The much promoted pioneer of the social-democratic
alternative of the World Social Forum, has, as expected, begun to toe the IMF
line — that too barely a month after coming to power. For all the pro-poor
rhetoric Lula da Silva, now President of Brazil, has launched vicious attacks on
social spending for the poor. The announcements came barely a fortnight after
the third international jamboree of the Word Social Forum, inaugurated by him,
with much fanfare, at Porto Alegere.
As reported in The Economist (Feb.15, 2003), the
Finance Minister of the Workers’ Party (PT) announced the plans of the
new government, on how they plan to contain the fiscal deficit as per the
instructions of the IMF. This plan was presented on the eve of the IMF-review of
the $30 billion IMF loan to Brazil. {Brazil has a bankrupt economy, with the
public debt amounting to $250 billion (60% of GDP) and a foreign debt of $165
billion. As part of the bail out package, the US passed a $30 billion IMF loan
to Brazil in Aug.2002 — on the eve of the elections that brought the PT to power
— which was over and above the previous $15 billion loan already given}
The Plan: a massive hike in the prices of petrol and diesel
to raise revenues; a cut in the increase in the wages of government employees,
resulting in an actual fall in their real wages; a massive cut in social welfare
spending by as much as $3.9 billion over the budgeted figure; the ministry of
cities to lose 85% of its budget; and, worst of all, a drop in expenditure by as
much as 90% on drought relief. Even measured against the previous years
spending by the earlier right-wing government, this so-called left-wing
President, has actually cut real spending on social sectors like health and
education — overall social spending is to fall from 2.4% of GDP in 2002 to 2.2%
in the current year.
On the eve of May Day, Lula came out with another major
‘gift’: he proposed a drastic cut in pensions of retired employees of the public
sector. The proposals are now before the parliament.
So, Lula has, now achieved what the earlier right-wing
government was unable to push through. Under a barrage of hypocritical rhetoric,
and ‘left’ posturing, he is pushing in some of the most rabidly anti-people
measures that could make him a favourite of the IMF. The capitulation is so
complete that has been a result in his own party, with thousands coming out on
the streets in protest.
Those of the World Social Forum and their offshoots like the
Asia Social Forum, Please Note!!!