one of the foremost "emerging economies", the "BRICS". But since late 2013 it has slumped. The previous expansion was, as economist José Gabriel Palma puts it, "the world’s most overrated boom".

Up to the "debt crisis" of the early 1980s, Brazil, once primarily a plantation and mining economy, industrialised. Manufacturing industry rose from 20% of GDP in 1947 to 36% in 1985; by the early 1990s, 60% of Brazil's exports were of manufactured goods, including high-value ones like light aircraft. The recovery of 2000-11 was shallow, and based on exports of soybeans and iron ore to China. Manufacturing continued a decline which had started in 1985, falling to just 13% of GDP in 2013. Brazil's average labour productivity had risen from 20% of the USA's in 1960 to 27% in 1980.

It was down to 19% in 2010, and lagged especially in manufacturing. After 2012, China reduced its imports. Their prices also slumped. Brazilian corporations got trapped by spiralling debt from loans made from metropolitan banks which were stuffed full of cheap credit by "quantitative easing" and saw poor prospects in their homelands. The PT administrations, alone or almost alone among governments worldwide choosing to operate within neoliberal constraints, significantly reduced social inequality. Brazil was for centuries a country of large landed estates and plantations. Slavery was abolished there only in 1888. Inequality remains much higher than in Europe. And along the way the PT sacrificed its rank-and-file militancy to government-managing constraints, first in municipalities and states, then in the federal government.

It was founded in the last years of the 1965-85 military dictatorship, as a big, lively, revolutionary socialist party closely linked to a rising militant trade union movement. But over the years, left-wingers were pushed out; life and democracy were stifled. When the slump came in 2013, the PT was unable to produce government policies to deal with it other than the most orthodox neoliberal austerity; and when the right wing managed to channel some of the ambient discontent into a movement for impeachment, the PT lacked the structures and activist base to fight back. The Brazilian left needs to regroup.