[A-List] Brazil: Lula's conscription plan

["Michael Keaney" <michael.keaney@xxxxxx>]

Brazil tries conscription to fight social malaise
By Jonathan Wheatley in São Paulo
Financial Times: May 5 2004

Felipe da Silva Ramos, 17, is selling bonsais from an improvised stall in a
street in Itaquera, a low-income suburb of São Paulo.

When business is good, he can sell five or 10 of the miniature trees in a
week for between R$5 ($1.70, ?1.40, £0.94) and R$50 a piece, earning him up
to R$300 a month in salary and commission. When business is bad, he earns
much less.

"I did this before for a few months, then I worked for a builder, then I
sold rubbish bags," he says. "Now I'm back here again. You have to make do
with what you can get. There aren't any options."

Felipe goes to school, attends church, lives with his parents and stays out
of trouble. But his age and social position make him a prime target for two
great ills afflicting Brazil's young males in urban areas: unemployment and
violent crime.

In an effort to do something about both, Brazil's left-leaning government is
preparing a drastic measure: conscription. If the plan is approved, when the
army's next conscription round comes up in August it will take in an extra
30,000 young men on top of the 64,000 already planned for this year.

But they will not be ordinary soldiers. "Five thousand of them will have a
short period of basic training, and then go to build popular housing in the
Amazon region," an army officer who asked not to be named told the Financial
Times. "The others will take part in the Citizen Soldier project."

This is a joint scheme run by the army, the employment ministry and Brazil's
trade and industry confederations, in which conscripts are trained to
reservist level and then receive job training before returning after nine
months to civilian life.

The proposal has been met almost with disbelief by employment specialists.

"First, it's a distortion of the army's mission," says Ademar Faljone, a
labour relations consultant in São Paulo. "Second, the army doesn't have the
funds even to equip its normal intake. Third, it's nonsense to think the
numbers involved will make any difference. There are millions of people
unemployed in our cities."

Indeed it is hard to see the scheme as more than a symbolic gesture from the
government, coming under increasing pressure to deliver the "spectacle of
growth" it promised during the 2002 election campaign.

The economy contracted by 0.2 per cent last year, and unemployment is at
record levels. According to Dieese, a union-linked employment research
centre, the number of jobless people in greater Sa~o Paulo alone reached 2m
in March, or 20.6 per cent of the economically active population.

Conscription is not the government's only response. Other emergency measures
under consideration include hiring up to a million people to work on basic
infrastructure projects, such as highways, sanitation and redirecting
rivers.

"These are classic, Keynesian measures," says Clemente Ganz Lúcio of Dieese.
"They're a reasonable idea as long as the government can find the funding,
and as long as they're seen as emergency rather than structural measures."
The problem is that the government, weighed down with debt repayments, has
no money for such large-scale works. It is trying to persuade the
International Monetary Fund, which lent Brazil $30bn on condition of fiscal
austerity, to exclude productive public investments from calculation of the
primary fiscal surplus. It is also preparing regulations to cover joint
public and private-sector investments in infrastructure projects, in the
hope that private money will come to the rescue.

The government is also preparing changes to its flagship First Job
programme. This offers R$200 a month for six months to small companies, and
R$100 for six months to bigger ones, as an incentive to hire young people.
But companies must also undertake not to fire anyone for a year. According
to the employment ministry, only 725 jobs have been created by the programme
so far. The worry is that, if the programme's restrictions are relaxed,
employers will simply swap existing employees for cheaper, subsidised ones.

"If you look around the world, it's very hard to find examples of successful
job creation programmes," says Mr Lúcio at Dieese. "The fact is, what
creates jobs is economic growth."

That, unfortunately, remains elusive. Meanwhile, Felipe da Silva Ramos says
that, if he is not one of the 30,000 in the army's new programme, he will
apply to join up anyway. "I'd go, sure," he says. "At least that way you
earn some money and learn some skills."