Brazilian infrastructure problems multiply amid labor unrest

Aug. 1, 2013 at 6:41 PM
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RIO DE JANEIRO, Aug. 1 (UPI) -- Labor unrest and popular protests threaten to derail Brazilian plans to have the country's infrastructure ready for the soccer World Cup next year and the summer Olympics in 2016.

Last month's mass marches against public spending and government corruption set a record, with more than a million people joining the protests. President Dilma Rousseff's approval ratings plummeted.

Critics say the government hasn't thought through the full implications of big business being asked to invest in national infrastructure projects to meet targets before the two events.

Brazil's organized labor sees the private sector investment in public projects as privatization by the backdoor and isn't having any of it, as a new wave of strikes at airports indicated.

Recent comparisons in wage hikes and inflationary trends showed labor wage demands have soared while Brazilian growth and national earning have shrunk.

Inflation is reported running at 6 percent, against a 1 percent drop in growth estimates.

Brazil's current account deficit narrowed in June and analysts say government hopes are pinned on further direct investment flowing into Brazil to correct the imbalance. The cash inflows, however, are also blamed for overvaluation of Brazilian currency real, which in turn undermines exports.

Current account deficit in June totaled $3.6 billion, Central Bank data showed.

The latest labor stoppages involved airport workers and thousands were reported off work Wednesday and many stayed away Thursday.

The strike was triggered by copycat wage demands, inspired by salary increases in other economic sectors. Airport operators say the workers' demands for salary hikes of as much as 16 percent are unrealistic.

Labor unions say increased private sector participation in airport development and management would lead to job losses.

Among the protesters are thousands of state employees from Empresa Brasileira de Infraestrutura Aeroportuaria, known as Infraero.

The corporation, set up in 1972, operates about 66 main Brazilian commercial airports. Infraero airports carried 179,482,228 passengers and 1,464,484 tons of cargo and operated 2,893,631 take-offs and landings in 2011, official data indicated. Infraero operations handle about 97 percent of regular passenger traffic.

If airport strikes persist, disruption across the national infrastructure will spread and bring more chaos, analysts said. At least 15 percent of the flights were hit by the stoppages, and Rousseff was booed when she arrived at Sao Paulo airport.

Brazilian media revelations of corruption in high places are routine. The media exposures began as newly elected Rousseff declared in 2011 her intention to clean up government machinery. As the media campaign gained momentum, Rousseff found several of her senior aides exposed and being forced to resign.

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