Second Day in Porto Alegre

Porto Alegre, Brazil – The World Social Forum (WSF) officially began Thursday evening (Jan 31) with a march through the heart of this city’s main business district by some 10,000 delegates waving a sea of mostly red banners, chanting political slogans, and beating pots and pans, a Latin American symbol of protest. They gathered in a lakeside park for a 4-hour cultural performance by a variety of Brazilian bands and dance groups and a satellite hook-up via a giant television screen with worker and labor groups protesting outside the World Economic Summit in New York City.

Comparing this year’s gathering to last years, organizers said that 15,000 people have so far registered, compared with 400 last year, and that 60,000 are expected to attend the Forum over the next six days. The Youth Camp has swelled from one thousand last year to an estimated 10,000, and there are 3,000 journalists registered to cover the Forum.

On Friday (Feb 1), the WSF got down to serious discussions with seven simultaneous morning sessions examining “the production of wealth and social reproduction.” At one session, held in a gymnasium belonging to the military, Willie Madisha, President of COSATU, the main South African labor union federation, told a crowd of 400 that the “World Social Forum provides a space to explore alternatives to the global hegemony of the orthodox neo-liberal strategy. He said, “currently globalization means globalization for the rich” in which “the elites talk of local interests but act from their global interests.” Madisha, whose labor federation has been at loggerheads with the current South African government over its adherence to these policies, said that since the end of apartheid in 1994, “overall growth has declined, and the number of jobs, especially in manufacturing, have declined. The promised influx of foreign investment has been a trickle, unable to balance the financial exodus” from South Africa.

The COSATU leader said these policies need to be challenged through the “globalization of human workers rights” and the development of “a people’s budget” that includes three elements: 1) a broad alliance of the rest of society, including labor, the church, and NGOs; 2) concrete targets that will improve the lives of poor people, including public health care, education, transportation, and a basic income grant to the poor; and 3) public discussion about how governments raise and distribute their budgets. Madisha declared that “our plan here at Porto Alegre is to find a path toward global democracy, which will recreate liberty, equality and fraternity. If we talk only about liberty,” he added, “people will become bitter.” He concluded by arguing for a redistribution of wealth that will provide a “global income grant” to the world’s poor.

Picking up on these themes, Jeff Faux, president of the Washington-based Economic Policy Institute, declared that the global market system “is a one-party system and this party is Davos, the meeting of the World Economic Forum, which is being held in New York.” In contrast, Porto Alegre is “a meeting of the party in opposition.”

Faux laid out two propositions: 1) that the vast majority of people must work in order to live and 2) that the global marketplace is a protectionist economy because it protects the interests of those who invest rather than those who work for a living. He said that the set of global rules of the WTO, IMF, and U.S. Treasury–including deregulation, privatization, opposition to collective bargaining, and concentration on export-led growth–”is working for the investor class. But the facts are the tide is not rising for all. Over the past 25 years,” Faux stated, “the statistics show that world growth has slowed down while inequality has gotten worse.” In 1980, the richest 10 countries had an income 77 times that of the poorest 10 countries, while in 1999, the gap had leapt to 149 times. Similarly, in 1980, the richest 10% of the world’s population had incomes that were 70 times higher than the world’s poorest 10%. By 1999, this income gap between the rich and poor had escalated to 122 times.

Faux went on to argue that, under neoliberal policies, labor has become even more disadvantaged because capital has the ability to threaten to leave a country and because the role of wages and compensation has changed as globalization has increased. “When the objective is to develop a domestic economy,” Faux noted, “earning higher wages is a benefit to everyone because it increases buying power.” However, when a country depends on export-led growth, “higher wages are viewed as a problem because the elites can make the case that it makes the economy less competitive.”

Faux cited Argentina’s economic collapse to illustrate the failure of current neoliberal models. In Argentina, “capital has relentlessly squeezed labor’s share of income:” although the country’s top 500 firms grew 50% between 1993 and 1998, real wages in those firms grew at less than 20%. An examination of where the profits went shows that the share of income that went to labor between these years dropped from 35% to 28%, while the share to capital increased from 65% to 72%. Similarly, for the three NAFTA countries (Canada, Mexico, and the United States) real wages have declined, while the informal sector has expanded. “The lesson,” concluded Faux “is that no market–whether global or national–works for the majority, without a social contract.”

Faux explained that a “real social contract requires global institutions” that include strategies for economic and social democracy, but that the current global instruments are dominated by “a class that does not want a social contract.” Concluding that “it is a difficult task that we face,” Faux argued that “the world’s working majority has two great advantages:” 1) it is the majority in every country and 2) the world’s workers are indispensable. “While one can imagine a world without multinational investors, it is impossible to imagine a world without workers,” Faux noted.