In his first public statement after winning the October 2002 election, Lula pointed to the example of PT governments in various states and cities to point out that fiscal responsibility and “creativity in the social area” can go hand in hand to meet the expectations and aspirations of “all Brazilian civil society”.
Huge claims have been made for the participatory budget (PB) in Porto Alegre. Bernard Cassen, editor of the French paper Le Monde Diplomatique, chairperson of ATTAC and co-founder of the World Social Forum, asserts that “a model experience, a participatory budget, is being carried out”, which “constitutes an unsurpassed experience of direct democracy”.
According to Hilary Wainwright, editor of Red Pepper and a leader of the Radical Activist Network, the PB is “a form of citizens’ power that is a democratic check on the apparatus of the state.”
According to one of its architects, the participatory budget is “a revolutionary experience of democratic planning as opposed to the techno-bureaucratic vision of central planning. The working out of the public budget and of a plan of investments is not done by the government and its technicians isolated in their offices.”
Yet, paradoxically, despite its radical credentials, the whole experience wins plaudits from those on the other side of the globalisation fence. The World Bank, for example, has declared Porto Alegre in the 1990s as the “best pupil” under its tutelage. Together with ex-mayor Tarso Genro, World Bank officials have drawn up a handbook on the whole experience in the hope of spreading “best practice” on responsible democratic local government throughout the world.
So how has this experiment managed to draw together radical anti-globalisation activists and the architects of neoliberalism?
The budget process begins each year in March with a plenary meeting of local residents in each of the 16 regions of the city. They focus on the previous year’s spending and delivery of services, and the meetings elect regional delegates for the next stage. The regional delegates meet with local groups to discuss their needs and themselves gather together at least monthly to work out the priorities. In parallel, the local government holds meetings on “themes”, such as education, which bring people together from these sectors.
At the first series of plenary meetings, two delegates from each region are elected to serve on the budget council (COP) which will agree the final set of priorities for the city and these are accountable to the regional delegates and can be recalled by them. The COP itself has 40 delegates plus two local government members.
At the other end of the process stands GAPLAN, the local administration’s budget planning office, made up of paid functionaries of the local government and answerable to the mayor. Its job is to scrutinise the technical aspects of the various proposals and above all “ensure the process stays within the legal and financial constraints set for it”.
Mediating between the two ends is the Co-ordination Committees for Relations with the Community, the CRC. There are 20 co-ordinators, one for each region of the city and four working on themes (women, youth, black people, older people). These work with PB delegates elected by the first regional PB plenaries. They meet with GAPLAN people to discuss feasibility and with neighbourhood groups to help them draw up a hierarchy of priorities. The co-ordinators are experienced PT cadres whose job it is to lead and direct the process.
The prioritised investments are eventually put to a second round of PB plenaries and then to the budget council. When the COP agrees the budget it goes to the local government councillors for approval. The municipal chamber has never rejected the COP’s budget proposal.
After a rocky start in Porto Alegre, each year has seen more and more local workers drawn into the process. Participation has gone up from 1,000 in 1991 to 40,000 in 2002, in a city of 1.2 million people. Drawing thousands of ordinary workers into making decisions about local resources is positive. It gives the lie to the idea that workers and poor people are happy to leave decisions that effect their lives to professional politicians or party cadres. It proves that workers can develop the skills needed to make informed decisions about planning. It is in that sense “a school for socialism”.
But the downside of the PB process is more decisive.
The whole scope of the PB is very restricted in what it is allowed to deliberate over. The elaborate exercise in local democracy only relates to local infrastructure “investments”, which only count for 15 per cent of local government spending (it was 10 per cent in 1989). Most of the reforms over the 11 years of the PB have been in improving water supply, sewer systems, road surfacing and paving.
The vast majority of finance and planning decisions fall outside the PB process, as one commentator notes.
“Anything that might really affect the bourgeoisie directly is kept away from the Participatory Budget. Legislation on taxation is an attribute held entirely by the executive and the Chamber. Decisions on public transport are taken exclusively by the executive. Increases in bus fares and control over the profits and labour relations of the licensed firms are limited to a small Municipal Council controlled by the Executive…The Participatory Budget has, for example, no power of decision on a policy for expropriation of the great urban wasteland that exists in the city in order to build economic housing.”
Even an ardent backer of the PB like Hilary Wainwright recognises “what is not discussed is the quality of the service, the level of pay, how the project connects with services provided by the municipality. Many other issues are left aside; e.g. how to ensure against corruption in the allocation of contracts; whether service users should pay towards the services or not.”
By enlisting organisations, particularly trade unions, into making these debasing choices, what really happens is that these organisations cease to defend the specific interests of their members. Instead, they are transformed into relays for the policies dictated by the IMF.”
The fact that the central and decisive levers of local power and wealth remain beyond the grasp of local workers has ensured that during the very decade in which the PB has drawn in more and more people, there has been a major deterioration in the social and economic conditions of local people, despite improvements in “infrastructure”.
Between 1989 and 2003, under PT rule, unemployment in Porto Alegre has trebled to 17 per cent, the same as in the rest of the country. Real wages have fallen throughout the private sector and in large parts of those employed by local government. The privatisation of services previously carried out by the local government has enabled the PT administration to better “balance the books” but has driven those workers employed by these private firms into a life of low wages and uncertainty.
By their supervised involvement in the PB, PT local government leaders teach thousands about “the limits” of what is possible and themselves learn how to play by the rules set by federal government and the IMF. In return, they get small improvements. At one level, it shows what the working class is capable of, but it is restricted in its scope and subject to filtering and ultimate veto because at the end of the day they are “participating” in the decisions controlled by others rather than exercising real power.
As one leading PT member and activist concluded.:
“Look. People aren’t stupid. .. we began to see that the priorities we put forward were never selected for review and implementation by the overseers of the budget process. We were always told that others were worse off than we were, and that our issues were ‘not a priority.’
“Little by little, we began to see what was going on. We came to understand that the PT municipalities working under this ‘participatory’ process were dutifully paying back the debt to the foreign investors ..
“We learned that they were abiding strictly by the Camata Law, which — at the behest of the IMF — requires that wages paid to public workers not exceed 60 per cent of the budget. In fact, in Porto Alegre, they ‘bested’ the IMF by reducing this amount to 48 per cent — which meant massive layoffs of public workers, and, naturally, mass strikes by teachers and other categories against the architects of the ‘participatory budget.’ The people saw through this “participatory budget” fraud and simply wanted nothing more to do with it.”