Averdade: Capitalist growth increases submission of Brazil to foreign capital

Amid the profound crisis which is the world capitalist system and that has dragged on since September 2008, some countries, specifically China, India, Russia and Brazil, the so-called BRIC countries have achieved economic growth rates to be high standards for the capitalists. In Brazil, this growth, albeit with ups and downs, led the country to become the seventh largest economy in the world and beyond Italy, mired in economic and moral crisis ¹.

With the election of Lula (PT) for the presidency of Brazil in 2002 and his decision to take no break with the imperialist system or renationalize privatized state and to guarantee the privileges of the large financial capital and free action for the international monopolies in the economy Brazil, a large international media began to extol the Brazilian economy as the newest wonder of the world.

But, as not everything that glitters is gold and almost everything that the media bourgeois state is a lie, there is no sea-colored pink in the Brazilian economy.

However, in this context of favorable propaganda and the expansion of Brazilian companies in Latin America, performing works and acquiring other companies, this movement supported and financed by the Brazilian government, some sectors have criticized the Brazilian expansionism and fear of a new imperialism in the region .

Some Latin American governments have even acted in order to halt the advance. In Argentina, the Mendoza provincial government suspended a project of potash exploration and mining company Vale, Peru, remains canceled the construction of hydroelectric Inambari, construction work of the OAS and the state Furnas and Eletrobras.

The thesis of a new imperialism in itself is nothing absurd. In fact, at the time of parasitism and decay of capitalist imperialism and during the crisis due to the law of uneven development, while most countries remains stagnant, you may experience some growth in some sectors of the economy and in some countries ². It is a growth that deepens inequality between countries and among various sectors of the economy, as Lenin said: “Certain industries, certain sectors of the bourgeoisie and certain countries, manifest at the time of imperialism, with greater or lesser extent either one or other of these trends. (Complete Works, volume 27, pp.444)

We see the current crisis, while the European Union and the United States have their economies increasingly mired in crisis, China, despite signs of slowing down, keeps an annual growth rate between 9 and 10%.

The history of capitalist imperialism throughout the 20th century is full of examples in this regard. Indeed, in the early decades of last century, England was dictating all the rules of the global economy. After World War I, Germany is growing again and demanded a new division of the world. The U.S. also had a great economic development and came to occupy a prominent place in the world economy. A new correlation of forces has emerged and a new World War came to redefine the areas of influence of the imperialist powers.

Today, in the first decade of the 21st century, China became a major power in the capitalist economy and disputes with the U.S. and other imperialist countries control over important markets in the world, including Latin America. In fact, we can assert that the current U.S. advantage in the global economy is maintained exclusively by blood and iron, or, more precisely, due to the monopoly of the dollar, the control of bodies like the IMF (International Monetary Fund) and World Bank , imperialist wars and powerful nuclear weapons.

However, a deeper analysis of the Brazilian economy found that the current economic boom in the country, as well as volatile and mainly benefit the wealthy classes, does not break the chains that bind him to the world imperialist system, but makes the country even more submissive to this system. In other words, economic growth in the last ten years did not alter the subordination of Brazil to international finance capital to ease the dominance of monopolies on the international economy. On the contrary, there was an amazing process of denationalization and even de-industrialization of the Brazilian economy.

Indeed, the vaunted Brazilian economy has its main base in the export of raw materials, especially agricultural products and minerals and not on industrial products and technology and the expansion of the internal market, thanks to a huge debt of the state population and .

According to the Ministry of Development, 2011 to August exports of primary products accounted for 44.27% (U.S. $ 55.822 billion) of Brazilian exports, while exports of manufactured goods were only 39.74% (U.S. $ 50.100 billion). The involution is clear: for the first time since 1978, the export of primary products (commodities) surpassed the export of manufactured ³.

Soybeans (beans, meal and oil), meat, sugar and ethanol, coffee and forest products represent 81.2% of Brazil’s agricultural exports. However, despite being a major producer and exporter of food, Brazil imports 65% of its fertilizer needs. Among the manufacturers, cars, produced in its entirety by multinational companies in the U.S., Germany, Italy and France, are 2.22% of total exports. Since iron ore exports is 12.63%, 7.92% and oil. Besides iron ore, Brazil is also the world’s largest producer of niobium and manganese.

In addition to this growth based on exports of primary goods, raw materials, there is also a process of deindustrialization.

In 1980, the share of manufacturing in gross domestic product (GDP) was 33%, today is only 16%. The relationship-manufactured exports, which reached 59% during the same period, pulled in 40%.

Another proof of de-industrialization of the Brazilian economy is revealed in the growth of the deficit country’s industrial. Between 2005 and 2010, the deficit of industrial goods fell from a positive U.S. $ 31 billion to $ 34 billion negative. In total, the deficit in foreign trade of industrial goods reached U.S. $ 65 billion. It is worth noting also that this deficit occurs in industry sectors of high and medium technological intensity, such as pharmaceuticals, consumer goods, electronics, computer and office equipment and precision instruments (Luiz Gonzaga Belluzo and Julius G. de Almeida , Capital Letter, 22/06/2011).

Only the aircraft industry had a surplus due to Embraer. However, remember that Embraer is not exactly a Brazilian company. Privatized in 1994, for only $ 154 million, the Company is controlled by the Pension Plan for Employees of Banco do Brazil – Previ – (14.2% of the shares), by BNDES (5%), the Government, (0, 3%) and bank Bozano (10.4%). However, 70% of Embraer’s stock investors are with the Stock Exchange New York Stock Exchange (NYSE acronym in English), and three investment funds with U.S. (Janus Capital Management, Oppenheimer and Thornburg Investments).

De-industrialization of the Brazilian economy is so great that the Minister of Science and Technology, Aloysio Mercadante said that Brazil sells 1,700 tons of soybeans or 21 500 tons of iron ore to buy just a ton of semiconductor China (Portrait of Brazil, No. 46).

This phenomenon has led some economists at the Economic Commission for Latin America (UN ECLAC), called this process “reprimarization” of the economy, that is, returning to the model that characterized the exploitation of Brazil and other Latin American countries during the period Colonial.

Professor of Economics at Unicamp, Cano Wilson, author of several works on the Brazilian economy and Latin America, summed up the situation: “We are singing with Chinese music. Singing to export chicken and soybeans and iron ore. But that future never given to anyone. The leaders agree that it is very nice to be exporting these things, but forget that industry is a regression. ” (Wilson Cano, Folha de S. Paulo, 12/6/2011).

Finally, Brazil exports more raw materials and imports of industrial products. Undoubtedly there is here no feature of an imperialist country.

The subordination of Brazil to international finance capital

“Imperialism is a worldwide system of domination and oppression, in which financial capital put the whole world.”

(J. Stalin, Foundations of Leninism, published by Manoel Lisboa).

Despite being the world’s seventh largest economy, Brazil is still religiously rewarding financial capital with high interest rates (the world’s largest) and allocating annually about 40% of everything he earns to pay the income of speculators, owners of the securities domestic and foreign debt. It also continues its privatization and denationalization companies, allowing free movement of capital in the country, a country of which the subsidiaries of multinational profits refer to their headquarters, and earnestly fulfilling the role of country supplier of raw materials and importer of industrial products. In other words, Brazil is undoubtedly one of the countries that are subjected to this world domination of finance capital. Evidence is not lacking.

Brazil has 352 billion dollars in international reserves, applied primarily in securities of U.S. debt. Unlike what is preached, these reserves, and only sufficient to cover 60% of the country’s needs, is no proof of vitality of the Brazilian economy, but rather a certificate course of submission to the imperialist system. Let’s see. Interest paid by the U.S. government for its debt securities are only 0.4%, therefore this application yields nothing to Brazil, although it is of great importance to the U.S. to maintain its spending on wars and subsidize their banks and monopolies broken. Moreover, to buy these dollars, the reserves, Brazil sold its public debt securities that are paid with interest rates of 11.5% per year, the Selic rate, fixed by the Central Bank. So, with the reservations applied in U.S. securities, the country loses no less than 40 billion dollars per year, equivalent to more than half the budget of Health

Not enough, the finance minister, Guido Mantega, argued with the other BRIC countries, buy debt of European countries: “We will meet in Washington and will discuss how to help the EU out of this situation” . (Reuters, 9/13/11). Recall that in October 2009, Brazil withdrew $ 10 billion IMF loan to the bankrupt and join the global effort to save failed banks and international monopolies. Let us also remember that this year to ensure the payment of interest to this select group of parasites, the government cut $ 50 billion budget, that is, cut social investment areas.

What greater proof of the subordination and total dependence on the current imperialist countries than bail them out at the expense of the misery of their own country.

The denationalization of the Brazilian economy

Debt and remittance of profits

An important aspect of the domination of international finance capital over the nations are the external and internal debts.

Well, according to Professor Maria Lucia Fattorelli, Audit of Public Debt in Brazil, the Brazilian debt is now at about $ 3 trillion and in 2010 consumed 44.93% of the resources of the federal budget, money that ceases to be invested in health, housing and education to ensure income for bankers. In fact, figures from the Central Bank show that domestic and foreign banks and investment funds they own 76% of domestic debt securities. In turn, external debt, and not be over, had a 43% increase, 2009 to 2011, and was $ $ 284.1 billion.

Also indicator of the degree of dependence of Brazil before the international financial system is the growth in remittances of profits abroad.

In 2010, Brazil sent abroad for profits of 30 billion dollars. In 2009, U.S. $ 25.21 billion, and a third of that amount, $ 7.45 billion came from income on financial investments. In the last twelve months, from July 2010 to July 2011, profit remittances amounted to U.S. $ 34.95 billion.

Thus, while the country’s economy grows, also grows the remittance of profits abroad, demonstrating how big the field of international monopolies on the national economy.

According to data from the United Nations Conference for Trade and Development (UNCTAD acronym in English), Brazil is the 5th largest foreign investment destination in the world. But beyond the capital invested in speculation, the other sectors that receive this money are the mineral extraction and acquisition of companies and services.

The denationalization of the Brazilian economy is still evident when one observes that the 50 largest Brazilian companies, 26 are foreign. In fact, more than half of Brazilian companies in leading sectors such as automotive, aerospace, electronics, computers, pharmaceuticals, telecommunications, agribusiness and mining are in the hands of foreign capital. Also according to the Census of Foreign Capital in Brazil, foreign capital is present in 17,605 Brazilian companies account for 63% of Gross Domestic Product (GDP), and has control of 36% of the banking sector and holds 25% stake in Bradesco and 20% of the shares of the Bank of Brazil. (Nazarene Lamb, Latin American Institute for Socioeconomic Studies).

Illusion Class

To mitigate this field of international monopolies on the national economy, the PT government decided to form “multinational yellow-green.” The bourgeois groups chosen were those with a high degree of influence in government and who generously funded the PT and its allies in the elections.

To form these multinationals, the state, and fund the combined company becomes a member of the project and articulates the state pension funds to do the same. In other words, the state acts as a true executive committee of the capitalist class. This is not something new, it was and is done by all capitalist governments of China to the United States. Recall that in the current crisis, States withdrew more than $ 30 trillion in public funds to bail out banks and private monopolies of the break.

The result of this policy was the formation and strengthening of private monopolies in some sectors such as telephony, civil aviation, refrigerators, beverage and ethanol.

One of these monopolies created yellow-green was the phone company HI. The stated aim was to compete in and outside the country with the multinationals in Spain, Portugal and Italy, which took control of telephony in the country after privatization. To this end, the government changed the existing legislation and public funding released very low interest. On April 25, 2008, HI new born, union of Brazil Telecom with HI, the Supertel yellow-green, owned by businessman Carlos Jereissati and Sergio Andrade and with 43.4 million customers. For this venture, the new HI, received from BNDES R $ 2.5 billion to make the business and $ 5 billion to finance investments in the new company.

However, as the bourgeoisie “has long played out the flag of independence” and “sells the rights and independence of the nation for dollars” 4, after two years, Portugal Telecom acquired control of the Brazilian company buying 22.4% stake. (Capital Letter, 08/04/2011)

Another case of multinational yellow-green was Ambev. In 1999, Brahma and Antarctica, announced the birth of AmBev, a Brazilian giant in the beverage industry that starts earning 10.3 billion per year. The new company came to market as the world’s third largest producer of beer and dominating 70% of the Brazilian market. This multinational ‘Brazilian’ began buying other companies in Latin America, such as Quilmes, Argentina’s largest brewer, in 2002. However, in March 2004, after several exchanges of shares and assets between Belgium’s Interbrew and AmBev, Interbrew announced that the multinational was majority shareholder of Brazilian brewer, with 71% voting interest and 51.6% of total capital.

New “national betrayal” funded by the government and, again, the dream of building a sovereign national economy with the great national bourgeoisie goes down.

The new gangsters of ethanol

In the case of ethanol, the situation is no different. Encouraged by the government, several foreign companies have joined the domestic mills to boost ethanol production and export of the country to meet U.S. demand for ethanol.

Today, 400 plants, most of them in the hands of foreign capital, control virtually all domestic production of ethanol and act as a cartel. As reflected in the price of alcohol this year even shooting in full the sugarcane harvest.

According to the Movement of Landless Workers (MST), foreign capital owns more than 30% million acres in the country to produce sugar cane, cattle and soybeans. Only in the alcohol sector, multinationals hold 33% of all land and plants. (Capital Letter, 03/08/11).

Petrobras also due to the 9478 Act of 1997, which broke the state oil monopoly, is now 51% of its capital under private control, and 35% of that capital is foreign. Not to mention that the National Petroleum Agency (ANP) and the Ministry of Energy Mines follow the policy of conduct auctions of our oil to the international oil companies.

To increase the participation of foreign capital in the country, the Federal Government sent for approval by Congress on April 20, a provisional measure (MP) to allow the increase to the current 20% to 49% of foreign capital in airlines Brazilian and decided to privatize the airports and ports by the end of the year.

The overexploitation of the Brazilian worker

In contrast to this situation, we have over-exploitation of workers and much of the population living in poverty. Although employment growth in the country, the minimum wage should be, according to Dieese R $ 2,279.00 5 is only R $ 545.00, the equivalent of $ 297.81 is a lower salary than that paid in Argentina ($ 475), Chile (U.S. $ 372) and Paraguay U.S. $ 410). In addition, the Brazilian worker has an extended working hours of the world when comparing the wage in Brazil with other countries, as shown in the table below.

To alleviate the growing poverty of the people, the Brazilian government has been developing since 2004, the Bolsa Familia program, which provides families who have minimum income a monthly stipend. Currently, 13 million families, about 70 million people are served by the program, aimed at households with per capita income of up to $ 140 – considered families in extreme poverty. Currently, each beneficiary may receive from $ 32 to 306 dollars per month. In 2004, 5.5 million families were assisted. So, instead of diminishing, increases the number of families because they did not work and need a decent salary grant from the government not to go hungry.

According to Census 2010, the Brazilian Institute of Geography and Statistics (IBGE), Brazil has 16.2 million Brazilians living in extreme poverty, 8% of the population. Of these, 11.4 million have incomes of $ 1 to $ 70 ($ 40) and 4.8 million have no income. Besides, 79 million people stay with family income below R $ 1,020 (U.S. $ 600) and 38% of young people living in extreme poverty, 50% of the population have no sewage and 80 million live with remuneration below $ 700 . Seven million families have no roof over their heads, and according to the Ministry of Labor and Employment, Brazil, in the XXI century, has 20 000 employees working in conditions analogous to slavery.

At the same time, a tiny group of people, owners of major industrial monopolies, and commercial banks, not to enrich. In the first decade of the 21st century, sales of the 200 largest Brazilian companies rose 534% between 2000 and 2010, reaching a gross revenue of R $ 587.9 billion (U.S. $ 270 billion).

As we see, economic growth follows recent Brazilian entirely tied to the chain of world imperialism and subordinate to international finance capital, and deepens the contradiction between a rich minority and the vast majority of Brazilian workers who suffer from low wages and poor working conditions.

This analysis confirms the Leninist thesis that it is not possible to oppose the reforms only with capitalism, it is necessary to modify the basis of the system, replace the system with one that is opposed to this, that is, that instead of relying on property deprived of the means of production, is based on collective ownership of means of production.

Lula Hawk, Central Committee member of the Revolutionary Communist Party of Brazil


¹ According to the IBGE (Brazilian Institute of Geography and Statistics) in 2008, the Brazilian economy grew 5.2%. In 2009, growth was negative, -0.6%, and in 2010, 7.5%.

For 2011, the Central Bank of Brazil predicts growth of 3.5% of Gross Domestic Product (GDP). Since the prediction of International Monetary Fund (IMF) in Brazil is 3.8%. Slower growth than expected for other countries in South America, as the IMF projects a growth of 8% for Argentina, 4.9% to 6.5% in Colombia and Chile. For China, the IMF forecasts growth of 9.6%.

² “The unevenness of economic and political development is an absolute law of capitalism” (Lênin. Under the slogan of the United States of Europe).

³ manufacturing and producing industrial goods from the raw material. For example, the cotton is produced jeans. The rubber tires are produced. Generally rich countries buy raw materials from poor countries and then manufactured to resell the product to the same country and others.

4 J. Stalin. Address to the 19th Congress of the CPSU. 1953: “Before, the bourgeoisie was considered part of the nation’s leader, defended the rights and independence of the nation, standing ‘above all’. Currently, there remains not the slightest trace of the ‘national principle’. At present, the bourgeoisie sells the rights and independence of the nation for dollars. The flag of independence and national sovereignty was thrown out. There is no doubt that this flag will be raised by you, the representatives of communist and democratic parties, and brought forward, if you will be patriots of your country, if you will be the driving force of the nation. No one can lift more.. “(Stalin’s speech to the 19th Congress of the CPSU)

The five Brazilian minimum wage worker would be R $ 2,278.77 in August, the second projection of the Department of Statistics and Socioeconomic Studies (Dieese). This value is 4.18 times the floor in place today, from $ 545. For the calculation of the minimum wage, the Dieese takes into account the amount necessary for the worker and his family defray the costs for food, housing, health, education, clothing, hygiene, transportation, recreation and welfare


One response to “Averdade: Capitalist growth increases submission of Brazil to foreign capital

  1. Pingback: Crescimento capitalista aumenta submissão do Brasil ao capital estrangeiro | A Verdade

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