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Soft coup in Brazil, impending recession in Mexico

2020-04-06 | South America

As Covid exposes the fragility of the US economy and institutions, columns and messages in the international press announce the end of the "American century" in the Americas. However, the regional giants -Mexico and Brazil- are even more distressed by a crisis that fuses the impending health disaster with a paralysis of export markets and political chaos.

The Paulista bourgeoisie knew from the beginning of March something more than immediate gains were at stake: the president of Petrobras warned of the imminent crisis in oil export revenues while the entire country was plagued by workers' strikes demanding safety measures or the shutdown of non-essential production. The state of São Paulo, which produces 80% of Brazil's GDP, declared on the 22nd that non-essential economic activity would be confined and closed down.

Bolsonaro at first joined the game. But in his own way. Hand in hand with Economy Minister Guedes, head of the pro-US wing of the government and a liaison with Chile's Pinochetism, he introduced a law allowing companies to close down for four months without paying salaries. In less than 24 hours he was forced to repeal it. From then on, his strategy was purely and simply to deny the danger of the epidemic.

Bolsonaro's appearance on the national TV channel, saying that Covid was like a "common cold", toured the world. It was not an error of appreciation. When a week later he called for a halt in the confinement decreed by some states by attacking his own health minister, he made it clear that the point was to ignore the spread in order to get the workers back to work as soon as possible.

Meanwhile, the divide with the military wing, which advocates balancing trade relations with the US with a strong relationship with China, grew. Bolsonaro's messages were taking on an increasingly racist and anti-Chinese tone, prompting protests from Beijing. Such messages have not stopped. Just today there was a tweet from the minister of education -also from the Guedes Wing- endorsing a conspiracy theory whereby China is the beneficiary -and by implication the cause- of the epidemic.

General Braga Neto, "acting president" of Brazil from his position as Head of the Civil House of President Bolsonaro.

In the "Palacio da Alvorada", the president's residence, sabre rattling could be heard . Quickly, Bolsonaro softened his discourse on the Covid and chose the chief of staff, General Braga Neto, as "Head of the Civil House", the Brazilian equivalent of a prime minister . The appointment was communicated in a joint message from the military chiefs of the armies and the elected one himself. The ghost of a de facto military junta was once again haunting Brasilia.

Apparently the military themselves leaked an internal document , immediately published throughout the continent , where one could read that "while the crisis situation lasts (due to the impact of the Coronavirus) the Operational President of Brazil will be General Braga Neto". The "soft coup" seemed to be consummated this weekend.

But yesterday, Bolsonaro, taking advantage of a meeting with religious leaders without the press, made a mockery of the agreement with the military. Obviously he could not attack them directly, but he launched a new attack on his health minister, threatening to dismiss him and supporting on Twitter the messages of other ministers of the Guedes wing about the alleged uselessness of the confinement .

Today, Datafolha, the statistics company of the newspaper La Folha de Sao Paulo showed that the battle for public opinion is far from over. The health minister is gaining public support , but Bolsonaro still has 59% of supporters who do not wish to see him removed .

In fact, in this story that could end with thousands of dead and sick people, Covid is, for the factions of the Brazilian ruling class, more than a bargaining chip. The growing difficulties of exports due to the global impact of the pandemic and the rise of class struggle in the workplaces have only aggravated and accelerated the fracture, present since the first months of Bolsonaro's government, between pro-US sectors and those who support balancing the relationship with Washington with an alliance with China. And it is far from being toned down.

Mexico and AMLO

Mexico: «Coronavirus is not an emergency» says the poster distributed by the government.

Brazil's similarity to Mexico is relevant. For months it had been clear that the equipment and personnel of the Mexican health system were insufficient to deal with an epidemic. AMLO, like Bolsonaro, knew this and chose to play down the potential damage caused by the epidemic. The objective was also to reduce the damage of a potential confinement on business profits by leaving most of its population to its own devices.

As in Brazil, the fall in oil prices hit the export balance hard. Combined with an explosion of contagion... the situation of Mexican capital was becoming more and more precarious. So finally AMLO gave way to some "sporadic" measures against the spread by promising 200 million dollars for hospitals... and yesterday he presented an economic plan that is actually an austerity plan in which he promises, among other things, not to collect VAT and not to increase the public debt.

In practice, the call to turn the health crisis into a massive transfer of income from labor to national capital is materializing from day one as a wave of layoffs and 20% salary cuts for those who continue to work.

What comes next?

Health personnel in Yucatan striking to request means and measures of protection.

We could not expect anything else from a ruling class, which has never hesitated to sacrifice workers to sustain profits and whose incompetence to guarantee even the basic conditions of exploitation of our work is multiplied by the chaos generated by the internal battles of the bourgeoisie and its quarrels with the petty bourgeoisie. The situation is extremely dangerous for workers throughout America. Only the generalization of the struggles can impose the priority of saving lives instead of investments, stopping the spread effectively and guaranteeing the satisfaction of basic needs for all workers.