Brazil 20-year public expenditure cap

Brazil 20-year public expenditure cap will breach human rights, UN expert warns

GENEVA (9 December 2016) – Government plans to freeze social spending in Brazil for 20 years are entirely incompatible with the country’s human rights obligations, according to the United Nations Special Rapporteur on extreme poverty and human rights, Philip Alston.

The principal and unavoidable effect of a proposed amendment to the Constitution designed to ‘lock in’ a budget freeze in order to show fiscal prudence will be to harm the poor for decades to come, the expert warned. The amendment, due to be voted on by Brazil’s Senate on 13 December, is known as PEC 55 or the New Fiscal Regime.

“If adopted, this amendment would lock in inadequate and rapidly dwindling expenditure on health care, education and social security, thus putting an entire generation at risk of social protection standards well below those currently in place,” Mr. Alston said.

The independent expert appointed by the UN Human Rights Council called on the Brazilian Government to ensure a proper public debate on PEC 55, to estimate its impact on the poorest segments of society, and to identify alternative measures to achieve the goals of austerity.

“One thing is certain,” he stressed. “It is completely inappropriate to freeze only social expenditure and to tie the hands of all future governments for another two decades. If this amendment is adopted it will place Brazil in a socially retrogressive category all of its own.”

The plan to change the Constitution for the next 20 years comes from a Government that came to power after the impeachment of the former President and which has thus never presented a program to the electorate. This raises even stronger concerns about the proposal to tie the hands of future governments.

Brazil is Latin America’s largest economy and has suffered its deepest recession in decades, with an unemployment rate that has almost doubled since the beginning of 2015.

The Government says a spending freeze mandated by the constitution will increase investors’ confidence by reducing public debt and interest rates, and will therefore help pull the country out of recession. But the special rapporteur warns it will have a severe impact on the least well-off.

“This is a radical measure, lacking in all nuance and compassion,” he said.
“It will hit the poorest and most vulnerable Brazilians the hardest, will increase inequality levels in an already very unequal society, and definitively signals that social rights are a very low priority for Brazil for the next 20 years.”

He added: “It clearly violates Brazil’s obligations under the International Covenant on Economic, Social and Cultural Rights, which it ratified in 1992, not to take ‘deliberately retrogressive measures’ unless there are no alternative options and full consideration has been given to ensure that the measures are necessary and proportionate.”

Mr. Alston pointed out that over the last few decades, Brazil had established an impressive social protection system aiming to eradicate poverty and recognize people’s rights to education, healthcare, work and social security.

“These policies have contributed substantially to reducing poverty and inequality in the country. It would be a historic mistake to turn back the clock now,” he said.

Brazil’s National Education Plan calls for adding R$37 billion annually to provide a quality education for all students, while this amendment will reduce planned spending by R$47 billion over the next eight years. With more than 3.8 million children out of school, Brazil cannot ignore their right to go to school, nor the right of all children to a quality education.

The debate on PEC 55 has been rushed through the National Congress by the new Government with limited participation by the groups affected, and without studying its impact on human rights. A recent survey suggested that that 43% of Brazilians are not aware of the plan, and among those who are aware, a majority oppose it.

The expert, who is engaging with the Brazilian Government to clarify the process and substance of the proposed amendment, stressed that “showing fiscal and economic prudence and honouring international human rights law are not mutually exclusive, as both focus on the importance of carefully designed measures that avoid negative effects on people as much as possible.”

“Immediate negative effects need to be balanced with potential longer-term gains, as well as efforts to protect the most vulnerable, especially the poorest in society,” he the noted.

“International economic studies, including research by the International Monetary Fund, show that fiscal consolidation typically has the short-term effect of reducing incomes, raising unemployment and increasing income inequality. And in the long-term there is no empirical evidence to suggest that these measures will achieve the objectives suggested by the Government,” the expert underscored.

Mr. Alston’s appeal to the Brazilian authorities has been endorsed by the Special Rapporteur on the right to education, Ms. Koumbou Boly Barry.

ENDS

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