Brazil: Strikes Try Lula's Party

The implications of Piauí Governor's failure to navigate through
an impending disaster could have wider and more profound
implications for Brazil Lula's Workers' Party. If the strikes in
that state spread this will be shown as yet another example
of the PT being unable to introduce much-needed reforms.

Guy Burton

Wellington Dias
You have to wonder whether the left-wing Workers Party (PT) administration in the north-eastern state of Piauí is set to suffer the same problems that one of its first governors, Vitor Buaiz, faced in Espírito Santo, eight years ago.

Since 8 June there have been strikes by the police and prison officers over pay. The Piauí governor, Wellington Dias, claims the state doesn't have the money, since much of its receipts from the federal government bypass the state to the municipalities.

In addition to disgruntled state workers is the added problem of the large number of `ghost' or inactive workers on the government's accounts. They cost Piauí around 27 million reais (US$ 8.7 million).

Meanwhile the state also has to cope with a debt to the federal government which comes in at around 22 percent of its annual budget.

Wellington Dias is limited in what he can do to get out of this fix. He can't take the easy route so beloved of governors in the past, in the years of high inflation.

Before the 1994 Real Plan, which effectively brought an end to rampant price rises, many state governments simply raised their salaries and passed the cost on to the federal government.

The Fiscal Responsibility Law, which was passed by Congress four years ago, limits the extent to which the budgets of Brazil's states and municipalities can be spent on the payroll to 49 percent. Piauí's current budget for salaries is 52 percent.

Last week, Wellington Dias tried a different tactic. He went to Brasília to challenge the federal government over his state's debt with a view to renegotiating it.

But that may not bring about much in the way of action. If the federal PT government makes a concession for one of its own, then why shouldn't it be the same for the other 25 states?

On Thursday, Wellington Dias's Finance Minister, Antonio Neto, proposed a series of measures. These would involve making cuts and redundancies throughout the budget, in the hope of streamlining Piauí's bloated accounts.

Rough Ride

But treading down this path presents Piauí's PT administration with several obstacles that observers of the ill-fated Vitor Buaiz will recognise. Assuming the national political party arrangements are reflected at the state level, a quick glance at the Piauí legislative assembly indicates that Wellington Dias may be in for a rough ride.

Of the 30 deputies, only three come from the governor's own party. Even assuming some form of co-operation with political groupings which the PT works with in the Congress in Brasília, including Leonel Brizola's Democratic Workers Party (PDT) and the Liberal Party (PL), then the most this group would muster are seven deputies—still eight short of a majority.

By contrast, the conservative Liberal Front Party (PFL) has nine deputies and the Brazilian Social Democrat Party (PSDB) and the right-wing Brazilian Popular Party (PPB) four each: 17 in total, more than enough to pass their own measures, or block those of the administration.

And the PFL has been making mischief in the last few days. It's leader in the assembly, Homero Castelo Branco, called for President Lula to write off the state's 2.7 billion reais (US$ 870 million) debt, using the federal government's decision to forgive 300 million reais (US$ 97 million), which Bolivia owed to Brazil.

But this is little more than gesture politics, since it is unlikely Brasília will take much heed of the proposal, thereby showing up Wellington Dias's inability to influence members of his own party in the national government.

Castelo Branco followed this up a day or so later with an even cheekier suggestion. Wellington Dias's administration, he said, "should suspend all official government publicity on the TV, radio, newspapers, magazines and other media for six months, and halt financial support to any type of event for the same amount of time." In other words, not only cut back the budget, but not explain to the public why it is necessary to do so.

Even if the PT administration took up these proposals and set about slashing its costs, it wouldn't only have the opposition in the legislature to worry about.

As the party of the unions, making cuts in the state workforce, or at least reducing their salaries, would affect the governor's base of support. Making savings across a wider front than just the police and prison officers could well spark broader protests and bring him into confrontation with his own kin.

Indeed, on the same day the PFL's Castelo Branco was proposing Brasília forgive Piauí's debt, two of the senior police officers involved in the strike were sacked, prompting a spirited defence on their behalf by a PT councillor.

Lessons from the Past

As members of Wellington Dias's party begin to decide whether their loyalties lie with the governor or the workers, Piauí's police were also considering whether to continue the strike further.

For observers of the PT, the best comparison with the current situation in Piauí must be Vitor Buaiz's own experience in Espírito Santo. Coming to power in 1995, he was faced with an overgrown state machine which needed pruning.

But he was one of the first governors to operate in the post-Real Plan environment, so he initially met the workers' demands by raising salaries. But inflation had disappeared and eventually the increased pay rises began to hurt. In 1996 his administration put forward a range of emergency measures, including voluntary redundancies and reduced services.

He was dependent on an opposition right-wing majority to get his measures through the legislature. But unfortunately for Buaiz, when they began to bite and brought protests out onto the street, the legislature cleverly dumped the blame at his door.

By working with the right-wing majority in the state assembly, Buaiz upset his constituency in the Espírito Santo PT. The party eventually split. Buaiz was threatened with expulsion and resigned from his party.

And the PT failed to stand a candidate for governor in the ensuing elections in 1998. Two years later, members of the local PT were still claiming to say that the experience had divided the party, setting the cause of left-wing politics and party back by 20 years in the state.

There must be worries in the PT's national party headquarters in São Paulo and in Brasília that such an occurrence doesn't happen again. The question must be whether they have learned anything from the experience with Bauiz and how they will deal with the challenge faced by Wellington Dias in Piauí.

But the implications of Wellington Dias's failure to navigate through the impending disaster could have wider and more profound implications. If the situation gets worse and the strikes spread and the administration grinds to a halt, then this will be shown as yet another example of the PT being unable to introduce much-needed reforms at both the local and national level.

Already the government in Brasília is grinding on with its social security reform, a challenge made harder by many of the provisions being enshrined within the constitution.

But of more short-term and immediate concern will be the way in which the performance of Wellington Dias—and to some extent Lula and the PT government in Brasília—is portrayed by the media in the run-up to October's municipal elections.

The PT gets a pretty bum rap from the national media, dominated as it is by the Globo empire, which most Brazilians tend to tune into, in between the novelas (soap operas).

Will Lula and his team let Wellington Dias take the fall? Or will they listen to one of Piauí's federal deputies in Brasília, Nazareno Fonteles, who on Friday, argued that a renegotiation of the debt would help both social and economic development?

For the sake of Piauí and the reputation of the PT, locally as well as nationally, the party needs to come up with answers to the current financial crisis as well as showing that it is still able to positively affect peoples' lives.

Guy Burton was born in Brazil and now lives in London. His field work on the Vitor Buaiz administration in Espírito Santo was published in a co-authored chapter in Gianpaolo Biaocchi's Radicals in Power (Zed Books, London) last year. He can be contacted at gjsburton@hotmail.com and maintains a blog, http://guyburton.blogspot.com, which addresses British and Brazilian politics as well as more general current affairs.