Brazil’s Se­nate ap­proves 20-year spend­ing freeze

Kuwait Times - - BUSINESS -


Brazil’s Se­nate ap­proved Tues­day a 20-year freeze on gov­ern­ment spend­ing billed as the cen­ter­piece of aus­ter­ity re­forms aimed at restor­ing eco­nomic health to the trou­bled Latin Amer­i­can gi­ant. The up­per house voted 53 to 16 to lock in the spend­ing ceil­ing. Cen­ter­right Pres­i­dent Michel Te­mer says tough mea­sures are needed to get Brazil’s fi­nances back un­der con­trol, but his aus­ter­ity poli­cies have prompted vi­o­lent protests and were crit­i­cized last week by a UN ex­pert as “a historic mis­take.”

Po­lice were out in force in the capital Brasilia to pro­tect gov­ern­ment build­ings from demon­stra­tors dur­ing the up­per house vote, which was wrapped up un­ex­pect­edly quickly. Luis Jorge, a union leader who had come for the protests, ex­pressed anger at the Se­nate for vot­ing “be­fore we could demon­strate. That makes us very an­gry.” How­ever, hundreds of peo­ple, many with their faces cov­ered, clashed with po­lice later Tues­day. Se­cu­rity forces fired tear gas to try to dis­perse the crowd.

A bus was burned dur­ing the demon­stra­tion, which drew about 2,000 peo­ple, po­lice said. The po­lice op­er­a­tion in the capital ended with 100 ar­rests, of­fi­cials said. In Sao Paulo, left-wing pro­test­ers at­tacked the head­quar­ters of FIESP, the coun­try’s main in­dus­trial as­so­ci­a­tion, be­fore be­ing driven back. The vote means that the spend­ing cap is now man­dated by the con­sti­tu­tion, serv­ing as the cen­tral plank in Te­mer’s bid to “trans­form” the bro­ken econ­omy, which is in deep re­ces­sion.

How­ever, Te­mer is rapidly los­ing po­lit­i­cal clout as he and many of his se­nior al­lies fight to sur­vive a slew of cor­rup­tion al­le­ga­tions. Brazil­ians bat­tered by nearly 12 per­cent un­em­ploy­ment and stub­bornly high inflation are in­creas­ingly an­gry over the scan­dals and hos­tile to the aus­ter­ity mea­sures. A poll pub­lished Tues­day showed that 60 per­cent of Brazil­ians op­pose the spend­ing ceil­ing. Only 24 per­cent are in fa­vor, ac­cord­ing to the Datafolha poll pub­lished in the news­pa­per Folha. When the Se­nate held a first vote on the mea­sure two weeks ago, pro­test­ers fought riot po­lice out­side Congress, burn­ing cars and smash­ing win­dows.

‘We need courage’

Te­mer, in an at­tempt to claw back pub­lic sup­port, has un­veiled stim­u­lus mea­sures that would at­tempt to give a short­term boost to the ail­ing econ­omy, the largest in Latin Amer­ica. But as the Se­nate be­gan de­bat­ing he de­fended his far-reach­ing aus­ter­ity pro­pos­als, say­ing they were needed to change Brazil for the long term. In ad­di­tion to the spend­ing ceil­ing, a sep­a­rate mea­sure is be­ing sub­mit­ted to Congress propos­ing pen­sion re­forms. At the cen­ter of the mea­sure would be a min­i­mum re­tire­ment age of 65, sub­stan­tially higher than the cur­rent re­quire­ment, which varies widely be­tween pro­fes­sions, but can be as early as 55 years old. “We need a lot of courage at this mo­ment in Brazil to do things that are ap­par­ently un­pop­u­lar but which will bring pop­u­lar­ity later,” he said in a state­ment. “We need to trans­form the coun­try,” he said.

Philip Al­ston, the UN poverty and hu­man rights rap­por­teur, at­tacked the 20-year spend­ing cap as “putting an en­tire gen­er­a­tion at risk of so­cial pro­tec­tion stan­dards well be­low those cur­rently in place.”“This is a rad­i­cal mea­sure, lack­ing in all nu­ance and com­pas­sion,” he said last week. “It will hit the poor­est and most vul­ner­a­ble Brazil­ians the hard­est.” How­ever, there was a boost from the in­com­ing US pres­i­dent, Don­ald Trump, who “con­grat­u­lated” Te­mer for the re­forms in a phone con­ver­sa­tion Tues­day, ac­cord­ing to the Brazil­ian pres­i­dency.

Te­mer’s en­tire gov­ern­ment is strug­gling in the face of al­le­ga­tions ty­ing se­nior figures and the pres­i­dent him­self to the gi­ant em­bez­zle­ment and bribery probe cen­tered on state oil com­pany Petro­bras. Te­mer came to power last Au­gust af­ter the im­peach­ment of left­ist pres­i­dent Dilma Rouss­eff. As her for­mer vice pres­i­dent, Te­mer was ap­pointed to the post au­to­mat­i­cally for the rest of her term through 2018. Te­mer said he would fo­cus on end­ing the po­lit­i­cal and eco­nomic chaos that had doomed the Rouss­eff gov­ern­ment. How­ever, the lat­est poll from Datafolha shows 63 per­cent of Brazil­ians want him to resign to al­low early elec­tions. Only 10 per­cent said they thought his gov­ern­ment is do­ing a good job. —AFP

BRASILIA: Po­lice charge on demon­stra­tors protest­ing in front of the Na­tional Congress in Brasilia yes­ter­day. Brazil’s Se­nate has ap­proved a 20-year freeze on gov­ern­ment spend­ing billed as the cen­ter­piece of aus­ter­ity re­forms aimed at restor­ing eco­nomic health to the trou­bled Latin Amer­i­can gi­ant. —AFP

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