DATELINE: BRAZIL

A troubled nation under economic siege

Moyra Ashford November 21 1983
DATELINE: BRAZIL

A troubled nation under economic siege

Moyra Ashford November 21 1983

A troubled nation under economic siege

DATELINE: BRAZIL

Moyra Ashford

Angry workers’ march (above); poverty victims (below): riots, food protests, lootings and mass demonstrations

After 15 years of working for a São Paulo home appliance manufacturer, pattern maker Waldomio Vesco, 46, lost his $750 (U.S.)-a-month job in March when the company curtailed its operations. Since he could not find work at a comparable salary, in May Vesco opened a small general store selling food and household goods in Villa Espanhola, a working-class suburb of São Paulo. But after eight months of losses, Vesco is job hunting again and plans to sell his store if he finds work. In a nation of 130 million, where an estimated 35 per cent of the working-age population in urban centres is either unemployed or underemployed, Vesco is not alone in the company of misery.

Recently, a series of strikes and protests by angry metalworkers, oil refinery workers and Brazilians out of work has rocked the country. Last month Brazil sidestepped pressure from anxious International Monetary Fund bankers and introduced less stringent austerity measures than those recommended by the IMF.

Brazil now has all the characteristics of a nation under siege. The intoxicat-

ing “economic miracle” of the 1960s and early 1970s, when the country’s gross national product grew by an average of 11 per cent annually, has now left the country with a staggering $90-billion foreign debt—the Third World’s largest. Last year most food prices rose by 250 per cent. Jaded citizens grimly de-

scribe 130-per-cent mortgage interest rates as “neutron bombs”—they leave the houses standing but the people dead. For nervous IMF bankers and foreign creditors, the dilemma is now whether or not to approve short-term loans totalling approximately $10 billion for the beleaguered country, which is already $1 billion in arrears on its debt payments, so that it can meet import bills and interest payments.

If Brazil’s debt were distributed equally, each man, woman and child would owe the foreign banks $770. But nothing is fairly divided in Brazil. For the 25 per cent of Brazilians who are illiterate, such mammoth projects as the $l-billion Brazilian space program are irrelevant. In the “Belindia” concept expounded by Brazilian economist Edmar Bacha, the country is virtually two distinct nations—a small rich and industrialized “Belgium” surrounded by a vast and half-starved “India.” Fully 50 per cent of the population earns only 12.6 per cent of the national income. During the boom years Brazil’s “Belgium” grew, and the population of “India” sustained itself with the hope that one day it, too, would find a place in the sun. Now, the dream of upward mobility is dead. Explained Bacha: “The

protests are emanating from those excluded from ‘Belgium’—the looters in the northeast—and from the middle class, which is suffering from unemployment and salary erosion.”

In September the nation’s anger erupted as rioters protesting against food shortages struck the country’s two major cities—Rio de Janiero (population, 8 million) and Sâo Paulo (13 million). In only 30 days mobs of slum dwellers looted 134 supermarkets and general stores. By the end of the month the attacks had subsided in the face of increased police vigilance and the presence of armed guards hired by supermarket owners. But in the chronically drought-parched northeast region, hordes of half-starved women and children ransacked 90 warehouses and food stores for beans, rice, sugar, oil and other basic foods. People have resorted to eating lizards and desert rats and using hard-skinned cactus in vegetable stews.

The economic crisis is most visible in the crowded streets of Sâo Paulo, which accounts for 60 per cent of Brazil’s industrial output. The city’s population quadrupled in less than 30 years, and it became a magnet for poor rural migrants. In 1980 Sâo Paulo state boasted a gross income that topped that of the whole of Argentina. But by August the city’s unemployment rate had reached 20 per cent, and industrial production had fallen to pre-1973 levels. One-third of those who are employed earn less than $75 a month—barely enough to feed a single adult. An army of trinket sellers and beggars has invaded the city. At night an estimated one million abandoned children roam the streets, begging and hawking chocolate bars to people in movie lineups. Crime in Sâo Paulo has reached alarming proportions. An average of three armed bank robberies occurs every working day. Bandits regularly ambush apartment residents in their lobbies and assail commuters on buses.

The plight of the normally stable professional and middle class is probably the most telling indicator of Brazil’s economic and social downturn. Estimates of layoffs in such professions as engineering run as high as 90 per cent. Enterprising individuals, many of them former company executives and managers, have mounted makeshift canvas booths on the streets where they sell such items as handbags and fruit. Those who still have jobs are forced to adopt emergency budgeting measures. Some workers park their cars halfway to work and walk the rest of the way. Many have had to sacrifice their children’s private school education—a near necessity for the middle class in a coun-

try in which public school standards are low. One of the more fortunate middleclass members is Odilon Repasche. A 43-year-old assistant department supervisor at the Sâo Paulo branch headquarters of the Banco do Brazil, Repasche earned $2,000 (U.S.) a month in 1980. Although he is still among the top 10 per cent of wage earners, his salary’s real purchasing power has fallen to $1,400. To save money, Repasche’s family has now forsaken vacations and replaced the gas-fuelled water heater with a more efficient electric model. Said a bitter Repasche: “I do not think we are privileged; no one should have to live on less than we have.”

According to the experts, Brazil’s recession will deepen before the economy improves. Gen. Figueiredo’s new austerity measures passed by Congress on Oct. 19 leave in place the highly inflationary indexing system in which wages are linked to soaring price increases. The IMF demanded harsher measures, which would have limited all salaries to 80 per cent of the cost-of-living index, now running at 30 percentage points below the annual inflation rate. But Figueiredo’s plan applies a sliding scale. It allows workers who make less than $120 a month raises equal to 100 per cent of the index.

Brazil’s economic and social plight poses political perils. The country is poised at a delicate point in the process called abertura—opening the way for a “slow, gradual and irrevocable” return to democracy, promised by the country’s military rulers. In the past year authorities have lifted censorship, granted amnesty for thousands of exiled or disenfranchised Brazilians and allowed democratic elections for almost every public office below the presidency. The government now favors compromise rather than confrontation to keep abertura on track. Although the military is divided internally, it appears willing to forsake governmental power. Still, citizens are concerned that if the domestic situation and civil disobedience gets out of control, the army might intervene to restore order.

Economists believe that Brazil could still achieve modest growth by 1986 if the world recovery continues. But the question remains: what will the intervening years bring? For the people, each day hopelessness grows. In the past few weeks apathy has begun to undermine the organization of strikes as some worried workers refuse to participate in illegal walkouts for fear of losing their jobs. For Waldomio Vesco, living with despair dulls the spirit of defiance. Said a resigned Vesco: “This is today’s reality. I have no choice but to accept it.”