The Brazilian Senate last week voted by a majority of 55 votes to 22 to impeach the President Dilma Rousseff. This marks the end of a long period of relative political stability in Brazil. The economy is in its worst recession since the 1930s. It is in this context that we can understand the recent dramatic shifts and turns in the political situation.
The Brazilian Senate last week voted by a majority of 55 votes to 22 to impeach the President Dilma Rousseff. Michel Temer, the Vice-President, and member of the bourgeois PMDB, is now making preparations to form a new right-wing government. This marks the end of a long period of relative political stability in Brazil. The economy is in its worst recession since the 1930s. It is in this context that we can understand the recent dramatic shifts and turns in the political situation.
Marxists are totally opposed to the impeachment of Dilma, as they understand the class forces that are behind it and why they are doing it. However, our opposition to impeachment in no way implies support for Dilma’s coalition government with bourgeois parties or for her anti-working class austerity measures.
There are two important factors that have driven the big majority of bourgeois politicians in Brazil to move to remove Dilma, one is the serious economic crisis gripping Brazil and the other is the ongoing investigation into 60% of the present MPs in Congress, the Brazilian Parliament. By impeaching Dilma and putting her on trial, they hope to bury the investigations and escape being put on trial themselves. But first let us outline the economic crisis.
The economic crisis
Brazil was not affected in the same way as Europe or North America by the 2007-08 crash. In 2008 growth was 5.1%, which slowed sharply to -0.1% in 2009, and then recovered significantly to 7.5% in 2010. This followed developments in China, where in 2009 there was a significant slowdown in the rate of growth, then on the back of a massive public spending programme and huge pumping of credit, the Chinese economy recovered very quickly. This had the effect of shielding many parts of the world economy from the fallout of the European and North American crises. This explains the continued growth in many Latin American countries, Brazil in particular, who were trading on a big scale with China.
Until recently Brazil was booming, with an average GDP annual growth rate of 3.5 percent between 2000 and 2013, with the high point of 7.5 percent in 2010. This all ended in 2013 when the Brazilian economy came to a sudden halt with growth of only 0.1%, followed by a fall of 3.8% last year, with 2016 expected to produce a further fall of 3.5%.
In September of last year Brazil’s debt was downgraded to the level of junk by Standard & Poor’s, raising fears that Brazil could default. In response to this the government announced a further package of austerity to the tune of $17 billion, on top of what it had already announced earlier in the year. In these conditions the Real fell by 30% against the dollar, fuelling inflation which rocketed to 7.4%. This has been eating away into workers’ real purchasing power. This high level of inflation means the Central Bank cannot ease up on the interest rate, which is what companies would require to facilitate lending and investment. In fact investment has been falling throughout this period. Thus, the only answer the government could come up with was to massively cut public spending and increase taxation, further exacerbating the economic slowdown.
While the economy was booming, the PT government could make some concessions, as could the bosses. The boom allowed the trade union leaders a certain room for manoeuvre as the bosses could afford to make bigger concessions than they would have otherwise been able to afford. With an expanding economy and with the PT in government that could reach deals with the unions, the right wing could tolerate the government, which, however, they never considered their own.
The economic turnaround in the economy has been dramatic. In the Sao Paulo region alone, an area with 40 million inhabitants, over 4000 factories have closed since this crisis erupted, with the announcement of the closure of this or that factory a daily news item. Official unemployment at the beginning of 2014 was 4.8%, but now it has shot up to 10.9% (March 2016) and is expected to continue rising to over 11% by June of this year.
China’s slowdown impacts on Brazil
The connection of the Brazilian economy to China has been like a double edged sword. On the one hand Brazilian exports to a booming China, plus Chinese investment into Brazil, were major contributing factors to Brazilian growth. But the flipside to this was also an opening up of the Brazilian market to cheaper, more competitive Chinese goods. The penetration of Chinese goods into the Brazilian market grew significantly from the mid-2000s onwards, and in some sectors this has led to the closing down of domestic producers with the consequent loss in jobs.
China has also been squeezing Brazilian producers out of their traditional Latin American markets such as Argentina and Chile. This has affected a range of industries and not just low-tech or labour-intensive products, but also high-tech sectors, such as electronic goods, mobile phones, etc.
“The Confederação Nacional da Indústria [the Brazilian bosses’ union] reports that over a quarter of Brazilian firms face competition from Chinese products in the domestic market, and that this rises to over 40% amongst large firms. More than half of Brazilian exporters compete with Chinese products in their export markets.” (Brazilian Manufacturing in the Face of Chinese Competition).
In periods of expansion, even countries with a lower level of labour productivity could find room in the world market for their exports, but in the period of severe global decline, the fittest survive and the others go to the wall. China in 2014 had a 7 percent rate of growth in productivity – it was 9.5 percent average between 2007-2012 – while Brazil only achieved 0.3% in 2014, down from 1.8 percent in 2013. [Source: Productivity B rief 2015]
This poses a huge dilemma for the Brazilian bourgeoisie. If they are to remain within the world market as an exporter of industrial goods they must cut back on the cost of production. For Brazilian capitalists to be more competitive in the world market they need to increase productivity through increased investment and so-called “reforms”, as The Economist has posed it, of “badly needed economic reforms”, by which they mean destroying the gains of the Brazilian working class won in decades of struggle.
China’s rate of investment last year – although beginning to fall – was around 46% of GDP, while in Brazil it was less than 20%. This reveals the weakness of the Brazilian bourgeoisie relative to the Chinese. At this rate the productivity gap between the two countries will increase even further, exacerbating the problems of the Brazilian capitalists.
The problem is that in conditions of declining markets, i.e. falling sales, the incentive to invest is even weaker. Therefore, the Brazilian bourgeoisie are forced to unload the burden of the crisis onto the shoulders of the Brazilian working class, which means attacks on wages, conditions, hours, etc., as well as an attack on the “social wage”, with cuts in spending on healthcare, pensions and education. This in effect means squeezing more out of the working class, extracting more surplus value, with a transfer of wealth from the workers to the capitalists.
This is an important element in understanding the impeachment procedure. Given what the conditions of the world market impose on the Brazilian capitalists, they require a hard-line, right-wing government, which does away with the niceties of negotiating with the trade unions. The bourgeois are on a war footing against the workers of Brazil. They are intent on taking away everything they have conceded in the past. This opens up a period of renewed and intense class struggle in Brazil.
Burying corruption investigations
As we pointed out above, the economic crisis, however, is not the only reason that has pushed the Brazilian bourgeois politicians to move rapidly to remove the PT from office. There is another very good reason: most of them are under investigation for one form of corruption or another in the famous Car Wash (Lava Jato) investigations of the Supreme Court.
Eduardo Cunha, a PMDB MP and Speaker of the Parliament, after facing investigations for corruption, together with many other MPs, had asked the government to put a halt to the investigations, but Dilma could not do this as it would have totally exposed her in the eyes of her own electoral base. Cunha did not make it any easier for Dilma with his constant reactionary outbursts, such as his homophobic statements about gays being part of the “devil’s work”. He is in fact an extreme evangelist reactionary. It was because of Dilma’s refusal to put a halt to the ongoing investigations against corrupt MPs that these reactionaries decided to move against her.
The line of the PT leaders was that a “coup” was being prepared, with the end of democracy, and that everyone should unite against “fascism”, against a return to dictatorship. Dilma’s impeachment was not a “coup d’etat”, as some have claimed. This was merely an attempt of the PT leadership to rally support for the government from within the labour movement. There is no fascism here and no impending end to bourgeois democracy. It is a manoeuvre within the institutions of the bourgeois state, which is seen by the masses as undemocratic. It is the bourgeois freeing itself of the PT in government in a moment in which they thought the collapse of popular support for Dilma would make this easier.
In reality the call for unity against fascism was an attempt to rally forces around the Dilma government and to allow her to continue with her anti-working class austerity measures, a programme that she was not elected on. She stood on one programme and once elected carried out the exact opposite. This exposes the sham of bourgeois democracy: you can promise one thing and then once elected carry out the opposite and the masses have no way of controlling the government.
This explains why the masses were not with Dilma. On March 18th there were up to 400,000 on the streets of Sao Paulo against the so-called “coup”, against impeachment, but those same masses were not supporting the government. March 18th was a reaction against the March 13th right-wing mobilisation for impeachment. It was counter-revolution on the streets provoking the forces of revolution. The anti-impeachment movement reflects a burning hatred of the workers and poor for the right wing, which has been constantly provoking them.
The right wing had the legal “technicalities” to proceed with impeachment. Last year Cunha, using his position as President of the Congress, asked Brazil’s Audit Court (TCU) to look into whether Dilma had “lied” about the 2014 budget deficit, and whether she had used money from state owned banks to cover the deficit, thus hiding how big it actually was.
This is why the right wing bourgeois parties were angry. By fiddling with the deficit figures, Dilma could present the economy as being in a healthier condition than it really was, and she used this in the 2014 presidential election campaign to narrowly defeat Aecio Neves.
The Audit Court declared that Dilma had in fact “lied”, and this gave the Congress the technical excuse which allowed impeachment to proceed. Interestingly, the Supreme Court is investigating whether Dilma actually took bribes from Petrobras, the big state-owned oil company, to fund her election campaign, but will only release its findings later this year. This would be a far more serious issue, but it is not being used in the impeachment proceedings. One is justified in speculating that the reason for this is that the big majority of MPs who voted for impeachment are themselves involved in this kind of corruption, so why lift the lid on this cesspit which might then attract attention to all the other similar cases the MPs are involved in?
The irony of this situation is that the PMDB, Temer’s party, was Dilma’s biggest government ally. Cunha is also of the PMDB. This party was presented by the PT leaders as a “progressive” party that the workers could trust. It shows that the bourgeois have decided they no longer need the services of the PT leaders and now that they have become unpopular, they are accordingly booting them out of office.
The point is that they could have found such a technicality to proceed against Dilma long ago. So why is it that is precisely now that all the bourgeois parties, both in government and in opposition, have decided to move in this direction? There are two very good reasons. One is the recent economic slowdown in Brazil and the other is to cover up a much bigger and more important corruption scandal that involves around 60% of the present MPs who sit in the Congress.
Thus, as Dilma could not play their game of covering up the corruption investigations against them, they have moved for very good personal reasons, to save their own political careers, in an attempt to cut some deal that will eventually bury the whole investigation.
Dilma’s and Lula’s growing unpopularity
What has added to the resolve of the right wing to remove Dilma has been her massive collapse in popular support, which ironically is due to her attempt to meet the demands of the bosses by imposing austerity.
In her 2014 election campaign Dilma, with the help of Lula, had tacked left, donning red T-shirts, and raising a left rhetoric against the right wing. To win the second round in October 2014 the PT leaders presented a left face, coming out against privatisations and so on. They claimed jobs, wages and social benefits were under threat if the right wing were to win the elections.
But once elected – with a slim majority – Dilma moved very quickly to implement austerity and carried out precisely what she had warned the right wing would do! Dilma started applying the programme of the bourgeoisie. She brought open representatives of the bourgeois into the government, such as Levi, a Bank director.
Impeachment is therefore not a move against “a Left government” acting in the interests of the working class. Dilma was already carrying out austerity. Last year she explained the need for a generalised belt-tightening. The budget deficit had reached 6.75% of GDP, doubling on the previous year, and she explained the need for cuts in public spending and that, “we must divide part of this effort between all sections of society.” In reality, this meant making the workers and poor pay.
Within just a fortnight of being elected – in October 2014 – she did a 180 degree turn and popular support for the government collapsed. According to the polling agency Datafolha, Dilma’s approval rating fell from 42% in December 2014 to 23% in March 2015, and the most recent popularity rating (March of this year) put her at a mere 11%.
While Dilma was announcing the need for austerity, a Supreme Court justice published the names of politicians to be investigated in connection with a huge bribery scheme at Petrobras, including many MPs and Senators, most of them connected to the government. This was also to involve Lula directly, who was caught in the corruption scandals.
The truth is that there was no real legal case against Lula in terms of direct involvement in corruption, but a judge went to the press, making statements on the case, and also had CEOs and other important company leaders arrested, and then offered them a deal that if they collaborated – i.e. if they accused the right people – they would get lower sentences. So they made confessions involving Lula. It was an absolute scandal in terms of due legal procedure, even from a bourgeois point of view.
Thus, in March of this year, Lula was taken into custody in a dramatic manner for questioning rather than being summoned, which would have been the standard procedure. Lula had, however, sought to be nominated minister by Dilma as a legal means of avoiding investigation. This gave the impression he did have something to hide and that he was using this as a ruse to escape justice.
It is worth noting, however, whether he has accepted bribes directly or not, that since Lula left office in 2011 he has made at least $20million in “conference fees”, in the same manner as Bill Clinton and Tony Blair who, once out of office, went around the world giving speeches in exchange for hundreds of thousands of dollars in fees. This is a “legal” means by which the bourgeois pay for services rendered by these politicians. It means Lula has accumulated huge personal wealth on the back of the movement of the Brazilian workers who built the PT from nothing out of the powerful movement of the engineering workers in the late 1970s. In these conditions, Lula’s popularity was also dented, although now that the right wing have manoeuvred so blatantly against the PT, Lula could be brought back in at a later stage and used in future attempt to calm the movement of revolt from below.
Background to the present scenario
This is the background to the impeachment proceedings. It was in conditions of a sudden sharp economic downturn and the falling popularity of Dilma, in early 2015 that the push for impeachment began. This was just a few months after her election victory. The first indication of how things were going to pan out for Dilma came on February 1st of last year when Eduardo Cunha defeated the PT’s candidate for President of the Congress.
This was still in the early stages and the main bourgeois party, the PSDB was not yet campaigning for impeachment. Their position was to wear down Dilma up to the 2018 elections and then go for an electoral victory of the right wing, which would have legitimised in parliamentary terms the formation of a right-wing government. They were thinking of a Venezuelan scenario, where eventually the right wing could “legitimately” win the elections.
This was in line with the position of the imperialist powers and also reflected the views of the more intelligent and farsighted section of the Brazilian bourgeoisie. The imperialists were concerned that impeachment could unleash forces from below. This has been confirmed by the widespread student movements that have been taking place before, during and since the April 17th vote. There have been protests in Sao Paulo of up to 20,000 and in Rio de Janeiro 100 schools were occupied by students, teachers and parents. In Sao Paulo during demonstrations eggs were thrown at the PSDB governor Geraldo Alckmin, an individual who is also connected to the arch-reactionary Catholic Opus Dei.
In the period between April and September of last year, the bank owners were also against impeachment, as were the industrialists in important cities like Sao Paulo and Rio de Janeiro, as they considered it “irresponsible”. However, things changed very quickly as Brazil’s economic crisis worsened, forcing the bosses to prepare for a serious offensive against the working class.
The fact is that the Brazilian bourgeoisie had lost control of their own political representatives, their MPs and parties. But eventually the Brazilian bourgeoisie was also forced to come down on the side of impeachment, although the imperialists through their mouthpieces such as the Financial Times, The Washington Post and so on continued to oppose impeachment and were very critical of the Brazilian politicians. They see impeachment and removing the present government as provoking the masses, taking away any legitimacy from any future government of the right wing, and raising forces from below.
In the meantime, the economic crisis continued to worsen, and the right wing came out blaming Dilma. This is the worst recession in Brazil since the 1930s. This further strengthened their resolve to go for impeachment. More and more right-wing politicians started to push for impeachment, for example Aecio Neves, the PSDB candidate in the 2014 presidential elections.
By the middle of 2015 street protests began to be promoted and organised by the right wing, through their control of the media. A big media campaign was launched about “corruption” and then the PSDB MPs also started shifting in favour of impeachment, and by September/October the whole party had shifted fully in favour. The official impeachment process thus began in December 2015.
It is important to pose the question: what layers of society are supporting impeachment? Those on the pro-impeachment demonstrations were mainly the base of the right-wing parties, middle class layers, extreme right-wing elements and so on. The social composition of the right-wing demonstrations was highlighted by polls carried out which revealed that less than 5% of participants earned less than five times the minimum wage.
The mood among the working class, on the other hand, was revealed in San Bernardo, a traditional metalworking industrial heartland, in the Volkswagen, Ford, General Motors, FIAT and other plants. In the workers’ assemblies two resolutions were put to the vote, one against impeachment and loss of democratic rights, which got unanimous support, and another in defence of the Dilma government, which was booed and whistled down. Not one factory assembly came out in support of the government. This confirms the correctness of the stance of the Marxists of the Esquerda Marxists in opposing impeachment while not giving any support to the government.
This stance of the workers can easily be explained if one remembers that Dilma had been cutting unemployment benefit, attacking pensions – increasing massively the number of years a worker has to work in order to be entitled to a pension – and cutting back on social security and healthcare!
Impeachment proceeds
On April 17 the Congress voted by a big majority to impeach the sitting president Dilma Rousseff. The proceedings were orchestrated by Eduardo Cunha, the President [Speaker] of the Congress, an extremely corrupt politician. Prosecutors leading the Lava Jato (Car Wash) investigation into a huge bribery scheme at state-oil company Petrobras claim they have proof that Cunha had secret Swiss bank accounts to hide away large sums of money he had received in bribes.
Not long after the vote to impeach Dilma in the Congress, on May 4th, Brazil’s Supreme Court then suspended Cunha from his position as he is charged with “corruption, intimidation of lawmakers, obstruction of justice and abuse of power”. What is to be noted here is the role of the Judiciary throughout this whole process. They could have removed Cunha long ago, but they decided to leave him in place until he had pushed through impeachment in the Congress.
Cunha was then replaced by the deputy Speaker Waldir Maranhão who is also under investigation by the Supreme Court for money laundering and taking bribes, and being involved in the Petrobras scandal. Maranhão belongs to that minority of bourgeois politicians who came out against impeachment. He had ignored his own party line when he voted on 17 April against impeachment. This underlines the divisions that exist within the ruling class of Brazil.
On Monday, May 9th, Maranhão announced the annulment of the April 17th impeachment vote arguing there had been irregularities during the voting procedure. This sent Brazilian markets into a panic, with the Real falling by 4.6% on the day, and the Ibovespa stock benchmark falling by as much as 3.5%. This revealed that investors – or rather speculators – want to see the PT out of office as soon as is humanly possible, and any delay in the impeachment process could jeopardise this! Brazilian media began reporting that Maranhão had been pressurised by his centre-right Progressive Party, claiming that it had threatened to expel him if he did not revoke Monday’s annulment of the April 17th vote. Maranhao then did another about turn and revoked the previous annulment, all without explaining why!
In a last minute attempt to stave off impeachment, Dilma turned to the Supreme Court on Tuesday – again trying to involve the Judiciary – calling on it to block the scheduled Senate vote, but although the Attorney general had called on the Court to annul impeachment, it refused to do so and upheld the parliamentary proceedings, leaving the road to impeachment open.
Dilma will now be suspended while her trial proceeds and her deputy, Vice-President Michel Temer will take over as acting president, who will also nominate his own government. Opinion polls have shown that if Michel Temer were to stand in elections only 2% of the population would vote for him. He is a man of the super-rich and is hated by the mass of workers and poor in Brazil. The removal of Dilma, in spite of her widespread unpopularity, will be seen as completely illegitimate, and any government led by Temer will be seen as not having the democratic mandate of the people.
This is a very dangerous position for the bourgeois, and explains also the divisions among them. The economic situation requires stringent austerity measures, far worse than anything that has been introduced so far. In such a situation they require a government with the authority to proceed without unleashing class conflict from below. The advantages of the PT in government was its ability to hold back the working class, but in the recent period it had lost the authority it had within the wider layers of workers and poor. To have a government that is perceived by the working masses and poor as being illegitimate will make it far more difficult for the ruling class to proceed as it wishes.
This explains also the conflict between a wing of the Brazilian ruling class and the imperialist bourgeoisie which has been consistently against impeachment. The imperialists understand the powerful forces that could be unleashed from below, of the workers, the youth, the unemployed, the homeless, the landless peasants, once they perceive the government in office not be “legitimate”. This also highlights the fact that while Brazil remains an economy dominated by the major imperialist powers, it also has a local bourgeoisie – albeit a very corrupt one – which has its own particular interests. And this conflict of interests is an important element in understanding Brazilian politics today.
Something moving on the left
So what we have is a PT in long term decline, as the popularity ratings reveal. Many workers and youth are disgusted by what it has done in government. The party that was to defend them has turned on its own social base. This explains the present weakening of the PT both in terms of its active membership and its wider support within the working class.
The tragedy of all this is also that the trade union CUT leaders have not mobilised the workers. They have been collaborating with the government. The Congress vote to impeach Dilma in April pushed them – together with the PT leaders – to raise the idea of organising Workers’ Assemblies on May Day, but they then pulled back and preferred to go for rallies that were more like festivals and concerts.
Lula himself has been actively working to demobilise the anti-impeachment movement and has been particularly concerned about worker mobilisations. His line, and that of the PT tops, is one of conciliatory class collaboration and not class struggle. And they continue with this policy even when the bourgeois go for them personally!
It is clear that the workers and youth of Brazil are drawing conclusions from all the recent events. Brazilian capitalism is in crisis and is attacking the working class. The reformist leaders not only have failed to stop this, but have actually been instrumental in carrying out the attacks. Now they are discredited and the bourgeoisie is looking for another means of governing the country.
In these conditions we will see the bourgeois attempt to use the openly right-wing parties, some of them with direct links to the military dictatorship that came to power in 1964. This, however, will produce an equal and opposite reaction to the left, with worker and student protests erupting all over the country. Already yesterday, we some huge mobilisations, particularly of the youth, which are a taste of what is to come.
This opens room to the left of the PT, with widespread radicalisation taking place among workers and youth. But what force can fill the vacuum? At the moment the one party that has the potential to fill it is the PSOL, a left-wing breakaway from the PT, which in recent years has won some reasonable results such as the 28.15%, won by the PSOL candidate in Rio de Janeiro in 2012. The PSOL currently has five federal deputies. The Esquerda Marxista, the IMT in Brazil, is committed to strengthening the PSOL as a left alternative to the PT in decline. This can only be done by convincing the PSOL as a whole of the need for a total break with capitalism.
Greece shows how a small party on the left can be suddenly catapulted into becoming the main party of the working class. This is what happened with Syriza. But Greece also shows what can happen when such a party in government attempts to run the system, rather than abolish it. The bourgeois will prepare traps for the PSOL, which it must avoid at all costs. That is what the Marxists will be explaining patiently within its ranks.
This is the beginning of a new period, a new process that will see a sharp turn to the left of the most advanced layers, a situation in which the ideas of Marxism can gain an echo within the working class and youth. The comrades of the IMT in Brazil, the Esquerda Marxista are intervening in these events with their banners, slogans, leaflets and journals, taking the ideas of Marxism into the movement. When the situation changes so sharply, ideas that in the past struggled to make headway within the labour and youth movements, will now become very relevant and a powerful Marxist force can be forged in these conditions.
Published on In Defence of Marxism
