[7/25/05] MST Update #95 The Crisis of the Republic: Manifesto of Economists for a New Economic Policy

Dear Friends,

Today we are sharing the Manifesto of the Economists for a New Economic Policy, which was launched today during the events that marked the Day of the Rural Worker.

National Secretariat of the MST

:The Crisis of the Republic: Manifesto of the Economists for a New Economic Policy

Everyone agrees that the Republic is in crisis. We also believe that the crisis is deep. But what crisis are we talking about? We believe that the New Republic, born over the ashes of the dictatorship in 1985 promising a better country, finally succumbed before the interests of the country’s ruling classes and died. The current crisis – political, economic, social, and ethical -- can only be resolved if the pillars of the agreement that sustained the transition of the dictatorship to democracy and which were protected and nourished by all the following governments up to now, were substituted by a program that meets the most deeply-felt demands of the people and restores the national and popular sovereignty that every Republic worthy of the name must possess.

The economic strategy that chose to fight inflation as the main political objective is completely weakened and broken, despite still having many defenders inside and outside of government. After numerous plans, the people are even poorer: Brazil is not the country that has the highest concentration of income in the world because an African country (Sierra Leone) is worse. Only last year, the number of millionaires – people with assets of more than US$1 million, grew by 7%. Currently almost 100,000 people control 50% of the country’s wealth.

The economic and political program conceived and initially applied in the government of Fernando Henrique Cardoso, and which still rules the country, needs to be drastically and urgently replaced. This program – originally known as the Plano Real and that currently goes by the name of “economic stability‿ – not only created millions of poor people but continues compromising the future of generations to come by handing over our territory, increasing the national debt and worsening the country’s dependence.
The austerity applied to the people, with systematic cuts in social spending and increasing resources destined to the payment of the internal and external debts, deepens the parasitic and predatory relation of national and foreign entrepreneurs with the Brazilian state. The increase in taxes is to pay the interest on the debt and this ensures safe profits to all those who invest in bonds of the public debt: bankers, entrepreneurs, and rentists of every type.Corruption of political parties and politicians is only the most visible face of a deeper process that can only be effectively corrected if the State is strengthened and de-privatized. Privatization and the weakness of the State are the main sources of corruption in Brazil!

The owners of power claim that exports can save the country but the truth is that this option forgets the vitality of the internal market and keeps salaries low as a condition to compete in the world market. Technological dependency is growing and the measures taken throughout this year to strengthen exports only increase the external, productive, monetary, and financial vulnerability of the Brazilian state.

But our main enemy is that which affirms the idea that there are no alternatives. Listed below, we are proposing a group of measures that point to the beginning of a national and popular alternative for the current crisis. They can and should be taken at this time in which broad majorities still defend structural changes for our country and support with brave and intense mobilization a program of a popular nature. If applied, they would inaugurate a new era for the majorities that will join without hesitation a long struggle to build a democratic Republic, destined to strengthen national sovereignty and overcome underdevelopment once and for all.

1. Lower the real interest rates (Selic) to the same level as that in the US and in neighboring countries of South America, such as Venezuela and Argentina or around 2.5% per year and not the current 19.75%. Control the interest rates charged by the banks to tradesmen and consumers that come to more than 100% per year.

2. Change the current policy of the primary surplus in the Federal Budget that designates vast public funds just to pay interest on the foreign debt. Apply the $R 80 billion collected by the government this year to investments that create jobs in education, family farming, Land Reform, health, and housing.

3. Double the minimum wage and the increase in pensions to $R454/month this year (2005) and raise them to R$566 next year, aiming to distribute incoming and improve the living conditions for the poor, thus honoring the commitments of the Lula government made during the election campaign.

4. Restore government and public control over the Central Bank and monetary policy, preventing the autonomy of the Central Bank which is already being adopted by its directors in collusion with the interests of bankers and international finance capital.

5. Do not sign FTAA and do not accept the rules of the World Trade Organization that affect the Brazilian economy and the interest of the people.

6. Hold a public hearing on the foreign debt, as the Constitution specifies, and renegotiate its value, which has already been paid many times over. Use the resources sent outside the country to pay the foreign debt to invest in education and social rights instead.

7.Change the current rules of readjustment for the tariffs of basic public services such as electric energy, water, telephone, and public transport. Revise and reduce the current tariffs that are prohibitively high for all Brazilians and favor oligopolies that have come to dominate the sector after privatization.

8. Immediately freeze the rounds of auctions for exploration of oil areas. Change Law 9478/97 to ensure the nationalization of oil with exclusive exploration rights for Petrobras.

9. Guarantee the participation of representatives of Brazilian society and of workers in all administrative councils of public and autonomous businesses at all levels: federal, state, and municipal.

10. Adopt a policy that protects national wealth, fighting the sending of dollars outside the country through transfers, super-invoicing of transnational corporations, profits, royalties, etc., guaranteeing their application in Brazil. Promote the repatriation of resources sent in a legal way, however illegitimate. Adopt the measures that protect our economy from external vulnerability.


1. Sidney Pascotto – President of the Federal Council on the Economy

2. João Pedro Stedile - MST, Via Campesina Brasil.

3. Reinaldo Gonçalves - Professor UFRJ and Council member of the regional Council on the Economy of the state Rio de Janeiro.

4. Paulo Passarinho - Coordenador Geral do Sindicato dos Economistas do Estado do Rio de Janeiro.

5. Nildo Ouriques - Universidade Federal Santa Catarina.

6. Dirlene Marques - President of the Syndicate of Economists of Minas Gerais and Coordination of the Minas Gerais Committee of the World Social Forum

7. Luiz Filgueiras - Professor of the Federal University of Bahia-UFBA.

8. Ronaldo Rangel – Council of COFECON.-Federal Council of economists

9. Caio R. M. Camargo - UNICAMP/post-graduate.

10. Prof. Dr. Edmilson Costa - PCB.

11. Krishna Mendes Monteiro - UNICAMP/Masters in Political Science/IFCH.

12. José Antônio Lutterbach - President of the Regional Council of Economy of the state of Rio de Janeiro.

13. João Manoel Gonçalves Barbosa - Vice-President of the Regional Council of Economy of the state of Rio de Janeiro

14. Wellington Leonardo da Silva - Director of the Syndicate of Economists of the state of Rio de Janeiro

15. Antônio Melki Júnior - Director of the Syndicate of Economists of the state of Rio de Janeiro.

16. Carlos Henrique Tibiriçá Miranda - Director of the Syndicate of Economists of RJ and Adviser of Corecon-RJ.

17. Maria Neusa Costa - Vice-President of the Syndicate of Economists of the state of Minas Gerais.

18. Concessa Vaz de Macedo – Professor of the Department of Economic Sciences of the Federal University of Minas Gerais.

19. Severo de Albuquerque Salles – Autonomous University of México.

20. Reinaldo A. Carcanholo - Professor of UFES.

21. Fábio Marvulle Bueno - Masters IE/UNICAMP.

22. Francisco Carneiro de Filippo - Masters IE/UNICAMP.

23. Luciane Bombach – Masters in Social Economy and Labor from Unicamp.

24. Fernando Henrique Lemos Rodrigues – Masters in Economy IE/UNICAMP

25. Angélica Soares Gusmão – Masters in Social Policy/UFES and Director of Administration and Planning for the City of Cariacica-ES.

26. José Bezerra de Araújo - Professor of Brazilian Economy of the Federal University of Campina Grande.

27. Ana Carla Magni – Masters in Social Economy and Labor at IE/UNICAMP, economist of DIEESE and Professor of the Faculties of Anhanguera Educacional. -SP

28. Rosa Marques- Professor PUC-SP

29. Carlos Eduardo Carvalho- Professor PUC-SP

30. Jose Juliano de Carvalho- Professor FEA-USP

31. Rafael da Cunha, President of the syndicate of economists of Rio Grande do Sul

Translated by Friends of the MST volunteer Charlotte Casey