BRAZIL PREPARING THE FUTURE

Meeting of the Latin American Federation of Banking and Insurance Workers FELATRABS in Rio de Janeiro. Left standing President José Trabulo, sitting next to him Secretary of Organization and Finances Miguel Duche and Secretary General Leonardo Marquez. On the right Carlos Gaitan, invited guest as former President of the Latin American Federation of Industrial Workers FLATI.

What can a country do that has so many debts that private investors don’t want to lent you more money?  That is the problem Greece is confronted with and Ireland and Portugal and who knows what country will be next. Of course, as an Euro country you can ask financial support of those countries with which you share the same money. But that also has its limits as we are seeing today in the Eurozone.

Maybe the answer is coming from Brazil that until now is a very healthy economy and the government wants to keep it like that. The left oriented Brazilian government has decided to invite private capital to invest the huge amount of 53 billion Euro ( about 66 billion US$) in the national road and railway infrastructure. In just 5 years the government wants to double the existing network of roads and railways.

The project was praised by the Brazilian industry. Finally one is going to invest in the aging transport infrastructure of the country. To give just one example: 90 percent of the Brazilian rail network goes back to the nineteenth and the beginning of the twentieth century. Trains have speed limits of 40 km per hour.

The billion-dollar project is an answer of the government of president Dilma Roussef to the moderate economic growth of Brazil. Last year the Brazilian economy grew 2.7%. This year a growth rate of 2% is expected. The last 10 years the Brazilian economy was growing with an average 4%. Roussef hopes that the investments in the sixth economy of the world will give additional impetus to the economy. The project will deliver 150.000 extra jobs. In 2014, the year of presidential elections, the first results of the projects should be visible.

In 2014 the World Cup Soccer will be held in Brazil. Photo made on the famous Copacabana beach of Rio de Janeiro.

Until 2010 Brazil seemed to be immune for the international crisis. The big, healthy Brazilian banks prevented Brazil in 2008 to be sucked into the international credit crisis. But since last year Brazil has also been affected by the economic downturn in the US and Europe. The country started to introduce budget cuts but also incentives to maintain economic growth. The focus was on boosting the domestic consumption. Taxes on cars were lowered and consumer credits less expensive. However, the results were not satisfying.

It is expected that in the first 5 years the amount of 32 billion Euros will be spend. In 2018 this should result in 10.000 km extra railways and 7.500 km. new highways. In the near future the south and the north of Brazil will be connected by railway. The other 21 billion Euros will be invested over a period of 30 years.

Of course there are also doubts whether such a large project can be successful. The government should attract investors on the capital market what will not be easy at the current financial climate. There are also doubts on the deadlines imposed by the government. To assign the railway and highway concessions, the government has earmarked only 13 months. Specialists say this is a very short period if you take in consideration that between 2003 and 2012 only 8 small highway concessions were granted.

One doubts also on the deadline 2018 when should be realised 10,000 km railway and 7,500 km. highway. The last time the government gave a concession was in 2008 for a highway of 270 km. for the amount of 280 million Euros. Until now only 40 millions have been spend.

Roussef hopes this time it will be different. Soon she will announce the privatisation of ports and airports. Brazil, guest country for the World Cup Soccer 2014 and the Olympic Games in 2016, will enter an era of historical infrastructural works and giant projects.

This is a summary of an article published in NRC Handelsblad, 17/8/2012 by Philip de Wit.

ETUC PROPOSES A EUROPEAN SOCIAL COMPACT

Mexican workers on a truck.

The European Trade Union Confederation ETUC proposes to the European Commission a “European Social Compact”. Important elements of that Compact are:

- Collective Bargaining and Social Dialogue as an integral part of the European Social Model guaranteed at the EU and national level.

- Economic governance for sustainable growth and employment by making the European Central Bank ECB the lender of last resort thus enabling it to issue Eurobonds. Growth programs adapted to each country should be discussed, agreed and monitored with social partners. The ETUC asks for extra resources, raised from improved use of the European structural funds, the European Investment Bank, project bonds, and an adequately engineered financial transaction tax should be allocated to social and environmental purposes. Stop EU pressure to liberalize public services that are a national responsibility.

- Economic and social justice meaning redistributive and graduated taxation on income and wealth, and the end of tax heavens, tax evasion, tax fraud, corruption and undeclared work. Action against speculation, effective measures to secure social equal pay and equal rights for work of equal value for all, policies to end the pay gap between women and men, wage-setting to remain a national matter and to be dealt with according to national practices and industrial relation system, negotiations between social partners at the relevant level, the statutory minimum wage should be increased substantially and harmonization of the corporate tax base and minimum rates of taxation for companies.

This is what you can call an impressive shopping list of classical trade union wishes. It looks like there is no financial crises at all, that states are not in a deep debt crisis, that financial markets don’t trust anymore some Euro-countries, that there have been no global changes and that a new world wide economic crisis is threatening everybody to lose his or her job.  Reading all these wishes you wonder if European trade unions are able to understand what is going on and what should be the priorities in these times.

What to do against unemployment if all classical measures like more government spending and maintain the status quo of the social welfare state do not work anymore? Continue on this road by states to make more debts, which however is not accepted anymore by the financial markets?  It is true that more and severe cuts in the national budgets of the Euro countries do not work either. On the contrary these budget cuts threaten to worsen the economic crisis and therefore the unemployment rates.

Is it not time that the European unions take a serious look to what is really happening and put as a first of all and everything priority employment? May be there are measures that will help to get more people into work so they get back a minimum of dignity? May be one should think about accepting less wage raises or less growth of social services in exchange for more jobs? May be some measures make the European economy more efficient and competitive so the economy will recover and strike new paths? Is that not also a question of solidarity?

Whatever these measures should be, it has become clear these days that the classical trade union positions don’t give an answer to the economic and financial crisis and to the global changes which by the way are creating chances for more workers than ever. For the first time in history millions of poor workers are now involved in global economics. The ETUC should this consider also. Most probably global change has its price and may therefore affect the prosperity of European workers but isn’t this not also a question of solidarity, a classical trade union value?