No sooner had the pensions reform bill cleared a second vote in the lower chamber of congress than President Lula da Silva was proclaiming victory on a broad front. `We have done everything necessary,' he said in a recorded 11-minute broadcast on 14 August, `to return to the path of growth.' Inflation, he said, has been defeated: henceforth the new phase of his economic plan envisages a progressive reduction of interest rates [analysts have been gambling on a 1.5-point cut this week]. Lula also highlighted the increase in exports to India, China, South Africa and Russia, and the `political and economic opening' he himself had achieved with his visits to 12 countries since he took office just under eight months ago.
A hint of what else might come in the `new phase' was provided by planning minister Guido Mantega. Only days after the government announced that it was planning public works worth R$191bn (US$63.6bn) for 2004-07, he said the total could well be higher than that - though part of the sum is expected to come from the private sector. A list of priority projects is expected this week.
The emphasis of the `new phase' is on a slow but steady pace. `The government,' Lula said, `has its timeframe and its deadlines [...] Magical economic plans do not work.' The same goes for those like the movement of landless peasants, MST, who are pressing for a speedier agrarian reform. `That cannot be done overnight,' he said, adding. `Radicalisation does not benefit anyone.' In a firmer tone, he told the MST, `I will not allow confrontation, nor will I bow [to pressure].'
Costly victory
If the movement forward on the pensions reform was a victory, it was a costly one. The last vote won by the government, thanks to the support given by the opposition Partido da Frente Liberal (PFL) and Partido da Social Democracia Brasileira (PSDB), was one taken in committee the same day of Lula's address, which cost further climbdowns from the original proposals - the most significant being a lower reduction of top-of-the-scale pensions (30% instead of 50%). There was some comfort to be found in a formal assurance from both the PFL and the PSDB that no further demands for changes would be forthcoming.
The pensions reform bill now goes to the senate, where it must clear two votes before returning to the lower chamber for final approval.
One victory of sorts was not mentioned by Lula: the one that seems to be looming over the striking public-sector employees. As the reform bill cleared its first obstacles, and some of the strikers' demands were met, people began to ponder the wisdom of sacrificing more pay for the sake of the remaining, probably unattainable, demands. By the weekend, observance of the strike was down to an estimated 60%. This, too, has been a costly confrontation: the standstill in the customs is reckoned to have halted exports of machinery and equipment valued at about US$2.7bn.
It should be noted that not all the strike organisers are about to give up just yet. Gilberto Cordeiro Gomes, secretary-general of Condsef, the confederation of federal public servants, reluctantly admits that the strike is losing strength. On the other hand, José Domingues Godoi Filho, the university teachers' leader who is also director of the umbrella confederation of public-sector unions, sees some hope in the successive concessions made by the government. `That lack of coherence,' he says, `strengthens our confidence that we might yet achieve our objectives.' He claims that while some strikers have been returning to work, others - like the customs inspectors - show no sign of wavering.
MST: evictions will backfire
Lula has failed to persuade the MST to retreat. Rather, the response has been more fighting talk from leaders of the movement. Valmir Ulisses Sebastião, active in São Paulo, says that that state's campaign to disperse all MST holding camps in the Pontal do Parapanema area is going to backfire: evicted from the camps, he says, the peasants will have no choice but to start `invading' fazendas in the area (ostensibly, they are waiting in the camps for the government to distribute land to them). Directing the campaign, based on arguments such as the health hazards posed by the camps, and the absence of schooling facilities for the children, is the state's justice minister, Alexandre de Moraes.
He has already obtained court orders to close down two camps, holding about 300 families - of the 3,900 the MST claims to have concentrated in the area. The MST is appealing.
Growth data: Tracking Trends, page 9.
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