Brazil to Earmark $25bn in Public Transport Spending
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Brazilian President Dilma Rousseff on Monday proposed to set aside $25 billion in public transport investments and offered to hold a referendum on political reforms amid unprecedented social unrest that sparked two weeks of nationwide street protests against poor governance.
Brazilian President Dilma Rousseff on Monday proposed to set aside $25 billion in public transport investments and offered to hold a referendum on political reforms amid unprecedented social unrest that sparked two weeks of nationwide street protests against poor governance.
The Brazilian government on Monday announced it will allocate “50 billion reais ($25 billion) in new investments for urban mobility projects” in response to protesters’ exasperation with substandard public services and inadequate mass transit systems in the world’s seventh largest economy.
Stressing the need for fiscal responsibility, Rousseff promised to boost spending on health and education – as demanded by street protesters over the past two weeks – and proposed to hold a referendum to establish a constitutional assembly that would allow space for political reform.
“My government is listening to democratic voices,” she told a televised news conference. “We must learn to hear the voices of the street. We all must, without exception, understand these signals with humility and accuracy. Brazil is ready to move forward and has made it clear it does not want to stand where it is.”
Rousseff has also called for the use of oil royalties to boost education and proposed the recruitment of foreign doctors to bolster public health services.
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The proposals from Rousseff come after demonstrations that have rattled her leftist government. The initial wave of protest began as opposition to public transportation fare hikes but quickly escalated to anger at high taxes, poor public services and excessive World Cup spending, before coalescing around the issue of rampant government corruption.
The demonstrations coincides with the Confederations Cup tournament being held in six Brazilian host cities as a dry run for next year’s World Cup. Brazil has spent $15 billion to stage the two events.
At the protest’s height, an estimated 1.2 million people took to the streets on Thursday demanding greater accountability of the government, making it the largest public demonstrations that Latin America’s biggest nation has seen in two decades.
Complicating matters, though, is Brazil’s worsening economic climate. The government has been struggling against both a lagging economy and rising inflation, both of which make increasing spending on public services difficult.
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The Eurasia Group, a U.S.-based political risk consulting firm, on Monday said that Rousseff is “crafting a strategy that tries to generate a sense of progress on protester demands while avoiding increasing spending” as she faces “a dual challenge – one on the streets and a crisis of confidence in financial markets”.
“Her economic team is well aware that it has little room to engage in more spending to meet protester demands,” the group said.
