Death Driven: Brazilian Government’s Response to COVID-19 in Times of Austerity
Thiago A. Feital
"Plan A is expenditure control, B is privatization, and C, tax increase." With these words Henrique Meirelles, Brazilian Finance Minister, outlined the position of Michel Temer's interim government over one of the most sensitive points of the political debate in 2016. To get a dimension of the importance of the fiscal debate back then, one need only remember that in that same year Dilma Rousseff was removed from office by an impeachment process, whose accusation related precisely to the management of public finances. The president was accused of issuing decrees to open credit without the authorization of Congress, which in Brazil is a crime susceptible to impeachment.
Reassuring neoliberals and neoconservatives, in that same year, Brazilian National Congress implemented plan A, approving (by 366 votes to 111) the so-called "ceiling of public spending amendment". The "mother of all austerity plans" amended the constitution to limit spending on public services and investments by the inflationary variation over 20 years. Since most government spending on basic services is mandatory, for practical purposes the amendment forces the government to reduce investments so as not to exceed the ceiling. In 2017, the amount invested by the three federation layers (1.17% of GDP) was not enough to guarantee even the maintenance of the existing infrastructure. Furthermore, the amendment fostered competition among social rights that began to dispute the scarce resources ("Education against Health, Science against Culture, My Home, My Life against Bolsa Família [Family Grant]").
The elaboration of the EC-95 was not far from the usual practice in the implementation of austerity measures in Latin America. Presented as an unavoidable measure, against the recommendations of the UN Committee on Economic, Social and Cultural Rights, the government has not demonstrated that it has examined the available alternatives, failed to present an analysis of the measure's impact on vulnerable groups, and did not submit his studies supporting the measure to independent groups for review. Despite this lack of dialogue, several organizations have publicly rejected the EC-95, such as Oxfam, Center for Economic and Social Rights, Inesc and FIOCRUZ, seeing it as a violation of the minimum core of International Covenant on Economic, Social and Cultural Rights.
According to the special rapporteur on extreme poverty, Philip Alston, “[…] EC-95 has all the characteristics of a ‘deliberately retrogressive measure’.” Reducing the resources available entails retroaction, especially in relation to the right to health, since maintaining the universal Brazilian Unified Health System (SUS) is costly. The EC-95 also violates the obligation to use the maximum of available resources (MAR), since the Brazilian tax system is extremely regressive and prone to exonerations that favor corporations. As Magdalena S. Carmona argues, strengthening revenue-raising through taxation is necessary to observe MAR. And the lack of measures aimed at making the tax system more progressive and efficient may indicate "unwillingness (rather than inability) to use its maximum available resources". However, the mobilization of civil society was not sufficient to repeal the EC-95 which remains in force.
It is in this financial context that Brazil was hit by COVID-19. In order to cover the expenses necessary to face the epidemic, the country that had already announced a growth projection of 0.02% of GDP for 2020, has recently declared a state of public calamity. The measure allows the federal government to increase public spending and exempts it from meeting the fiscal targets. As if the financial problem were not serious enough, the pandemic itself has been minimized — which is an understatement — by Jair Bolsonaro. The president recently said it was "a little flu", "a bit of a cold". On another occasion, he claimed that Brazilians should not worry, because they would not be hit as hard as people in other countries, since "Brazilians never catch anything" even when they jump "into the sewage". Still more harmful than the president's public outbursts of ignorance has been his lack of coordination with state governments, whom he accuses of "hysteria" in the adoption of quarantine measures.
Opposing the federal government's inertia, on March 26th the Brazilian Chamber of Deputies approved a bill granting basic emergency income of 600 reais to low-income people and informal workers. The amount rises to 1,200 reais for mothers that are the only breadwinners. This is an important step for a country that has 38 million informal workers who will find themselves without any source of income soon. But it's not nearly enough.
Given the likely collapse of the public health system, which according to the Ministry of Health's forecast may occur in April, the project has reignited the debate on the importance of economic and social rights in Brazil. It is noteworthy that universal basic income, a proposal practically ignored outside academic circles, but championed for many years by Eduardo Suplicy, has slowly reached the mainstream news. The coronavirus pandemic has also revived the debate over fiscal consolidation and the EC-95.
On March 18th, human rights organizations submitted to the Federal Supreme Court, STF, (Brazilian constitutional court) a request to suspend the effects of EC-95. The request seeks to enhance the response capacity of governments and prevent the said collapse. As inequality in Brazil, one of the most unequal countries in the world, has recently worsened, proposals to confront the pandemic must be integrated in the solidarity constitutional pact. The latest bill to introduce a tax on large fortunes provides an opportunity to further debate the relationship between taxation and human rights. The occasion demands, more than ever, that we revert the undermining of economic and social rights caused by the now consolidated litany of austerity. The best liberal economists have already suggested reconsidering the spending ceiling.
When Bolsonaro says "sorry, some will die" or when entrepreneurs affirm that Brazil cannot stop because of "5 or 7 thousand people who will die" or even when people — encouraged by the federal government's clandestine campaign #BrazilCannotStop — do motorcades demanding to reopen businesses, it becomes clear that economic and social rights are, after all, a means of distributing the resources needed for the livability of life, “prerequisite for the enjoyment of all other human rights”.
To break with the mentality that it would be necessary to "dehydrate the Constitution" (a quote of the current president of the STF, ironically the body entrusted with overseeing the 1988 Constitution) is today, more than ever, a matter of life or death.
Thiago A. Feital is a professor of Tax Law and a PhD candidate at Federal University of Minas Gerais Law School. Email: thiago.feital@mcampos.br Twitter: @FeitAlv