Forwarded from Nestor (Lula)

Louis Proyect lnp3 at
Fri Nov 1 11:55:54 MST 2002

The article on Lula´s Hobson´s Choice (honoring debt payments vs. honoring
the requirements of the Brazilian population), aimed as an attack against
the "participatory budget" tactics, is good in general (although
participatory budget practices have not been _that_ wrong).  It would be
mistaken, however, to simply place the issue at the "reform / revolution"
level, which I fear is partly what the writer of the article is thinking of.

Lula´s government will of necessity be "reformist" at first. The actual
correlation of forces does not allow to much more than that, and this should
be understood while building the tools to overcome reformism, which should
by no means become an end in itself, but simply a step ahead towards deeper
measures. If we don´t, then we may risk a renewed Santiago, 1973.

This is one of the areas where Argentina might help Brazil. Because if
Rodríguez Saá reached Presidency here, the Argentinean foreign debt would be
immediately put to question in the Congress. This would be helpful if Lula
decides to question the legitimacy of the Brazilian debt as well. I have the
impression, however, that the untidiness of the Argentinean debt-creation
process is far greater than that of  the Brazilian one, so that the
precedent will be of _political_, not legal, value.

The point has been made recently that "Brazil has not passed through the
default experience that Argentina has already traversed" which is of course
true: there has been no 19/20 December in Brazil. Thus, even a mild
reformist Argentinean government will have to begin by taking this most
revulsive -and, now, completely feasible- measure, the full questioning of
the debt as a first step towards repudiation on the grounds of its
illegitimacy, a much needed step that Brazil is not in a position to take
immediately (Lula is not in a position to flatly reject the payment of the
debt, as Argentina already did, simply because no mass upheaval has taken
place prior to his empowerment).

So that maybe Rodríguez Saá, the semi-conservative patriot of Peronist
trajectory and landowning origin, may prove bolder than Lula, the
progressive humanist of Marxist trajectory and proletarian origin. The
coallescence of both the Brazilian and Argentinean situations, however, may
become utterly unmanageable for imperialism.

Perhaps some cde. could give a hint as to what would happen if both
Argentina and Brazil defaulted on their debts _at the same time and in
coordination_. We are talking about some 500 bn dollars. Such simultaneous
default may prove to be the first serious stumbling stone for Dubbya and his

Any economist handy to do the fast numbers on the impact of such a scenario?


Louis Proyect

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