The International Monetary Fund, IMF, urged Brazil to maintain austerity measures in a report released Friday, one day after scandal-ridden and unelected President Michel Temer refused to step down in the face of widespread strikes and protests.
The report called the “Western Hemisphere Regional Economic Outlook,” urges Brazil to continue course with the austerity adjustments made during Temer's unelected presidency, saying that it expects the country to return to a growth rate of 1.7 percent in 2018.
“An ambitious social security reform was submitted to Congress and is expected to be approved later this year... Social security reform is needed to ensure that the federal spending cap is viable and that the retirement system will remain capable of supporting future generations of Brazilians. Explaining the importance of this reform is key to avoiding its dilution,” the report said, referring to an unpopular bill to “reform” social security.
The referenced reform would raise the social security retirement age to 65 years, reduce death pension benefits, raise social security contributions by civil servants and end labor rights in the countryside, effectively allowing practices that are considered by the penal code as equal to slavery.
“Modifying the minimum wage indexation policy should be considered as well,” the report continues.
Under Temer, for the first time in 15 years, Brazil didn't have a real increase in the minimum wage for workers.
Several Brazilian states were referenced in particular by the report as requiring “adjustment,” including Rio de Janeiro, Minas Gerais, and Rio Grande do Dul, which “continue to face financial stress.”
To these states, the IMF report suggests a “durable solution” of “programs of adjustment and reform” including adjustments to retirement pensions for state employees.
The IMF notes the need to “reduce political uncertainty in Brazil,” in order to continue the “ongoing reforms.”
Brazil is currently experiencing waves of protests and strikes in response to the neoliberal austerity measures taken by the unelected President Michel Temer, who took power after a parliamentary coup removed former President Dilma Rousseff.
Despite a damning wiretap scandal, the unpopular president has refused to step down.
In the year since the removal of Rousseff, Brazil has undergone a period of dramatic “structural adjustments” in the form of austerity measures. Last year, while the military budget increased by 36 percent, budget cuts were made to agrarian reform, women's advancement, climate change mitigation, environmental protection, Indigenous rights, and children's rights.