Brazil Congress votes 'no' on wage cuts

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THE VOTE last week by Brazil's Congress to reject heavy cuts in wages demanded by the IMF has disrupted the bankers' timetable to bail out the debtridden Brazilian economy.

The wage-cutting issue is crucial not only for the internal politics of Brazil - which owes a staggering $95 billion to the bankers — but also for Brazil's relations with the International Monetary Fund and thus for the whole world financial system.

It has become a key test of the IMF's ability to enforce its demands - and thus those of the Western bankers - on Third World and debtor countries.

Since it was introduced to head off a mass strike movement in 1979, Brazil has had a system of wage indexation whereby pay increases are granted every six months in line with the official inflation figures.

The system has loopholes, because the official inflation figures do not reflect the real rise in the cost of living as a working class price index would. It has also been accompanied by rigid controls over union action to win any pay rise above the cost of living increases.

Nevertheless, it is too much for the IMF. In line with IMF demands, the government introduced a decree to cut the cost-of-living pay rises to 80% of the inflation figure. At a time when inflation is something over 250% a year, this means serious cuts workers' living standards.

Rebounded

The military-dominated government's tentative moves towards political liberalisation have rebounded on it. The highly-manipulated Congress has proved to be not manipul ated enough, and produced a majority against the decree.

The rejection of the wage- cutting law was followed by the immediate decree of a revised measure which leaves alone the poverty-line wages of two thirds of the working population, but imposes cuts of between 5% and 70% in the indexation of wages and salaries which are more than five times the minimum wage of £23 a month.

Substitute

The IMF has yet to state whether or not this proposal is regarded as an acceptable substitute for an across-the-board cut in wages.

But last week's resistance by Congress to the initial package - like the contortions of the Argentine ruling class as they grapple with the country's vast debts - reflects a strong popular resistance to the imposition of brutal cuts in Latin American living standards at the behest of bankers in London, Paris and New York. Robert Lean at the press conference having had to confront people in Castlereagh, implicating them on a range of serious charges, Lean said:

"I felt sick after seeing those people. I didn't think very much of myself, but I had to do it. They said if I didn't confront these people 1 would go to jail, so obviously I took what I thought was the easy way out"

"I am not, and never was, a member of the IRA. I'm a member of Sinn Fein, I was a member of Sinn Fein".

"My intentions were always to withdraw. I knew from the start I would always retract and I knew that when the opportunity arose I would take that opportunity and that the people in there would be released"

Influence

An essential ingredient which largely contributed to Lean's retraction was the positive influence of his wife Geraldine who had been in custody with him since September 6 and who returned home with her children just three weeks ago. Lean said that