Brazil as a Failing State
Paulo Roberto de Almeida
Political sociologist, university professor (Uniceub)
[Estoril Political Forum; Panel
Brazil, June 27, 2017]
1. Brazil: the democracy that failed
I started this draft text, for the purpose of delivering an
oral statement, some three months ago, around March, just after having accepted
the invitation by the organizers to take part in the Brazil panel of the
Estoril Political Forum. At that moment, the second title was not the question
of Brazil being already a Failed State, but just a doubt, expressed with this almost
affirmative interrogation: “will it become a Failed State?” It may be the case,
judging by recent developments in the last few weeks, in the political,
judicial, and police spheres, all of them very busy with too many cases of
corruption, protests, and institutional impasses. So, in less than three
months, I had to rephrase and strengthen my title, just to emphasize the true
state of political affairs in my country: the scenario is deteriorating rapidly,
to say the least.
With this new introduction, in the form of the above
paragraph, I will have to be direct, sharp and may be unduly severe: Brazil is,
if not already a Failed State, at least a Failing State, in many dimensions of
this concept. In fact, its political system, under whatever criteria we may
choose, has already failed. This is the result not only of the kleptocratic behavior
exhibited by some of its members, but also because of the very well known
rent-seeking attitude of many, if not all, representatives of the Brazilian elites,
entrepreneurs, politicians, trade-unionists and the rest. The present scenario
is on the verge of anomie, not only because of episodic factors, such as the
current political crisis or economic recession, but because of a structural
deterioration of Brazilian institutions, despite an apparent resiliency of its formally
democratic architecture. The true Brazilian crisis nowadays is of a moral
order, the very glue that maintains a nation united behind its values and principles:
Brazilian citizenship today does not trust anymore any of the three branches of
government, the Executive, the Legislative and the Judiciary.
Brazil is a deteriorating polity that, in view of the lack
of any real consensus around the necessary reforms in its ailing institutions, promises
to continue to be weakening gradually for the next few years, towards its first
two hundred years of existence as an independent nation, and irrespective of
the general elections in 2018. Indeed, in 2022, income per head of the average
Brazilian will be the same, perhaps even less, than its level attained ten
years before; the state of its public debt will be on the verge of bankruptcy,
if not already insolvent; and the ominous fragmentation of its political system
will be worsening to the point of a governance disaster.
Those are threatening features that pale when confronted
with the moral dereliction of our so-called political elites, together with the
promiscuous capitalists and bankers that have been funding the former, in a
rare neglect of duty (perhaps it was intentional) for a country formally
modern, proud of its democratic institutions, and possessing one truly
sophisticated State among developing countries of the Western Hemisphere, if
not in the global South. Has Brazil become a toxic State?
The question is this: is it true that we are a consolidated
democracy, possessing a functional State, and exhibiting strong institutions,
capable of cleaning the rotten apples that sometimes embeds and plagues the
governing and representative bodies of this State? I am not sure of that, in view of last two
years of troubling developments in the sphere of governance. Taking into
account the whole set of evidences raised by the Federal Police, the Public Prosecutors
and the Judiciary, not only limited to the very well known “Car Wash
operation”, my preliminary conclusion can be only one: if Brazil is not yet in
a condition of a Failed State, it is already showing various evidences to be a
Failing State. How did we arrive at this horrible state of affairs, of not
having a stable government and a performing representative institution, even
after applying the second impeachment procedure since the early nineties, or
perhaps precisely for that?
In one dimension, that of public accounts and macroeconomic
management, Brazil has had a perfect storm, a self-inflicted crash course on
how to destroy an entire country in half of a presidential mandate, and on how
to implode a whole economy in less than four years, even if the process took a
little longer to be built. In another dimension, that of its polity, Brazil
showed itself as a well prepared country in terms of erosion of normal rules of
governance, a perfectly fitted country for a schizophrenic process of
dereliction (especially in the moral sense of that word).
In terms of the social impact of this political decay, there
was an improvised combination of corrupt representatives and a greedy class of
high State technocrats that lead the game towards the 2016 impeachment, which
did not inhibited the continuing political crisis afterwards. Just to mention
the State bureaucracy, almost privileged as the French enarchie, it is easily recognized that we do have many mandarins
who are perfectly able and capable to conduct a very crude process of deepening
of the already very unequal income distribution in Brazil, through very high
wages and an infinite number of benefits that take a large part of the current
expenditures in the budget. And, last, but not the least, during the entire
Lula years and the disastrous one and half mandate of his successor, we
assisted a truly “scientifically planned” scheme of high corruption in every
sphere of the public administration, going each time more high and deeper in the
scale of an organized gang robbery during the last decade and half.
How we could arrive at that? How we became so recklessly
delinquent in terms of political governance and economic corrosion? Why our
Weberian State was so rapidly and irresponsibly destroyed by a gang of
political maffiosi that took the country by assault from 2003 up to 2016 (at
least)? How could Brazil take a leading role in the unhappy championship of
world corruption? How a bunch of confirmed kleptocrats stole the State and the
Brazilian society during so many years? What all that means for technocrats like
me, for academic people like you, for all of us? What we, Brazilians and our foreign
friends, can do in face of it?
The reasons for that dire state of affairs are multiple and
variable, along the last two or three decades, but can be summarized in two or
three explanations: one is the very backward Weltanschauung – if the concept applies – of our political elites,
which does not merit this qualification, as they are mediocre, ill-prepared,
totally rent-seeking and opportunistic; the other is the schizophrenic
character of our Constitution, a true monument to political demagoguery and
economic populism, constantly refurbished and expanded by a bizarre coalition
of professional politicians and Gramscian literati, both acting on the premises
of politically correctness; and, the third reason, is certainly the conquest of
the State by a truly criminal organization acting under the disguise of a
political party. This third factor acted as the decisive trigger for the first
two to be pushed forward, and exert a portentous influence on the whole process
of deterioration.
Let’s examine each one of those features, and try to devise
a realistic picture of the Brazilian political decay over the last two decades,
the irresistible descent into economic anomy and political chaos that
characterizes the current state of affairs in the country. I will be perhaps a
little bit impressionistic, more than crudely objective, but I will try to
support my arguments with empirical data and statements of fact. A brief exposé
of the moral, political and economic situation is necessary to present a real picture
about the awful situation we are enduring right now.
To be true, it is impossible to understand the political
history of Brazil since the beginning of the millennium if we do not admit that
Brazil and the Brazilians where governed, since 2003 and up to May 2016, by a
criminal organization, one mafia-like association that implemented a carefully
plan to rob the State, private and public companies and the entire population
during its entire stay at the head of the Executive.
2. The scenario built by the new Barbarians
Brazil became, without any intended or
declared purpose to do so, one of the most corrupt political systems in the
world, a distinct characteristic that I’m not proud at proclaiming it openly.
Ours is certainly the most corrupt political system in our own Hemisphere, and
one of the most active protagonist of large scale corruption in other
continents, most notably in Africa. This was done after that one of the most
corrupt companies in the world, the construction company Odebrecht, established
an almost complete network of corrupted practices in Africa and in many
countries in Latin America. This was done in some countries in particular, that
is, African Portuguese-speaking dictatorships, for one side, and the so-called Bolivarian
States in our continent, for the other, besides of course the most ancient
dictatorship in the region, the tyrannical regime of the Castros in that
unhappy island of Cuba. Those who doubt the extension of the money
laundering, traffic of influence and recurrent bribery involved in all kinds of
Brazilian undertakings abroad, during the Lula era, have better to read the
book by the journalist Fabio Zanini, Euforia
e Fracasso do Brasil Grande: política externa e multinacionais brasileiras na
era Lula (São Paulo: Contexto, 2017), where some of the biggest operations
lead by BNDES – US$ 14 billion, for more than 500 projects in 11 countries from
Africa and Latin America – are carefully documented.
It is not a novelty nor a surprise to verify
the extraordinary coincidence of this large web of corruption with the activist
foreign policy that we have had over more than a decade, more precisely between
2003 and 2016, when the so-called “active and proud diplomacy” – ativa e altiva – was in place, largely
conducted by Mister Lula, by the foreign minister Celso Amorim and other
Worker’s Party apparatchiks. They have done that with the total cooperation of
the company King of Corruption in Brazil and elsewhere, Odebrecht.
No, I’m not blaming Odebrecht for our
entrenched, pervasive and extended corruption, a feature with which this
company is more than familiar since three generations at least. I’m blaming for that the very heart of the matter, the
mafia-like political party that was in charge of the State from 2003 and 2016,
and which profoundly transformed the nature and the functioning of the
political corruption in Brazil, making it an all-encompassing, an incredibly
vast, a widespread undertaking, a scientifically calculated and implemented
enterprise, enforced without exceptions in every sector of our public life for
the whole duration of that period.
That was not the sole product of this criminal
organization. It was also responsible for the worst, longest and more profound
recession of our economic history, this one which provoked two successive falls
in the GDP growth rate, making them present minus 3,8% in 2015, and minus 3,6%
in 2016, provoking a decline of 10% in our average income per head, in the
whole producing what I have called The Great Destruction, after other experiments
known as Great Depression or the Great Recession (see Paulo Roberto de Almeida,
“The
Great Destruction in Brazil: How to Downgrade an Entire Country in Less Than
Four Years”, Mundorama, n. 102, 1/02/2016, link: http://www.mundorama.net/2016/02/01/the-great-destruction-in-brazil-how-to-downgrade-an-entire-country-in-less-than-four-years-by-paulo-roberto-de-almeida/).
The particular feature of our current economic
crisis is that it didn’t emerge out of an international crisis, a world
economic shock or anything of this kind. It was entirely created in Brazil,
100% home made, by the incredible incompetence and corruption of the PT’s
apparatchiks and their allies in the economic private and public sectors.
According to one of our best economists, Alexandre Schwartsman, Brazil is going
through a retrocession of seven years in only three years, counting with the
virtually no growth this year of 2017. He
denounces the argument of PT’s economists that blame the current state of
economic affairs on the “austerity measures” being taken by the acting government.
That is utterly false, as the public expenditure was maintained at their high
levels of recent years, including a raise in social security payments and
similar disbursements. Investment of course was cut down to minimal level, if
any today, but in fact it was collapsing since 2013, thanks to the complete
mismanagement of the national economy since the impeached president started to
have a say in public policies (and I put that since the very beginning, middle
of 2000s).
The fact is that Brazil was thrown in
unsustainable fiscal policies since that moment, which combined with a
spectacular rise in State intervention to produce what we have today: the worst
recession in our history, which risk being with us well beyond 2020, probably
receding only after we commemorate our first two centuries of an independent
nation, in 2022. How we came at that? Some of the blame comes from the endless
love that Brazilians have for the State, any State, at any point of our
history. But much more came out from the exceedingly great obsession that
lulopetistas and their allies have shown in connection with a undisguised
desire for control of the society and its economy, which can be explained by
the truly Stalinist nature of this party, or at least, of many of its leaders
(who could be said to be a kind of neo-Bolsheviks, eager to become the
bourgeoisie of third persons capital).
3. A schizophrenic Constitution, deepening
our failures
Much, if not most, of the problems that afflict an already
completely failed political system, and a business environment that is a kind
of Dante’s inferno for the entrepreneurs, derive and arise from our
Constitution. The 1988 Chart, described by one of its distinguished makers, as
a “citizen Constitution”, is in fact the strongest enemy of the common citizen.
Many features give the rationale for this harsh judgment. First, its prolixity,
absolutely exclusive in the annals of the world constitutional history: hundreds
of articles, hundreds of caputs and paragraphs, dozens of items and sub-items,
and plenty of transitional dispositions, that regulate, probably abusively,
each and all aspects of the Brazilian life, of the life of its citizens. The
citizenship has strong enemies, first of these a powerful bureaucracy, besides the
corporatism, the nepotism, the patrimonialism, and every other disease of our
political and electoral system. Second, the intrusive character of the economic
dispositions of the Constitutions, perpetuating the old Portuguese centralism
and dirigisme, according to which no undertaking, no private initiative, no
economic entrepreneurship can be performed without an official permission, a
royal edit, a State decree or any other form of government rule. Third, by its
delusional benefits given to every one of the Brazilian citizens – a generous
social security system, especially towards public officers, a kind of health
and educational free lunch (everything is open to all citizens, irrespective of
its costs), and many other features, of course utopian by nature – the
Brazilian Constitution constitutes a perfect recipe for a permanent rise and
expansion of public expenditures, a circumstance that responds for the current
recession and the almost certainty that with this kind of constitutional
arrangement a sustained economic growth is an almost impossibility in Brazil.
The fact that the Constitution was discussed and enacted
before the fall of the Berlin Wall, that is, the complete failure of socialism
and State guidance in general, explains some of the lasting negative effects of
its most important political and economic dispositions. But that was not enough:
even with the demonstrated schizophrenic character of many of those economic
and political dispositions approved in 1988, in the quarter of century
afterwards, the institutional scenario in Brazil was compounded by a hundred
new constitutional amendments, modifications, additions and substantive changes
in the original text, giving new rights, innovative benefits, another set of
entitlements, all consolidating a web of privileges and favors, politically,
economically, if not morally questionable, making of the Constitution a perfect
device to obstruct a sustained effort for the development of Brazil.
Fernando Henrique Cardoso, immediately after inaugurating
its first mandate, started to change, and eliminate, the most evident
discriminatory dispositions of the Constitutions towards business activities and
foreign investments. Unhappily, he could not privatize the giant dinosaurs of
the public system, the gigantic Petrobras, and the whole set of State banks (do
Brasil, Caixa and BNDES) that were at the center of the monstrous corruption
developed in the following years, revealed by the Car Wash investigations. Lula
and Dilma administrations were totally comfortable with the gigantic
superstructure of the Brazilian State, and with the “detailed rights” given by
the Constitution to “all citizens” (but reserving some of its best benefits to
the mandarins of the Republic, and the Nomenklatura associated with the
governing party, political allies, and apparatchiks in general. Brazilian
Constitution offers ample chances for corruption, influence peddling and all
kinds of traffics inside and outside of.
Recently, three personalities from the civil society (Modesto Carvalhosa,
Flávio Bierrenbach, and José Carlos Dias) proposed, in a newspaper
article (“Manifesto à Nação”, O Estado de S. Paulo, April 9, 2017), the elaboration of a new Constitution,
based on those simple facts:
Deriving from an
agreement among the forces that disputed power after the dictatorship, the 1988
Chart was filled with ad-hoc arrangements (casuísmos)
and corporative interests. It has established an absurd political system that
feeds itself from a pseudo party system, excessively fragmented and captured by
the interests of corporations and politico-criminal factions. This makes
excessively costly the governance, creating a toxic relationship between the branches
of government, which reinforces corruption, influence peddling and the
devastating shortfalls in the public accounts.
(…) The incurable vices
of the 1988 Chart were compounded by anomalous 95 amendments since its
promulgation, whereas there are more than one thousand new proposals of
constitutional amendments [waiting discussion].
They pledge then for an original, independent, exclusive and
autonomous Constituent Assembly, because the normal Congress and the representatives
elected under the current rules would not be able to properly change the
existing Chart in every inconsistent disposition it exhibits in its present
form. They propose, also, a complete set of political reforms in order to
eliminate the incongruences of the political system, including the Party Fund
and the public financing of campaigns.
4. The conquest of the State by the
political mafia of PT
Brazilian political decline is not exclusive in historical
record. Before us – and certainly after our sad experience – many other
countries meet similar trajectories full of failures, breakdowns of
institutions, economic catastrophes, diplomatic fiascos and were put on the
verge of bankruptcy, if not national disasters. Mussolini’s Italy, Hitler’s
Germany, Peron’s Argentine, Imperial China, African dictatorships, Latin
American caudillo states, Oriental despotisms, we can identify many other disappointments
on the path of normal processes of political and economic development. What
characterizes all and each one of those breakdowns in normal statecraft is the
absence of the rule of Law. And that is what distinguished the successive
governments of PT, between 2003 and 2016, and perhaps still exercising
protracted effects in the current political system.
When I started to work with the Presidency, in 2003, not as
a diplomat, because I was considered a persona non grata in Itamaraty – having
signed some too realistic articles on the ordinary leftism of the PT, and its
anachronistic diplomacy – but as a simple technocrat, in the Strategic Affairs Unit,
leaded by one of the governing troika (all three left the government after a
few years), I was surprised, first of all, by the monumental incompetence of
the apparatchiks engaged in Lula’s government. In the first two or three years
– before I left the Presidency myself – the most plausible explanation for the
complete ineptitude of the first measures taken by his governments that I could
found was that the apparatchiks were equally clumsy, incompetent, totally
unprepared for the normal work in the State bureaucracy. I was completely
naïve, but after the first large-scale scandal, the Mensalão crisis, in 2005, I
took a more realistic picture of what was happening: the ineptly devised
measures, decrees, provisional acts, and other regulations by Lula government
were not the result of the stupidity of those freshly arrived in the
government. No! They were the intended purpose of their peculiar expertise in
just one thing (or many of the sort): theft, robbery, fraud, pilfering, etc.
Current and future historians of Brazil have a large and
difficult task ahead: revise and rewrite our political history between 2003 and
2016 (and probably also before and after of those dates). This revisionist
endeavor is imperative for one single reason: it is impossible to explain many
of the undertakings, initiatives, and other high-ranking measures taken by the
three and half lulopetistas governments if we not take for granted the fact
that Brazil and Brazilians were governed during those years by a mafia-like
gang of criminals, a group of political crooks who took the country as hostage
of their felonies and totally delinquent governance. I made very quickly the
complete circle of my explanation for those apparently unexplainable inept measures
adopted since the first days of their administration: the “economic crimes”
committed in almost every sector of the State action – energy, labor, industry,
social affairs, communications, including foreign policy – were not the
side-effect of inconsequent and unprepared apparatchiks, but they were the
direct result of purposeful activities pushing towards the assault of the
State, its state companies, not forgetting the very nation, private companies
and citizens.
What was the result of the lulopetista dominance over the
State? Public organizations and associated businesses under this scheme suffered
the plunder by the neo-Bolshevik party in order to consolidate the intended monopoly
of power they were planning since the beginning. Those actions were not
something improvised, but common crimes, directed to the logical consequence of
those acts: amass a vast treasury of financial resources, with which to keep
the State, its institutions, and the nation, under their control. And the
treasury is vast in Brazil.
There are 154 federal state companies in Brazil and hundreds
of subsidiaries: Petrobras, for instance, has 43 subsidiaries (some being sold
now, after the most awful plundering ever seen in its 60 year history). Eletrobras,
the energy holding, has almost 40 dependent companies, Banco do Brasil almost
20, and so on. Each one served as platforms for a combined assault by a bunch
of rascals, party nominated administrators, trade-union maffiosi put at their Counsels
or governing boards, and many apparatchiks lacking any managing competence.
Their function was just one: sack funding for the party and themselves. The
total debt of those 154 State companies grew from 142 billion reals in 2009 to
more that 540 billion in 2015, and the personnel expanded from 430 thousand in
2006 to more than 550 thousand in 2015; their combined negative assets grew by
more 153% in the period, from -9,7 billion reals to -24,6 billion. Many of
those companies are now totally dependent of the National Treasury, and State
banks will have to be capitalized, replenished by the additional taxation for
the foreseeable future. Brazil will not recover before five to ten years, and
even after that, per head income will be the same as that of ten years before.
This was not the result of any foreign financial crisis, but
a totally home made disaster, what I call the Great Destruction. But that is
only part of the whole picture of the Great Robbery in Brazil during Lula
years. The active participation of promiscuous capitalists in the criminal
endeavor is of course an important element of the horrible story Brazil has
endured under the mafia-like gang of PT apparatchiks, commanded by the big
bosses of this pro-totalitarian party. Another new feature, that has no
precedents in the economic history of the public administration in Brazil is
that the two – Antonio Palocci and Guido Mantega – PT financial ministers were
actively devising new “legal” methods – decrees, provisional measures, even
laws – for a continuous flow of State money and private “contributions” in
favor of the party.
By doing so, by practicing what could be called a higher
stage in the scale of corruption in Brazil and elsewhere, Lula and PT’s
governments can be said to be at the origin of a new pattern of organized crime
in the political sphere: the institutionalized crime, a kind of combination of
mafia-like practices – that is, a mixture of charismatic and patrimonial
established methods – with some Weberian procedures – that is, rational-legal –
that represent a superior step in the sordid art of collective robbery. In
Marxist terms, one could even advance a sort of Engelsian qualitative
transformation of the political corruption in Brazil, according to a new
evolutionary scheme: from the former, traditional artisanal mode of production
of corruption – made individually by “normal” politicians – to the new,
scientific, industrial mode of production of corruption, in large scale, at
every level of the State, its public companies, and also the private sector,
plundered or voluntarily engaged in the Great Brazil Robbery.
5. What’s the way out of this?
Argentinians, when confronted with a similar (perhaps worse)
dereliction of their political class, in the burning succession of crisis in
2000 and 2001 – five presidents in a month or so –, adopted, out of the free
and spontaneous mass demonstrations, this apt recommendation: “Sack them all!”
(Que se vayan todos!). There is no such
thing in Brazil, yet, but perhaps we are not very far from this kind of
reaction. The informed public opinion, the middle class citizenship, and even
common citizens, have already manifested their dismay with the political class.
In São Paulo, a “manager” was elected mayor, instead of one from the old traditional
politicians. Perhaps the same will occur in the 2018 general (presidential, governors,
Congress) elections: candidates with current mandates will probably be rejected
in favor of a “new” kind of political elite, the “managerial class”, that is, real
administrators with some political feeling. This is a possibility, not a
prediction…
Brazil is a sui generis case among Latin American countries,
having none, or few, of the caudillo traditions of many of its neighbors,
though exhibiting the same patrimonialistic deformation of many countries in
the region and elsewhere. This very old sin on Portuguese origins,
patrimonialism is at the core, and at the very heart of the institutional deterioration
in Brazil. But not the traditional form of patrimonialism, which was somewhat
modernized during the modernization of the Brazilian State, between the Vargas
era (1930-54) and the military regime (1964-1985). Under the lulopetista regime
(2003-2016), patrimonialism assumed a gangster-like character, not very far
from the “República Sindical” model of the Peronist regime in Argentina. In the
case of Brazil, it was a kind of Peronism without doctrine – the
“justicialismo”—and a vulgar version of the Syndical Republic. Worse still: in
the case of PT regime in Brazil, there is large evidence of the clandestine
influence of Communist Cuba in the governments of Lula and Dilma, of course in
a disguised form.
Recent events in the political process presented a
combination of legal and institutional developments arising from the 2013-2014
crises – street manifestations and a very controversial election campaign – and
the intervention of illegal, criminal, covert operations of political financing
in an already very corrupted environment. The succeeding process of impeachment
against Dilma – because of responsibility crimes linked to irregular use of
state banks and the budget iself – was conducted according to the institutional
rules, albeit the Supreme Court has, itself, violated de Constitution at least
twice, followed by a botched decision by the electoral court in the case of the
notorious botched elections of 2014. Notwithstanding the formal compliance with
some legal rules, the 2014 presidential election was a demonstration of how
corrupt, and corruptive, can be the party politics, and how submissive to this
dirty system can be the superior tribunals in Brazil.
6. Reforms: what is possible and what is
impossible?
But, the crucial question, in face of the current crisis,
is: what could be the structural reforms that Brazil needs, in order to
overcome the current state of paralysis, anomie, dissatisfaction? This
situation of disarray is, in fact, a reflection of a double process: the worst
economic recession ever in our economic history, and a completely failed, prone
to corruption, political system. There are plenty of needed reforms, but one
surpasses every other: the reduction of a monster, the Brazilian State. Indeed,
Brazil has endured, since the 1985 democratization, a regular, constant, progressive
encroachment of the State over the lives and work of millions of citizens, or
better, everyone and each one. Technocrats of the public agencies, political
representatives, social engineers of the Executive, labor and or environmental
prosecutors are permanently engaged in all kinds of regulation, supposedly to
protect society from itself.
Let’s record just a few examples of the schizophrenic
character of some State regulation in Brazil, either federal or local, that
afflicts normal economic activity or renders impossible the life of micro or
small entrepreneurs. Many years ago, in the spirit of the ultra-regulatory 1988
Constitution, a Congressman from the PCdoB (the small “Maoist” Communist Party
of Brazil), later a minister in the PT’s government, succeed in approving a law
that prohibits in the whole Brazilian territory the introduction of
self-serving pumps in gas stations, with the declared intention of preserving
thousands of low-pay jobs. The same political figure also achieved to approve
the maintenance of other low-pay jobs in the urban Brazilian transportation
system: the collectors of fares in every buses of the Brazilian cities. With
this, only now, in 2017, the Justice in São Paulo city, acting under demand
from the new “manager-mayor” of the capital, João Doria (a prospective
president in 2018), declared unconstitutional a law from the City Assembly that
kept in “employment” thousands of fare collectors in the city buses,
irrespective of the dissemination of pre-paid chip cards and electronic
registers at the vehicles; almost every city in Brazil carry heavily subsidies to
the transportation companies, another source of corruption and political
trafficking in Brazil.
Last innovation, in Brasilia, was a new law, from the local
assembly, destined to introduce a compulsory registration of every Uber private
driver in the federal district: with that, they will probably obliged to pay
some sort of tax allowance or stipend to continue to exert their job. One
driver, animated by this fascist mind, sued Uber in the local justice in order
to receive all the benefits provided by the truly fascist Brazilian Code of
Labor (enacted by the New State dictatorship in 1943, and inspired in the
Mussolini’s Carta del Lavoro): vacations
with 1/3 added pay, the usual 13rd wage, subsides for lunch, gas and other
benefits. The same applies to the many “feudal” corporations still active in
Brazil: lawyers, architects, engineers, economists, doctors, all of them
functioning as an “Order”, allowed to collect annual fees from their
“protected” professional category. A “trade-union contribution” (imposto sindical) is still in force, and
an annual payment equivalent to one-day labor of every worker is collected to
be distributed by the Ministry of Labor to trade unions at the various levels
(category, federal states, confederations and national trade unions (centrais
sindicais, at least seven), every one living on this paying roll, without any
control from the Accounting Tribunal. “Corporative” is the other true adjective
of the Brazilian Republic.
We can now pursue this analysis by exploring the kind of
restructuring which is needed to improve, even minimally, the current state of
(non) affairs in Brazil, one of the very difficult places in the world to
conduct business, according to the reports related to this domain; a quick look
at the World Bank’s Doing Business, or
at the Fraser Institute’s Economic
Freedom of the World can corroborate this evaluation. Either Brazil
undertakes an entire set of reform, or it will be condemned to endure a very
long period of low growth, not to mention severe crises Greek-style or decay as
durable as Argentina’s. I will divide my suggestions into two classes of
reforms: those possible, or at least “doable”, and those impossible, or utopic.
Let’s go:
Possible
reforms:
1) A radical shrinking of the weight of the State over the
productive life of the nation, starting by the reduction to half in the number
of ministries, with a proportional elimination of a wide range of public
entities. Decrease in the Kafka-like bureaucracy of the Federal Revenue Service.
End of any type of privileges linked to public functions.
2) Reduction and simplification of the fiscal charge, which
is very difficult because of various levels of taxation in the federation and
regional differences in fiscal repartition of the receipts; therefore, the reform
could start by a linear decrease in the various rates, for instance 0.5%
annually during a ten-year period, while a discussion on the quality and amount
of each type of taxation, and its appropriation by states and municipalities,
can take place in a orderly manner.
3) A new fiscal deal: suppression of the unconstitutional
figure of conditional budget allocation by the Executive, as well as pork
barrel individual additions to the budget, which has to applied and implemented
exactly as approved by the Parliament;
4) Elimination of the complete machine for governmental
self-propaganda, only allowed information campaigns with a true finality of
public order (vaccination, and natural catastrophes, for instance);
communication is well served by private channels.
5) Resumption of a general reform in the social security
systems, unification of the common and public sector schemes, elimination of
all residual privileges, and the establishment of a sustainable intergeneration
mechanism, compatible with the moving demography and the sectorial financing of
the new system.
6) A complete revision in the National Health Service, nowadays
working under a fictional non-paid, universal access system, towards a market-based,
multiple system of insurance companies, with subsidies only for the confirmed
low income strata.
Impossible
reforms:
1) A political reform aimed at the complete elimination of
the Party Fund, a State sponsored stipend to every party recognized as such by
the Electoral Tribunal, which is an inducement to the creation of new legends, and
the fragmentation of the existing parties, giving financial support to “for-rent-parties”
(or, an electoral business of the worst sort); current system allows a total segregation
between the party machine and the electorate, which is, in sum, a rent-seeking
approach to politics. No public financing of campaigns of any kind: parties are
private law undertakings.
2) Immediate extinction of 50% of all commissioned jobs in
the public sector, in all levels and spheres of governmental activities, with a
concomitant establishment of a parliamentary and executive commission designed
to reduce and align the remaining jobs, to be filled by open meritocratic
recruitment, without the current stability at entrance; complete interdiction
of reciprocal nepotism and other forms of preference.
3) Education: creation of a new class of teachers and
professors, paid according to merit and benchmark results, without stability,
but with a constant program for training and capacitation, proportionate to
remuneration.
4) Privatization of every public or state company not linked
to an essential and exclusive public service (defense and justice, for
instance).
5) Elimination of all tax and fiscal exemptions, and other
privileges, linked to the so-called “religious entities”, now turned into a
thriving “industry”. The same applies to trade unions, another “big industry”:
elimination of the “syndical taxation”, complete freedom of association, no
public resources whatsoever for the “centrals”.
This is my personal list for reform in Brazil, that could be
integrated to an agenda for reform during the next few years, if – and that’s a
Big If – there could be any chance of real consensus among political elites and
entrepreneurs in that direction. We all know that reforms, in general, are
always difficult, as Tocqueville recognized in relation to the transition from
the Ancien Régime to a constitutional
system in his own country, France. If not implemented as a result of a
consensual governance outlook among the governing or dominant elites, reforms become
disruptive, and are usually initiated after a deep societal crisis, which is
perhaps not yet the case in Brazil, at least not in the same extension that those
that occurred in recently in Greece, in Argentina, and currently in Venezuela.
Could Brazil descend into the chaos that those countries
were, or are today? Not of this kind, at least in the foreseeable future, although
disruptive events cannot be at all excluded. What instead could happen in
Brazil would be a protracted crisis made of low growth, partial or imperfect
sectorial reforms, and a clear loss of legitimacy of the three branches of
government. Worse, the current political mess in Brazil offers plenty of raw materials
for all types of dark humor, that is political jokes of a derogatory nature
against government and State institutions. In fact, political humorists in
Brazil do not need to invent or create anything, do not have to have any
inspiration for their jokes: all they need is offered on total freedom and
gratuity by the official institutions and their representatives. To be true,
those public figures constitute an unfair competition and an informal
concurrence to professional humorists. That’s not a joke, it’s a political
tragedy!
Paulo Roberto de Almeida
Brasília, June 12, 2017
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