28 November, 2013In a world of precarious work and increased outsourcing, industrial policies are a way of protecting workers and their rights. According to Marcio Pochmann, economist, researcher and professor at UNICAMP (Campinas University) and president of the Instituto de Investigación Económica Aplicada
INTERVIEW
Text: Valeska Solis
Translation: Chris Whitehouse
Main Photo: IndustriALL
Coordinated industrial policies are essential for Latin America and the Caribbean.
In a world of precarious work and increased outsourcing, industrial policies are a way of protecting workers and their rights. According to Marcio Pochmann, economist, researcher and professor at UNICAMP (Campinas University) and president of the Instituto de Investigación Económica Aplicada from 2007 to 2012, South American countries need to have a common strategy in order to face the increasing global competition.
According to the International Monetary Fund (IMF), Brazil has the biggest economy in Latin America and is the seventh biggest in the world. Marcio Pochmann sees several reasons why Brazil is in this position. One is democratization, the country has enjoyed 30 years of representative government, and another is economic growth.
The redistribution of income and increased employment between 2004 and 2005 encouraged economic expansion and got the economy moving,
says Marcio Pochmann.
After the crisis in 2008, economic recovery began in developing countries such as China, India and Brazil. According to Pochmann, Brazil is the engine of the Latin American economy and its economy has the potential to be among the five biggest in the world. In recent years, Brazil has been one of the major beneficiaries of world economic growth. The nation has accumulated wealth
by exporting minerals, oil, coal, beef and soya to Europe and Asia.
What is the current situation in Brazil and Latin America?
Latin America lived through a long period of neoliberal policies, which were applied in different ways. This was detrimental to society and the economy and severely limited Latin America’s development prospects. However, post-neoliberal alternatives, applying different models, have emerged in the 21st century. The Bolivarian tendency in countries such as Venezuela, Bolivia and Ecuador has provided timely and interesting options for countries with a large agricultural sector. The situation is different in Uruguay and Argentina because these countries have a much more complex society that gives scope for constructing post-neoliberal alternatives. This is, for example, different to Venezuela, which has a large oil production and export capacity. There is also the Brazilian experience, which is different to that of Venezuela or Argentina. This is because Brazil has a very large industrial sector, and its recent investment in the oil industry has put the country into an excellent position.
The new government fund will mean increased investment in health and education. This was an important outcome of the wave of social protest in June this year when large demonstrations were held across Brazil. These post-neoliberal models are anti-neoliberal but there are also important differences between them.
What was the significance of these demonstrations for the development in Brazil?
The demonstrations were very important for breathing new life into the democracy in Brazil. It was good for the country that people went out on the streets to call for change. They were calling for improvements to public services, to the quality of education and health, something that the markets cannot offer. So this protest from the streets has been essential for the development of Brazil.
Speaking of the demonstrations, what is your opinion of the proposed Law 4330?
Outsourcing is a fact, not only in Brazil. Outsourcing is related to precarious work and I think it is essential to legislate or regulate on this matter. However, the majority proposal does not deal with the central issue of outsourcing. So there is a serious risk that the proposal will do nothing to improve the quality of employment and could mean more precarious work, including in sectors where precarious work is not yet common.
What is your opinion of the industrial sector in Latin America?
Industrial production is very important and I think South American countries need to coordinate industrial policy. There is a lot of competition, with an increase of manufacturing in Asia, especially China. At the same time, the new energy matrix may help the United States to recover, all of which could make it more difficult for South American industry to develop. It could even lead to an industrial decline in Latin America. So it is essential for our region to develop a co-ordinated industrial policy.
Industrial development depends on having a global strategy, so policies should have a coordinated international, and not just a national, perspective. For example, Brazil, Argentina and Uruguay could coordinate their oil, shipbuilding and other industries. They could coordinate their entire productive system.
Could such coordination help to combat precarious employment?
Yes. One example of this is Mercosur, in which there is still competition but which is also becoming a forum for cooperation. Competition often leads to the disappearance of productive sectors in some countries. China has managed to organize a productive system that benefits its population and that has strong links with neighbouring countries. It imports many products and exports many products. I don’t think it is appropriate for Brazil, for example, to have a trade surplus with neighbouring countries. It should diversify and develop its relations with its neighbours. Precarious and informal work would be less widespread if there was less concern about competing. Competition can be harmful because it is all about low costs, which means keeping wages down. However, precarious employment continues to be a way of competing and is a practice also widely used in Latin American countries.
What role can trade unions play in coordinating industrial policy?
The trade unions are very important, not only for the consolidation of democracy, but also as standard bearers for the future. The unions cannot just look in the rear mirror when driving their car, because that would mean looking backwards. The unions must look forwards. On the one hand, there is a change in the working class, the importance of new information and communication technologies is increasing and this means new workers. Another issue is that workers don’t join unions, they do not have contact with unions. So the unions need to attract new workers to strengthen their position, their reform agenda and their demands in order to promote economic and social progress in their countries.
Do you think Brazil is consolidating its position? Is it comparable to Argentina?
Brazil is a bit different to Argentina. If Argentina were an animal, it would be one that can build political majorities more quickly and change direction more quickly. Brazil is more like an elephant, which moves more slowly and takes longer to build political majorities, but which can achieve more solid results. Despite all the difficulties, Brazil is now going in the right direction, and should not return to its previous policies. There is a feeling that change and the fight against inequality and precarious work are essential elements for the consolidation of democracy.