The Rolling Coup: How Michel Temer is Turning Brazil into a Banana Republic

In December, 2017, Gabriel Souza, a São Paulo vocational school student, fell and hurt his back while working at his job at Burger King. When he brought a doctor’s note authorizing medical leave to his employer he was was fired. He went to the local labor courts to sue and was told that, due to the new laws, if he lost the case he would be responsible for paying all legal costs. Gabriel’s story is an example of one of several that I have heard informally within my circle of friends during the 6 months since illegitimate president Michel Temer reformed Brazil’s labor laws. As in the case of other countries in Latin America where US-backed neoliberal regimes have taken power, the structural adjustments have happened so fast that that the citizens are still struggling to find out how they will be affected by them. The Brazilian social welfare state, which started with Getulio Vargas’ workers rights legislation and the nationalisation of key industries in the 1930s, and was significantly strengthened during the 13 years of center-left PT party rule, (2003-2016) is being dismantled in record speed. While too much has changed to document everything in the space of a single article, the following 12 changes made since Military Dictatorship era public prosecutor and US informant Michel Temer took office on August 31, 2016, have helped transform Brazil from a rising nation with a growing middle class into a democratically-weakened US puppet state.

Labor Law Reforms set worker rights back 80 years

Starting with President Getulio Vargas in 1930, Brazil was one of the most progressive countries in the Americas in terms of labor rights. Every Brazilian citizen had the right to a labor card. After a 90 day provisional period, employers were forced to either lay off the worker or sign the labor card. Once the card was signed, workers had the right to benefits such as compensation for transportation to and from work, free lunch, one month paid vacation per year, paid maternity and paternity leave and a generous mandatory severance package in case of firing, which lowered stress levels by generating a climate of job security. Employers were only allowed to hire temporary workers for a period of up to 6 months. If a worker was unionized, a small deduction was made from his or her paycheck and given to the respective union. In 1941 Vargas established a labor court system that provided free legal assistance to workers who wanted to sue their employers for labor rights violations.

On July 11, 2017, Temer ratified a new labor code, which critics, like Labor Judge Magda Biavaschi, say brings labor rights back to the 19th Century. Lunch breaks are reduced to 30 minutes and, due to new laws regulating autonomous workers, who receive none of the legal benefits conferred by the labor card, there is no longer a 6 month limit on how long they can be employed. Mandatory labor union deductions have been eliminated and workers can now negotiate collectively with employers without unions. Furthermore, employers are now allowed to keep workers on permanently in a state of intermittent employment, meaning that they can invite them in to work only on days that they need them, with none of the labor rights guaranteed to permanent employees. Although the Labor Court system continues to operate, the new labor laws mandate that if an employee loses a case against his employer he is required to compensate for all legal costs of the proceedings, basically eliminating the right of the average worker to sue.

The immediate results of the new labor laws were tens of thousands of layoffs across the country, as companies capitalized on the new opportunity to hire autonomous and intermittent workers. Estacio de Sa University is one example. One month after the new labor laws were passed, it fired 1200 university professors and hired replacement, intermittent workers, who will not be paid during school vacation periods.

For the first time ever, Brazil lowers its minimum wage

When Lula was elected, the Brazilian minimum wage was equal to USD$49/month. He enacted a policy of annual above inflation minimum wage hikes. According to a huge study conducted by IPEA (Institute of Applied Economic Research) these minimum wage increases were the most important causal factor of 36 million people rising above the poverty line during the PT years. For the first time since Getulio Vargas created it, Michel Temer lowered the minimum wage for 2018, from R$969 to R$954/month, after a year which had seen an official inflation rate of 3%.

Brazil’s first All White, Male Cabinet since the Military Dictatorship

Brazil has a long history of gender imbalance in public office. Although Dilma Rousseff did not achieve gender parity in her cabinet, she appointed 9 women out of a total of 37 ministries. One of the first actions that Michel Temer took upon assuming the presidency was to fire them all and establish the first all male cabinet since the Military Dictatorship era.

Destruction of important Government Ministries

While running for president in 2002, Lula promised the Brazilian people to perform a tightrope act that would aim to please the business sector and international capital while simultaneously enacting income redistribution programs and support for small businesses. This position is exemplified by his government’s relationship with the agricultural sector. They subsidized export-geared, mono-culture production, primarily through the Ministry of Agriculture, while using the Ministry of Agrarian Development to support family farmers through subsidized credit, technical support and innovative laws such as PAA (Programa de Aquisicao Alimentar/Food Acquisition Program) which obligated public schools and hospitals to purchase all of their food from local family farmers. During an average fiscal year during PT rule, 2012, the Federal Government gave around R$13 billion in subsidies for agribusiness and R$12 billion, split between the MDA and the Ministry of Agriculture, to family farmers. One result of this was that before the coup, most food consumed by Brazilian citizens was still produced by family farmers.

When Michel Temer took office, he eliminated the Ministry of Agrarian Development. He also disbanded the Ministry of Woman’s Rights, the Ministry of Afro-Brazilian Rights and the Ministry of Human rights. These Ministries previous functions were downgraded to Secretariat status and had their budgets decimated. For example, the peak funding level of the PAA program was R$839 million in 2012. Temer cut funding to R$439 million in 2016 and R$150 million in 2017 and is now threatening to end the program completely. Important human rights programs are suffering similar cuts and cancellations. The hypocrisy was glaring when he raised judiciary salaries by 41% and absolved R$20 billion in back taxes owed by Itau Bank while cutting support for women victims of domestic violence from R$42 million to R$16 million with the excuse that the government could no longer afford it.

Massive Petroleum Hand-off to European and American multinationals

Shortly after the Coup, top officials from the PSDB party flew up to Washington to meet with US State Department Officials. Immediately afterwards, Michel Temer announced a privatization of a large portion of Brazil’s massive offshore pre-salt petroleum reserves. As the Chevron backed think tank AS/COA and its journalist staff fed misinformation to the American press denying that a coup had just taken place, Michel Temer announced the auction of billions of dollars worth of oil at vastly below market rates.

On December 5, 2017, he signed Decree number 795, which will provide an estimated USD$330 billion in tax abatement for foreign oil corporations. The main beneficiaries are Shell and Chevron. Not surprisingly, very little criticism of this measure appeared in the northern Corporate media.

On January 3, 2018, the Department of Justice-backed Lava Jato investigation team awarded USD$3 billion to American shareholders in Petrobras, the mixed-ownership Petroleum company that had been targeted and crippled by the investigation. Ostensibly compensation for losses incurred by bribery within the company, the amount handed over represents 6 times the amount of confiscated bribes and is a value superior to Petrobras entire 2017 profits.

1.2 Million poor families removed from Bolsa Familia Welfare System

Building and deeply expanding on earlier programs, President Lula created a conditional cash transfer program called Bolsa Familia in 2003, in which poor families receive a small monthly income supplement ranging between $30-60 USD/month, if their children stay in school and receive regular free doctors' exams. The effect of this program on poverty reduction during the PT government years has been exaggerated internationally by groups like the World Bank, which likes to deemphasize the benefits of minimum wage increases, but IPEA showed that it was the third largest causal factor in poverty reduction during the PT years.

However, in a country with hundreds of years of history of famine and malnutrition, Bolsa Familia had a significant influence on the large reduction in hunger and growth stunting among Brazilian children. Since taking office, the Temer government removed 1.2 million families from the program, and stalled entrance into the program for 500,000 poor families who are on the waiting list.

Dismantlement of poverty eradication programs in the Semi-arid northeast

The Brazilian northeast, home to 50 million people, has been plagued by crippling droughts for centuries that cause cyclical hunger crises in this historically poorest region of Brazil. From the 1950s to the 1990s, droughts caused millions of poor north-easterners, including Lula’s family, to migrate to the southeastern cities, as places like Rio and Sao Paulo saw their populations swell by as much as 500%. During the 1990s a coalition of environmentalist agronomists and activist organizations formed the Articulacao do Semi Arido (ASA). They conducted studies and concluded that, although cyclical droughts are a natural phenomenon, their effects on the poor were heavily exacerbated by local political machines that funneled public funding into private dams, lakes and ponds, concentrating water in the hands of local political families who would give water away for free during election years and charge exorbitant prices for it during non election-year droughts.

The ASA came up with a series of recommendations, including rainwater capture and introducing crops and domestic animal species that were more adequate for the local climate. When Lula came to office, he adopted the ASA recommendations as policy and hired many ASA leaders to his staff. Over the next decade they built one million rainwater capture systems for poor families in the region, significantly changing the local political power dynamic. This water security, together with the minimum wage hikes from R$200 to R$880/month, a policy which mandated that retired workers receive at least minimum wage and the Bolsa Familia program, was an important causal factor that contributed to lifting 20 million people above the poverty line in the northeast. Since Michel Temer was elected, the rain water capture policy has ground to a halt and old policies to concentrate control over water in the hands of a few local political families are returning to the area. During the last round of elections, local strong men from Temer’s PMDB party were seen sending water trucks into poor neighborhoods to give away “free water”.

An Estimated 12.6 million people fall below the poverty line

During the PT years, 36 million people rose above the poverty line. Starting in 2014 Brazil suffered a recession. As the recession grew, corporate media companies in the anglophone North, fed by a barrage of misinformation from corporate think tanks such as the Rockefeller family’s Americas Society/Council of the Americas rushed to blame it on corruption. The fact is that, although the recession was originally triggered by the Rousseff administration's miscalculation of the SELIC rate, it was greatly exacerbated by economic sabotage in the lead up to the coup caused by the US-backed Lava Jato investigation.

Unlike in Northern countries where corrupt corporations like Goldman Sachs and Seimens are considered too big to fail and receive government support during corruption scandals to guarantee that operations continue normally, in 2015 the Lava Jato investigation paralyzed Brazil's 5 largest construction companies, causing an immediate 500,000 direct job losses and, according to an economic study cited by the BBC, a 2.5% GDP reduction in 2015. While there are certainly macroeconomic factors at play in the 9 million Brazilians who fell below the poverty line in 2015 and 2016 and the estimated 2.5-3.6 million who fell below the poverty line in 2017, slashing funding for social programs and removing 1.2 million families, (around 4.2 million people) from the welfare system, has certainly exacerbated the problem.

Constitutional Amendment freezes Public Health and Education Spending for 20 years

Michel Temer worked closely with conservative allies in Congress and the Senate to pass a constitutional amendment freezing the spending on the already underfunded public Health and Education systems for 20 years, a period in which population is projected to grow by 27 million. A recent study estimates that, due to the new laws, the education system will lose an estimated R$25 billion per year during this period.

Decimation of Science and Technology Research

One of the cornerstones of developmentalism is to expand a nation's capacity for scientific research. In 2011, Dilma Rousseff created a program called Sciences Without Borders, which provided full scholarships for 101,000 science and engineering students to study at the best universities in Europe and North America. In 2017, Michel Temer cancelled the program, claiming that the government had run out of money for it. That year he also cut R$1.71 Billion from the Federal Ministry of Science, Technology and Innovation, which funded important studies in fields like stem cell research and nanotechnology. R$1 Billion of these cuts were taken directly from grad school scholarships and stipends for 176,000 students.

A fatal blow to the National Cities Conference Assembly System

When Lula took office in 2003 he created a new ministry to oversee urban programs called the Ministry of the Cities. In a pioneering move, he passed deliberative control over the Federal urban budget to an enormous people’s assembly system, with guaranteed majority representation of the poor and working class. Cities across the country held local popular assemblies in which voluntary delegates were elected to represent them at the state level. State level assemblies were held to elect 5000 delegates for a national assembly which took place every three years called the Cities Conference during which they met in Brasilia to vote on federal urban legislation and elect voluntary councilors, who would meet in Brasilia every three months during their mandates to vote on Ministry of the Cities policies.

Although the amount of power held by the councilors and delegates was curtailed in 2005 when Lula expanded his governing coalition to included conservative political parties as a response to the Mensalao scandal and the Ministerial post was handed over to members of other political parties, there were still significant victories made by the men and women of the council. Initiatives that were pushed through by the Councilors and Delegates include: 1) a $1 billion fund for self-managed, self-constructed social movement housing; 2) A national sewage law which prevents further privatizations; and 3) A national transportation law which obliges city governments to prioritize pedestrian and bicycle traffic and public transportation over the automobile.

Although the National Cities Conference system lost power over the years to coalition politics it remains as one of the largest people’s assembly systems in world history. On June 7, 2017, Michel Temer issued a decree to cancel the 2018 National Cities Conference, enabling the government to abandon the election system for councilors and appoint them directly.

Constitutional Amendment makes it easier for Agribusiness to Steal Land

Brazil is one of the most unequal countries in the World and and an important cause of this problem lie in its incredibly unequal land distribution in the countryside, which has its roots in slavery. During the 1980s, the Movimento de Trabalhadores Sem Terra (Landless Workers Movement/MST) fought to include language in the 1988 Constitution that guarantees the right for landless farmers to occupy small parcels of land in the countryside, generally up to 40 hectares depending on the biome, that are not being used productively, and through this have been able to get land deeds for 350,000 families.

The fact that they are frequently treated as criminals by the Brazilian media, judiciary and plantation owners is ironic because almost all large ranches and plantations in Brazil are situated on land that was originally stolen in a process called grilagem. Grilagem is a process in which someone buys, say, 10 hectares of land and builds a fence around 1000, often hiring gunmen to kick everyone who is living on it out by force. He then alters the deed to make himself appear to be the legitimate owner. When this process exacerbated during the 1950s and 1960s, millions of landless rural workers were forced to migrate to the big cities in the Southeast.

On July 11, 2017, Michel Temer issued decree number 759, which greatly reduces penalties for large landowners who steal land. The new law increases the limit for avoiding criminal charges from 1500 to 2500 hectares, and moves the amnesty date for the crime forwards from 2004 to 2011. According to Greenpeace Brazil’s Márcio Astrini, the main effects of this new law will be felt in the legal Amazon region, where ranchers and Agribusiness companies like Cargill are producing a large percentage of the soybeans and beef consumed in North America and Europe.

What comes next

The unravelling of the Brazilian social welfare system and assault on human rights is an ongoing process. As Luis Gonzaga Gegê da Silva said in a recent interview, the coup is being enacted on Brazilian workers on a daily basis and, in fact, is only just beginning. The list of laws going through Congress is long, but two of them that are currently circulating are worth mentioning here.

The first is a bill, pushed by the powerful and conservative evangelical Christian lobby, that aims to criminalize abortion - already illegal in most cases - for rape victims. Although Dilma Rousseff has publicly criticized the bill, Michel Temer has given no indication that he will veto it. The second is a bill that, if passed would reform the retirement system. It is true there are abuses in the Brazilian retirement system, mainly involving elected officials, military officers and members of the unelected judiciary who are able in many cases to retire after two years of service and receive full pay for the rest of their lives, even passing it on to their unmarried children when they die. When so-called “liberal” newspapers like the Guardian and the New York Times talk about how important retirement reform is in Brazil, they commonly cite examples like this. Unfortunately, high ranking government officials, military officers and judges will be exempt from Temer’s proposed retirement reforms. The vast majority of the Brazilian working class will see their retirement age raise as high as 70, which is higher than the life expectancy in Maranhão and equal to the life expectancy in two other Brazilian states. Those citizens will essentially lose their right to retire.

During the period in which the center-left PT party won 4 consecutive elections before being removed from office in soft coup, some people in the Northern left labeled them as neoliberals who had sold out the Brazilian people in a similar manner to what the ANC did in South Africa. As I write in the conclusion to my new book, Voices of the Brazilian Left, this is an unfair assessment which I believe was generated by lack of Portuguese language skills, lack of knowledge of what the PT governments were doing on the ground and too much reliance on analysis from members of the tiny PSOL (Partido de Socialismo e Liberdade/Socialist Liberty Party) which, although vocally critical, is a faithful ally of the PT in the Brazilian Congress.

There is a consensus among the vast majority of the Brazilian left that the most viable strategy for undoing the damage that has been done to the Brazilian social welfare system and to human rights since the 2016 coup is to elect Lula for president in October, 2018. While there is much soul searching and criticism within the organized left about how it ended up in a position where Lula would be their only chance, he is currently leading all polls, with double the popularity of his nearest opponent, neo-fascist former Military Dictatorship official Jair Bolsonaro, an evangelical Christian who is running on an anti-gay, anti-woman, anti-Afro Brazilian platform. Last year a kangaroo court sentenced Lula to 9 years in prison for receiving illegal reforms on an apartment that prosecutors, working in tandem with the US Department of Justice, were unable to prove he ever either owned or set foot in.

On January 24, his case goes up to appeal in Porto Alegre in front of another US DOJ-backed legal team as part of the Lava Jato investigation which has routinely ignored much graver cases of corruption with much larger bodies of evidence against conservative politicians from the US-supported PSDB party, such as the recent discovery that two time former presidential candidate Jose Serra received R$52 million in illegal campaign contributions from the Odebrecht construction company. Under the banner of, “An election without Lula is Fraud” thousands of people from labor unions and social movements, including the MTST, are traveling to Porto Alegre on January 24 to show solidarity with Lula. The local mayor has declared protesting illegal on that day and officially requested for the Army to come in. The events, as they play out, will have serious repercussions for Brazilian democracy.

Disclaimer: The views expressed here are the author's personal views, and do not necessarily represent the views of Newsclick.