The numbers are almost too much to take in: 4,100 murdered this year. This figure does not refer to a war-torn country, but to São Paulo state: the biggest driver of Brazil’s economy.
As a report came out last week showing that Brazil had seen as many violent deaths—500,000—over the past 10 years as Somalia’s 20-year civil war, the death toll in São Paulo city continued to rise.
For a decade, violence in São Paulo had been steadily declining. But recent months have seen a bloody wave sweeping South America’s biggest city—driven by what experts says is a war between police and the Primeiro Comando da Capital (First Command of the Capital—PCC), a criminal gang based out of São Paulo’s prisons.
The PCC formed in 1993 to lobby for better prison conditions, and evolved into a wide-reaching gang involved in drug and arms trafficking throughout the state. Gang leaders use smuggled cell phones to give orders to members on the outside, while complicit guards switch off signal jammers. Clearly the system is working for them: according to police wiretaps heard by Folha de São Paulo, gang leaders recently held a 10-hour conference call to discuss business: buying and selling drugs in Paraguay and Bolivia; sending marijuana and cocaine to São Paulo; and setting up distribution to other states and potential investments with the inflows.
Protectionism made news again in Brazil recently, when Finance Minister Guido Mantega announced that Brazilian firms could avoid a 30 percent tax increase on the auto industry by improving fuel efficiency, using Brazilian-made parts and investing in Brazilian research and development. Foreign automakers without a manufacturing plant in Brazil will be subject to the tax hike, Veja noted.
The program is designed to encourage innovation in technology and fuel efficiency, Mantega argued. Any negative effect on foreign imported cars, he said, was merely collateral damage.
It’s no surprise he is feeling a little defensive.
Last month, Brazil and the United States had something of a war of words over trade issues.
First of all Mantega, in an interview with the Financial Times, called the United States’ latest round of quantitative easing (QE) “protectionist.” QE, which has been deployed liberally by the U.S. and other industrialized nations in response to the economic crisis, floods the market with dollars—which Brazil has complained drives up the value of the real, making Brazilian exports less competitive.
“Any country that manipulates its currency is practicing protectionism,” Mantega told the FT. “We don’t do that.”
The U.S. responded in kind, with a leaked letter criticizing Brazil’s announcement of plans to increase import tariffs on some 100 items, including potatoes, tires and x-ray equipment, with more tariff hikes expected to be announced this month.
After accepting the government’s offer of a 15.8-percent pay raise over three years, some 400,000 public-sector employees ended their month-long strike and returned to work on Monday. While the workers may have gotten what they wanted, popular patience with public sector workers and unions may be wearing thin.
The strikes started in May with university professors and in June spread to other sectors, causing widespread disruption. University students sat idle, wondering if they would have to repeat the academic year. Lines in airports were measured in hours, or kilometers, rather than minutes. Imports of food and medicines were stalled and visas delayed.
The public here has been historically sympathetic to organized labor; union resistance helped bring down the military dictatorship, and former President Lula da Silva, still wildly popular, started out as a union leader. But there are signs that, with these strikes, patience may have dwindled for a public sector that many consider too large and too coddled.
Folha has called repeatedly for a review of the right-to-strike laws, calling the strikes “excessive” and a “hazard to the population.” This aspect was not lost on the public: in an overpass above the main highway between Rio de Janeiro and São Paulo someone reportedly hung a sign that read, “Police station closed—free passage for drug trafficking and arms.” The dry humor belied a serious threat: a separate 10-day police strike in the northeastern state of Bahia in February was said to have caused a spike in murders on the streets of the capital, Salvador.
Época referred to the Brazilian public sector as “giant and inefficient,” in the first in a series of color spreads that indignantly detailed some of the “supersalaries” of some of the most generously paid public servants. (“It’s you who pays,” ran the headline.) Estadão published a feature on the human consequences of the strikes, citing allergic children who are not receiving the special foods they need, dengue prevention efforts for Indigenous populations that had been stalled, and patients who were forced to wait for urgent bone marrow treatment.
There is one story dominating the Brazilian headlines: The mensalão, a huge corruption case that could taint the legacy of former President Lula and the reputation of his Partido dos Trabalhadores (Workers’ Party—PT) to which his successor Dilma Rousseff belongs.
Certainly the scope is wide. With 38 high-profile defendants including former ministers, bankers and wealthy businessmen, 600 witnesses and, according to calculations by Globo, a slush-fund of more than R$100 million ($49.7 million) in public funds, the mensalão has been dubbed the “trial of the century” by commentators here.
Prosecutors charge that, from 2003 to 2005, public money was handed to some members of the ruling coalition as a “mensalão”—roughly translated to “big monthly payment”—to ensure their support on key votes. The money was allegedly moved through government contracts granted to private companies, which then redistributed the funds amongst legislators.
The defendants deny the accusations, originally made by whistle-blower Roberto Jefferson, president of the Partido Trabalhista Brasileiro (Brazilian Worker Party—PTB) who belonged to Lula’s coalition but did not support Dilma’s bid for the presidency. If found guilty of the charges, which include corruption and racketeering, the defendants could face prison terms of up to 45 years.
Late last month, the Mercosur alliance met, suspended Paraguay and ushered in Venezuela as a full member in almost as little time as it took the Paraguayan congress to impeach their former president, Fernando Lugo, the preceding week.
Venezuelan President Hugo Chávez’ bid to join the South American trade bloc had spent the past three years languishing in the Paraguayan congress, where lawmakers cited fears that Venezuela would violate Mercosur’s democracy clause.
With Paraguay’s new government suspended from the summit as a punishment for its own democratic misbehavior, the other full members—Brazil, Argentina and Uruguay—were quick to invite Venezuela in.
Since then, reports have been circulating that Brazilian President Dilma Rousseff was the driving force behind this decision. Soon after the summit, Uruguayan Foreign Minister Luis Almagro caused considerable diplomatic unease in saying that Uruguay had opposed Venezuela’s immediate entry, and only relented under pressure from Brazil.
Almagro maintained that although Paraguay was suspended, it was not expelled, and therefore retained its right to accept or veto a new member. Uruguayan Vice President Danilo Astori agreed, calling Venezuela’s entry during Paraguay’s suspension “the worst institutional wound” to Mercosur since its inception in 1991. Uruguayan President José Mujica publicly criticized his deputy for this outburst, and insisted that although Dilma had requested a meeting of the heads of state (without their deputies or foreign ministers) the decision to let Venezuela in had been unanimous.
Today’s Mercosur presidential meeting, in Mendoza, Argentina, is getting rather more international attention than it likely anticipated. Previously expected to be little more than tussling over tariffs and a perfunctory discussion of fiscal woes in Europe, the focus now will be Fernando Lugo’s sudden removal from the Paraguayan presidency last Friday.
Although Paraguay claimed to adhere to due legislative process, Lugo’s vice president Federico Franco was sworn in mere hours later, causing international observers to ask if the swift removal had, in fact, been a bloodless coup. In Brazil, use of the neologism “golpeachment”—a combination of the Portuguese words for impeachment and coup—quickly began to spread through social networking sites.
Condemnation came swiftly from Paraguay’s neighbors, leery of regional democratic instability following a series of bloody coups in the 1970s and 1980s. The Mercosur alliance—founding members being Argentina, Brazil, Paraguay, and Uruguay—suspended Paraguay from this week’s meetings.
Here in Brazil, the Foreign Ministry refused to confirm circulating reports that President Dilma Rousseff had drawn up “a menu of sanctions” against Franco’s government, and as the week wore on it looked increasingly likely that Brazil’s response would remain diplomatic. As Colin Snider, a professor of Latin American history, pointed out in an interview, Brazil’s ambassador to Paraguay was recalled “for consultations,” but not withdrawn permanently, “an important marker on the more moderate, ‘wait-and-see’ approach from Brazil.”
Mercosur member nations officially decided today not to impose economic sanctions on Paraguay; Argentine President Cristina Fernández de Kirchner (CFK) said that Mercosur doesn’t believe in sanctions because “they never hurt governments; they always hurt the people.” Brazilian Foreign Minister Antonio Patriota gave hints yesterday that he would advise against economic sanctions.
June 1: This AQ-Efecto Naím segment looks at sustainable cities in the hemisphere.