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Brazilians protest against government spending cap in 17 states

Xinhua, November 12, 2016 Adjust font size:

Brazilians on Friday held protests against the government's constitutional amendment bill which establishes a spending cap on government expenses.

Protests were registered in 17 states and were mostly peaceful. Workers blocked highways and attended large political gatherings. In several states, teachers, bus drivers and bank workers declared a day of strike.

The controversial proposal foresees that for the next 20 years the government's expenses, which include investments in key sectors such as education, public healthcare, housing and sanitation, will only be allowed to increase up to the inflation rate of the previous year.

The government says the measure is necessary to regain fiscal balance.

Critics say that, in times of crisis, government investments are often the ones which give the initial boost to put the economy back on track.

In addition, they say public education and healthcare in Brazil are notoriously underfunded, despite significant increases in spending, which surpassed the inflation rate. With the spending cap, spending in these areas would in practice fall in the future.

There are also other factors to consider. With an aging population, Brazil would actually need more investments in education and social security in the coming next decades.

The bill was passed in the House of Representatives and is currently waiting to be voted on in the Senate.

Furthermore, the poor financial situation in Brazil is not restricted to the federal government while several states are in dire financial straits, with public workers receiving their salaries late and a bleak outlook for 2017.

Rio de Janeiro state, where one of the largest protests was held, is representative of that situation: just before the Olympic Games, it declared a state of financial calamity, and earlier this week Governor Luiz Fernando Pezao tried to push some measures to deal with the crisis which were met with an uproar.

The measures included increasing the social security contributions of public workers, who have been receiving their salaries late for the entire year. Endi