Left on the Move Left on the Move Left on the Move

The crisis of the states and the need for a political alternative

In this editorial, we continue with the debate on the electoral profile and program of the left-wing candidacies, with emphasis on the serious crisis in the states.

With just over two months to go before the election, the lack of representativeness is one of the few national consensuses. The government cannot see its popularity rise and economic indicators are not helping. There was a setback in growth and household consumption, as well as stagnation in tax collection. The International Monetary Fund revised Brazil’s growth forecast downwards, falling from 2.3% to a tiny 1.8%. The Getulio Vargas Foundation, in a recent study, predicts that only in 2020 can the recession be overcome with the national economy recovering the level of GDP in 2014.

The other important point in common among analysts is the greater unpredictability. No one can possibly predict the name of the next president. Nor are there any certainties regarding the country’s macroeconomic health. The traditional parties cannot find a strategy to regain their lost credibility, and market operators are announcing insecurity everywhere.

The season of partisan conventions is shaping the landscape. Bolsonaro, still isolated from a partisan point of view, continues to campaign, seeking the support of the business sectors, as well as planning an “inter-party” front to support him, despite the fact that the summits of his parties were closing alliances with other parties. The action of the week was the definition of a wide range of “great center” parties – including DEM, Solidaridad, PR, PP and PRB – in support of Geraldo Alckmin’s candidacy. In addition to much of the television time (the candidate of PSDB will be given more than four minutes), the wide range of alliances makes Alckmin the main bet of the bourgeoisie for the October elections. In the centre-left arena, Ciro, PCdoB, PSB and Lula discuss possible alliances within a framework of uncertainty.

In the last editorial, our focus was on the programmatic debate about the struggle against finance capital and debt. Here we want to continue the debate on the electoral profile and the program of the left-wing candidates, with emphasis on the serious crisis that the states are experiencing, as well as the policies to confront it, offering an independent alternative.

Rio de Janeiro and Rio Grande do Sul: a reality that is becoming more widespread

If Fear and Congress are responsible for dismantling the country, the state governors obey and apply the adjustment like good disciples. The “PEC 55”, voted in 2016 in the National Congress, imposed a freeze on expenditure with the “ceiling”. Before, the Union’s resources were already distortedly divided, but now the adjustment has a cascading effect. The central government imposes on states to be even tougher on adjustment, blackmailing public debt and reducing spending. At the same time, it imposes conditions such as the destruction of the State’s forecasts, the wage freeze and the sale of State-owned assets in order to comply with the’tax recovery’ plans approved by the National Treasury.

The two states most affected by this reality are Rio de Janeiro and Rio Grande do Sul. These are dramatic cases that will become widespread throughout the country. Both are laboratories of MDB policies and both have among their cadres the most loyal escorts to Michel Temer: Eliseo Padilha and Moreira Franco. In these states, we have a policy of direct attack on the salaries of servers, with the method of parcelling out almost the entire last period of management. In Rio de Janeiro, the company that provides water distribution services, CEDAE, had its sale authorized. In turn, the RS government approved the end of strategic foundations for the state such as FEE, Fepagro and Radio and TV Cultura.

The PSOL will have Roberto Robaina in the dispute between the government of Rio Grande do Sul and Tarcísio Motta, which was already the great novelty of the 2014 elections, in the dispute in Rio. The party will have candidates in more than 23 states and the Federal District.

The reality of the states where the PT – the main opposition party to Temer – governs is similar to the adjustment of the MDBs and the PSDB. Piauí was one of the first states to adhere to the fiscal logic of Temer. In Ceará, the government is an ally of Eunício Oliveira’s MDB. In Bahia, by Jaques Wagner and Rui Costa, they promoted a major spending cut, with state universities as targets. And not to mention the neoliberal policy of the largest state government in the state of Minas Gerais, that of Fernando Pimentel in Minas Gerais, another MDB ally, who parcels out the salaries of servers and makes the working conditions of state educators precarious.

Addressing the debt problem in states

In the late 1990s, two processes stood out in the context of state finances, increasing collection losses. On the one hand, the approval of the Kandir law, which exempted primary and non-industrialized products intended for export from ICMS. On the other hand, the contraction of public debt, with the establishment of interest on interest, leading to exorbitant and unpayable figures. This was the basis of the neoliberal arrangement for the “federative” crisis.

The conservative governments and the PT governments did not resolve this contradiction. The example of RS is emblematic. In the period from 1998 to 2017, the proportion of debt to the federal government increased from 77% to 86.6% of all state contractual debts (excluding precarious debts), which amounted to R$ 67.7 billion at the end of last year. Only Rio de Janeiro closed 2017 with a higher debt to income ratio (2.7 times), according to the Finance Secretariat.

The state government is negotiating with the Union to adhere to the Tax Recovery Regime, instituted by Complementary Law 159/2017. In exchange for a three-year suspension of the payment of the debt parcels to the federal government, the program requires, among other measures, the privatization of state companies (the state wants to sell CEEE, CRM and Sulgás) and the reduction of state tax benefits by at least 10% annually.

The model of accumulation that strangles states is reaching its limits. The next administration will have to deal with this matter. At both national and state levels, overcoming the rentier model that continues to dominate the economy and politics involves restricting and combating financial capital.

Independence and struggle! PSOL candidates must develop an alternative plan for the states

A new federal pact is urgent and necessary. It is essential to support the struggles of state servers to forca the governments to give up. An alternative plan to break the asphyxiation of the rules of debt and financial capital is the only way to defend the state and pay public service salaries without delay.

PSOL candidates for governor and their allies have responsibilities. The most important of these is to establish a programme that is centred on independence – from governments, big business and the political caste – and on the call for struggle, focusing on mobilising the workers themselves, women, young people and the people in general.

The immediate suspension of state debt payments, in line with a contract audit and the imposition of a new federal pact, should be the top priority on our agenda. The moratorium that a governor like Itamar Franco proclaimed in 1999 is an example that this is not just a measure of the social left. Demanding that the opposition governors adopt it is a further step towards an anti-neoliberal programme in the country.

It is also necessary to propose measures to put an end to the tax exemptions of the big capitalists, punishing the “tax evaders” and making clear the shift in the priorities of the states. We must defend public service’s workers and its mobilizations to overcome demagogic programs and its illusions that they can cure the serious financial crisis of Brazilian capitalism. It is necessary to think of a model to get out of the domain of the Kandir Law. The repeal of government measures and the dismantling of state assets are effective issues for our nominations.

In order to realize these ideas, we must stimulate and embrace with solidarity the current struggles that with great effort achieve victories, as did the municipal servers of São Paulo, Belo Horizonte and Porto Alegre.

Building a political alternative and changing the economic model: this is the role of the socialist left and the PSOL candidates to the state governments.

SOURCE: https://movimentorevista.com.br/2018/07/a-crise-dos-estados-e-a-necessidade-de-uma-alternativa-politica/

Translated by Clara Baeder

A new page to support and build new alternatives in Latin America and the world, defending the power of the workers and people against the 1% of the rich and privileged, and a society without exploitation.

Writing office

  • Pedro Fuentes
  • Bernardo Corrêa
  • Charles Rosa
  • Clara Baeder