100 days of Lula in Brazil, and Pension reforms in France

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CWA # 942

The World This Week

100 days of Lula in Brazil, and Pension reforms in France

GP Team
16 April 2023

The World This Week #209, Vol. 5, No. 13
16 April 2023

Apoorva Sudhakar and Padmashree Anandan

Lula's first 100 days in Brazil: Inheriting an economically-weak country, returning to the global stage, and reversing the Amazon policies
Apoorva Sudhakar

What happened?
On 10 April, Luiz Inácio Lula da Silva marked the first 100 days of his administration after he was sworn in as President in January for the third term.

On 12 April, Lula arrived in Beijing; he said: "Brazil is back...The time when Brazil was absent from major world decisions is in the past. We are back on the international stage, after an inexplicable absence." Lula criticized using the US dollar for international trade and said: "Why should every country have to be tied to the dollar for trade?... Who decided the dollar would be the (world's) currency?"

On 14 April, the Supreme Court ordered former right-wing President Jair Bolsonaro to testify on his role in his supporters storming government buildings on 8 January, within ten days. BBC quoted the prosecutors who called for a "full investigation of all acts before and after."

What is the background?
First, Lula's election promises and previous presidential victories. Lula narrowly won in October 2022 with 50.9 per cent votes against the 49.1 per cent secured by Bolsonaro. His election promises included tax reforms and increasing minimum wages, eradicating hunger, affordable housing, fair international trade, halting Amazon deforestation, and promoting the rights of indigenous communities. Lula, one of the founders of his Workers' Party, won his presidential bid in 2002 and retained his position until 2010. During his previous tenures, Lula oversaw the economic growth of Brazil and the upliftment of millions from poverty through massive welfare schemes focused on housing, education and nutrition. His presidency also focused on the conservation of the Amazon, unlike his successor from his own party Dilma Roussef and later Bolsonaro.

Second, a polarised Brazil. A week after Lula was sworn-in in January 2023, Bolsonaro supporters stormed the Congress, Supreme Court and the Presidential Palace. Bolsonaro then drew parallels with previous leftist protests and said the protesters escaped at the time. He tweeted: "...depredations and invasions of public buildings as occurred today, as well as those practised by the left in 2013 and 2017, escape the rule." The incident reflected the polarised Brazilian polity. Earlier, Bolsonaro also questioned the transparency of Lula's victory in the elections.

Third, Brazil's economic challenges. With his third win, Lula inherited a country that was struggling economically. According to a news report in Al Jazeera in January, Brazil was witnessing inflation at 16 per cent, and the GDP-to-debt ratio was close to 90 per cent. Since 2020, amid the government's haphazard management of the COVID-19 pandemic, Brazil witnessed the return of hunger, wherein at least 33.1 Brazilians faced hunger. To address this, Lula restored the National Council for Food and Nutritional Security, which Bolsonaro had abolished.

Fourth, focus on the environment and indigenous communities. Under the Bolsonaro administration, deforestation in the Amazon, particularly in territories of the indigenous communities, rose manifold. According to the Climate Observatory, deforestation had increaed over 60 per cent since Bolsonaro took over in 2019. Illegal gold mining also rose during the period. Lula promised to restore Amazon's lost green cover and protect the rights of the indigenous community; in February, Lula launched an operation to drive out at least 20,000 illegal miners from the Yanomami reserve. However, at the same time, deforestation in February hit a record high with a 62 per cent increase from February 2022.

What does it mean?
In the first hundred days of Lula's third term, Brazil is witnessing a reversal of predecessor Bolsonaro's approach, whether on the economic, environmental, social or foreign policy front. Lula's decisions stem from his previous two administrations from two decades ago though Brazil and the international environment have changed drastically. Under Bolsonaro, Brazil witnessed increasing animosity at the global stage; Lula's visit to the US in February and now China indicates an effort to re-engage with external powers, while also standing his ground regarding Brazil's economic prowess.

While there are certain hits, such as the commitment to address deforestation and mining, there are misses, including a growing politically polarised Brazil. Though Lula may have returned with all his charisma, Bolsonaro still wields influence over a large section of Brazilians. While it is too early to assess the impact of Lula's policies, it is certain that the way ahead is also filled with roadblocks.

France: Contended pension reform bill becomes law
Padmashree Anandhan

What happened?
On 14 April, the Constitutional Court, upon review of the bill struck down six measures part of the legislation and approved the fundamental rules of the reform. While the opposition's referendum to retain the retirement age to 62 was rejected. France's trade unions released a joint statement to Macron: "Given the massive [public] rejection of this reform, the union's request him solemnly to not promulgate this law, the only way to calm the anger which is being expressed in the country."

On 15 April, France's President Emmanuel Macron signed the pension reform bill into law. A key element was the extension of the age limit to 64 was amended into the social security code. He said: "The country must continue to move forward, work, and face the challenges that await us." After the approval, France's Constitutional Council, Prime Minister Elisabeth Borne said: "…judged the reform, on the substance as well as procedure, to conform with the constitution." The French government released a statement: "With this reform, the finances of the pensions system will be balanced in 2030. The government now wants to continue talks with [trade unions and other actors] to make work meaningful, improve working conditions and reach full employment."

In response, the opposition leader Jean-Luc Mélenchon said: "The Constitutional Council's decision shows that it is more attentive to the needs of the presidential monarchy than to those of the sovereign people." The leader of the National Rally, Marine Le Pen said: "The political fate of the pension reform is not sealed."

To control the protests and outbursts after the bill was passed, barriers and police were deployed ahead. One of the young protestor's names Lucas aged 27 said: "Making this reform is really short-sighted to me, and it brings up other questions like what are [the president's] priorities?"

What is the background?
First, the failed protests and no-confidence motions. The protests over the pension reform bill proposed by France's President Emmanuel Macron began on 19 January among the French and the opposition parties. Despite months of widespread objection against the bill and violent clashes, the government went ahead to use Article 49:3 to pass the bill without a vote. This triggered two no-confidence motions, the first which was held by left-wing parties, which failed, and on 20 March, the second motion put forward by far-right party leader Marine Le Pen which did not succeed either. This led the bill to clear its way for the review and approval of the Constitutional Council.

Second, elements of the reform. The law aims at reforming the retirement model as the balance between the working and pension-receiving population is off. The signing of the law would mean the rise of the retirement age benchmark from 62 to 64, which has been considered the most controversial. Next would be the mandate to work till 43 age to avail full pension. Both the rules target the older population of France. Whereas another rule part of the reform is an increase in pension contributions from 41 to 43 payments in a year. This is expected to add a little more stress on the working-class population, and this has not been received well among the young French. Apart from the major conditions, the law gives an early retirement for those who began working early, removal of metro drivers from the pension plan and aims to increase the minimum pension range from "EUR 100 to EUR 1200 per month."

Third, the power of the Constitutional Council. The council's decision was highly looked upon by the opposition and the trade union because of its core role. It examines whether the proposed bill aligns with France's previous enactment. The council consists of three women and six men, headed by a socialist Prime Minister. Of the nine, many are centrists and conservatives, with two appointed by Macron. Although the composition of the council does matter in a passing decision, a bill has rarely been rejected by the council since 1959. The usage of Article 49.3 is also another gear of the Council. Till now under Borne, the article has been used nearly 10 times to pass budget decisions without a vote in the parliament. This rule out the doubts over policy decisions which arose when Macron lost the parliamentary elections.

What does it mean?
First, no referendum or revocation. The last-minute referendum filed by the opposition to retain the retirement age limit to 62 was rejected, and with the law now passed, it is an even more complex to revoke the reform. The primary step would be to get support from the parliament members would be a task as the no-confidence motions never succeeded. Even though it seemed a grey area, getting 10 per cent of voters into a petition along with Council's approval and completing all the steps in nine months would be very ambitious.

Second, the opposition's reputation is derailed. The reform bill is majorly viewed as a hit to Macron's popularity; however, Macron's popularity is at its lowest. Still, Macron will gain from questions about the opposition party unity. Failure of the no-confidence motion and a rejected referendum at the council and their failure to address the protestors' concerns will reduce the popularity of opposition parties.

Third, a chaotic France. The labour union who plans to continue the protests through May will be speed breakers for everyday operations in France for upcoming months. But the larger issue would be the question over the overall impact of the social model of France. From the older segment of people to the working class to the youth have raised concerns over the path ahead of France, if it is going to tend its policies to ease problems in budget and businesses while ignoring the social model.

News from around the World
Regional Roundups

East and Southeast Asia This Week
South Korea: Warning shots against North Korean vessel for crossing the NLL
On 14 April, South Korea shot a warning fire towards a North Korean vessel that crossed the maritime border. This comes after weeks of rising tension with escalated North Korean missile tests. The South's Joint Chiefs of Staff (JCS) stated that they fired the warning shot to warn the North Korean boat as they breached the Northern Limit Line (NLL). Additionally, the South Korean patrol ship also came in contact with Chinese fishing vessels owing to bad visibility.

China: US criticised for using regional tensions to promote anti-Beijing sentiments
On 13 April, the Chinese ambassador to the Korean peninsula accused the US of using regional tension to promote anti-Beijing sentiments and create alliances. They expressed: "We are concerned about the US' intention to use Korean peninsula issues as a tool for containing China, and that It's part of their Indo-Pacific strategy... to gang up allies, to strengthen their alliance with (South Korea) and Japan," says a representative of the ambassador. This comes after rising tensions in the region with increased missile testing from North Korea amid South Korea and the US with its other allies holding military drills.

North Korea: Trilateral talks by the US, Japan and South Korea
On 13 April, 13th Defence Trilateral Talks were held in Washington DC, discussing and exchanging assessments on the security environment in the Korean peninsula. The representatives from South Korea, Japan and the US expressed joint concern and urged North Korea to: "stop all destabilizing activities immediately and that a North Korean nuclear test, if conducted, would be met with a strong and resolute response from the international community." They discussed the regularisation of missile defence and increased anti- submarine exercises to deter tensions.

Philippines: The Chinese Ambassador asks Manila to reject Taiwan's sovereignty claims
On 14 April, Chinese Ambassador to Manila Huang Xilian in a public announcement told the Philippines to reject Taiwan's claim to sovereignty. Additionally, they said to not worsen the tensions in the regions by giving the US access to the military base. Huang said: "The Philippines is advised to unequivocally oppose Taiwan independence rather than stoking the fire by offering the US access to military bases near the Taiwan Strait if you care genuinely about the 150,000 overseas Filipino workers (in Taiwan)." This comes after President Ferdinand Marcos Jr announced that the US would have access to four additional military bases under Enhanced Defence Cooperation Agreement (EDCA).

South Asia This Week
India: Minister of External Affairs visits Uganda and Mozambique
On 10 April, Indian Minister of External Affairs, S Jaishankar, visited Uganda and met the President of Uganda, Yoweri Museveni, and Foreign Minister of Uganda, General Jeje Odongo. He launched the EXIM bank project to provide drinking water to half a million people in Uganda and inaugurated the first overseas campus of the National Forensic Sciences University. On 13 April, S Jaishankar visited Mozambique and met President Filipe Jacinto Nyusi, Foreign Minister Veronica Macamo Dlhovo, Minister of Transport and Communications, and the Minister of Health. Both countries discussed a range of bilateral and multilateral issues of mutual interest. Indian Minister also took a train ride in a train procured through an India Line of Credit to Mozambique.

India-China: Beijing calls the visit of the Indian Home Minister to Arunachal Pradesh a "violation of territorial integrity"; New Delhi rejects it "outright"
On 10 April, China said that the visit of the Indian Home Minister to Arunachal Pradesh was a "violation of its territorial integrity." The Indian Minister was on a two-day visit to launch various projects including the Vibrant Villages Programme. Earlier, the Chinese Ministry of Civil Affairs released a list of 11 places on a map that show regions in Arunachal Pradesh as a part of a region called "Zangnan." On 4 April, responding to the Chinese claims, the Indian Ministry of External Affairs said: "We have seen such reports. This is not the first time China has made such an attempt. We reject this outright."

India: IMF predicts a combined debt to GDP to rise over the next four years
On 11 April, IMF released its report titled World Economic Outlook- April 2023. The report reduced India's growth rate by 0.2 per cent to 5.9 per cent. The report also mentioned that India's combined debt-to-GDP ratio would rise a tad to 83.2 per cent in FY24 and will hit a high of 83.8 per cent in FY27 before it starts to moderate. The IMF projected that India's combined fiscal deficit (Centre + states), which hit a high of 12.9 per cent in FY21 will continue to moderate to touch 7.6 per cent in FY29. Deputy director, fiscal affairs department IMF said: "The debt ratio in India right now is 83 per cent, so it's high. The good news is that it is largely in domestic currency held domestically. It's also fairly long maturity, so those are the positives. The other positive is that because we project very strong economic growth into the medium term, that is going to allow the debt to remain stable."

Central Asia, Middle East and Africa This Week
Caucuses: Border clashes in Armenia-Azerbaijan kills seven soldiers
On 11 April, fighting broke out on the Azerbaijan-Armenia border village of Tegh, the deadliest incident since September 2022, leaving four soldiers of Armenia and three of Azerbaijan dead. While Azerbaijan's Foreign Ministry called the incident an Armenian "provocation," the Armenian Defense Ministry stated that a group of Azerbaijani soldiers approached Armenian servicemen carrying out engineering work and opened fire on them. Tegh was previously the link between Armenia and Armenian-administered territory of Nagorno-Karabakh through the Lachin corridor. Many call the Tegh escalation a "test" for the EU monitors' credibility.

Syria: March towards Damascus's re-integration in the Arab world
On 15 April, Syrian Foreign Minister Faisal Mekdad visited Algeria as part of the flurry of diplomatic engagements to end Syria's decade-long isolation in the region. On 14 April, representatives of the Gulf Cooperation Council (GCC) met at Jeddah to discuss the roadmap to end the isolation. Jordan has been routing for an Arab peace plan to address the devastating consequences of a 12-year conflict in Syria. The GCC meeting comes after the talks between the Saudi Deputy Foreign Minister and Syrian Foreign Minister, held on 12 April in Jeddah. This was the first official meeting since 2012 when Saudi Arabia cut diplomatic relations with Syria. A joint statement was released and the two states agreed on resuming consular services and travel. On the same day, Syria and Tunisia announced reopening of embassies and appointment of ambassadors. The Arab countries cut their ties with Bashar al-Assad's regime since the beginning of the conflict in which it was backed by Iran and Russia. Direct talks between ambassadors and leaders began when Damascus required humanitarian aid after the strong earthquake in March.

Riyadh: Qatar and Bahrain delegates restore relations
On 12 April, delegates from Qatar and Bahrain met at GCC's headquarters in Riyadh and resolved to restore diplomatic relations that have taken a backseat since 2017. Qatar's foreign ministry stated that "both sides met to enhance the Gulf unity and integration according to the GCC charter." Bahrain along with Saudi Arabia, UAE and Egypt had imposed a blockade and boycott on Qatar in 2017. While the other three states lifted the blockade in 2021, Bahrain was the latest to agree on restoration of ties.

Germany: Expulsion of Chad's ambassador in a retaliatory move
On 12 April, Chad's ambassador to Germany was expelled in a retaliatory move by Berlin after its ambassador to Chad was expelled the previous week. On 8 April, Chadian government ordered German ambassador Jan-Christian Gordon Kricke out of the country for what they claimed was his "impolite attitude" and "lack of respect for diplomatic customs." Expelling Chad's ambassador to Germany, the Foreign Ministry stated: "Ambassador Kricke exercised his office in N'Djamena in an exemplary manner and has worked for human rights and the rapid transition to a civilian government in Chad."

Somalia: UN Secretary-General says "Somalis great victims of climate change"
On 11 April, United Nations Secretary-General Antonio Guterres arrived in Somalia's capital, Mogadishu. He discussed the country's worsening humanitarian crisis and support for its fight against extremism. He said: "Although Somalia makes virtually no contribution to climate change, the Somalis are among the greatest victims." He added: "So I call on donors, and I call on the international community to step up their support to urgently fund the 2023 humanitarian response plan, which is currently just 15% funded." The UN estimates that more than eight million people in the country are in need of emergency humanitarian assistance followed by worse famine after a five consecutive failed rainy season.

Europe and the Americas This Week
Estonia: New coalition government announces tax hikes and reforms
On 08 April, the incoming coalition government composed of the Reform Party, Eesti 200, and the Social Democratic Party (SDE) revealed their coalition agreement, which includes several tax increases such as a car tax from 2024, a revision of the state budget, and a green reform. The coalition agreement also includes a pledge to raise VAT and income tax rates from 20 per cent to 22 per cent beginning in 2024 and 2025, respectively, while raising the basic exemption to 700 euros a month. Estonia will also introduce a car tax in 2024 and abolish the VAT exception for accommodation providers. The coalition aims to renovate buildings for energy efficiency and to create a separate entity to oversee oil shale mining. Mineral resource surveys prioritized in the EU will continue, and the burning of wood in industrial power generation will end. The coalition also plans to end the burning of wood in industrial power generation and continue efforts to electrify more of Estonia's railways. The coalition agreement also includes plans to revise the division of tasks and funding model between central and local governments and privatize non-strategic, partially or fully state-owned companies. Additionally, the coalition pledges to amend the Family Benefits Act and allow Unemployment Insurance Fund's retraining support to be used for tuition payments. The coalition aims to abolish Riigikogu protection money and amend the presidential election law to allow for earlier candidate setup. Lastly, the coalition pledges to look for ways to tax international streaming platforms and seek fair taxation for global digital giants.

Russia: Putin signs new conscription law
On 14 April, RT reported on Russia's President Vladimir Putin signing of new conscription law to change the provision of the mobilization. One of the fast-tracked regulations will involve the Ministry of Digital Development to collect data on people from their employers and universities. This would help identify eligible conscripts by mail and through e-platform, where once the summon is issued, the recipient has to respond within 20 days. Russia, which mandates military service for men between 18 and 27 for one year, is now changed to 21 and 30 and will apply to those who reach the bracket in 2026.

Europe: JUICE Mission successfully launched after a short delay
On 14 April, the European Space Agency (ESA) successfully launched the Jupiter Icy Moons Explorer (JUICE) satellite from the Kourou spaceport in French Guiana after a delay due to weather conditions. JUICE will be sent on a 6.6 billion km journey, taking 8.5 years to reach the Jovian system, using a series of gravitational slingshots around Venus and Earth to reach its destination. The satellite will study the three largest moons of Jupiter (Callisto, Ganymede, and Europa) remotely, using radar, lidar, magnetometers, and other sensors, as well as taking countless pictures with its cameras. JUICE will also investigate the moons' electrical and magnetic environments and the particles that surround them. NASA's Clipper satellite will conduct similar investigations, with a focus on Europa, and is planned to arrive in 2024. The mission aims to gather more information about potential habitability to inform future missions that could potentially drill through the ice crust of one of Jupiter's moons to reach the water beneath.

The US: Agreement on Fisheries Subsidies ratified by the US
On 12 April, WTO Director-General Ngozi Okonjo-Iweala shared on Twitter that the US became the first major fishing nation to ratify subsidies deal. Agreement on Fisheries Subsidies aims to curb subsidies which promote excessive fishing. Two-third of the members need to ratify the agreement for it take effect. Global subsidies are estimated at USD 35.4 billion, according to a 2019 study published in Marine Policy. The top five subsidizers are China, the EU, the United States, South Korea and Japan.

Honduras: Foreign Minister pleas to alleviate debt with China
On 14 April, Honduran foreign minister mentioned on the state TV that Honduras will reach agreement with China to lighten up its debt burden. Honduras, where some 73 per cent of the population live in poverty, faces a total debt of USD 15.6 billion, more than half of which is owed externally, according to finance ministry data. Last month, Honduras had cut off ties with Taiwan over opening and diversifying its relations with mainland China.

About the Authors
Harini Madhusudan, Rashmi Ramesh, Akriti Sharma and Ankit Singh are PhD scholars in the School of Conflict and Security Studies at the National Institute of Advanced Studies. Padmashree Anandhan, Anu Maria Joseph, and Femy Francis are Research Associates at NIAS.

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100 days of Lula in Brazil, and Pension reforms in France

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