Despite hugely disruptive strikes by oil workers, the Brazilian government has auctioned the exploration rights for the significant offshore Libra oil field to a consortium led by state-owned firm Petrobras. The consortium also includes shares for two Chinese state companies, Anglo-Dutch Shell and Total of France.
Concerns amongst Brazilians working in the oil industry that the auction will lead to significant foreign intervention in their livelihoods were dismissed by the ruling politicians, who retain an historically close link with the business elite. The president of the National Petroleum Agency concluded that the auction was an “absolute success” despite the fact that the minimum-share price bid by the consortium was unchallenged.
During the 19th century, when the independent Empire of Brazil broke free from Portuguese colonial rule, the interconnected bodies of the political, economic and military elite dominated life in the fledgling state. Moving away from the traditional industries of cotton and sugar production, Brazil became the world’s preeminent producer and exporter of coffee, with the land surrounding Sao Paulo having the largest plantations.
The power of the coffee barons in Sao Paulo and later the cattle ranchers in Minas Gerais created the cafe com leite (coffee and milk) system in Brazil. This would become particularly influential during the First Brazilian Republic (1889-1930), when 9 of 11 presidents came from these two provinces, such was the political credence generated by their economic prowess.
Only Rio Grande do Sul broke the duopoly, thanks to its powerful class of army officers. The oligarchs bought political power and the patronage of the armed forces, who helped to suppress worker complaints and strikes, which threatened to sap the potency of Brazil’s labour-intensive industries in the aftermath of the abolition of slavery.
As the 20th century bouts of dictatorship and authoritarianism in Brazil proved, the military has always retained a menacing presence in the country’s political life and society. The economic elite has continued to align itself with the military to protect its vested interests, creating a self-serving hierarchy that has undoubtedly contributed to Brazil’s economic inequalities.
That the army were ordered out onto the streets to break the oil strikes this past week is proof that the elitist system in Brazil is far from deceased.
With abundant natural resources and a powerful economic elite ready to exploit them, Brazil’s politicians will continually feel the need to overlook worker concerns in a bid to secure the patronage and donations from Brazil’s real powerbrokers.