Brazil General Strike, Demonstrations Disrupt Transportation

By Jeffrey T. Lewis and Luciana Magalhaes Features Dow Jones Newswires

SÃO PAULO -- A general strike in Brazil, called to protest proposed labor and pension changes, practically shut down mass transit in São Paulo, the country's biggest city, and disrupted transportation across Brazil Friday.

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In São Paulo, the country's financial capital and industrial hub, many bus, metro and train lines weren't operating Friday morning, and major roads and arteries were blocked by protesters, according to city authorities. In Brasília, the capital, access to the city's international airport was also blocked by protesters, TV images showed.

Local news media reported that some flights have been canceled because of the strike, though the country's airport regulator declined to attribute the cancellations to the labor action.

The strike was called by some of Brazil's largest unions. Many businesses, banks and schools closed, and the Força Sindical union said some factories have also shut down.

Protesters are trying to stop the government of President Michel Temer from cutting back the country's generous pension system and from reducing some worker protections. Mr. Temer says both changes are needed to reignite the country's economy.

Over the past two years, Brazil has suffered through its worst economic recession on record, which has slashed tax revenue and made the proposed changes even more urgent, some economists say.

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The pension proposal, which is currently still in a committee in the lower house of Congress, would close loopholes that for decades have allowed Brazilians to retire in their mid-50s with pensions as high as their latest salary. That situation has led to social-security costs eating up about half of the nation's budget.

Mr. Temer already faces resistance in Congress to the unpopular pension overhaul, and Friday's strike could make its passage even more difficult while forcing the administration to scale back an already watered-down proposal, according to Luciano Rostagno, Latin America strategist at Banco Mizuho, in São Paulo.

"The government might have to make even more concessions" to get it passed, he said. Some version of the plan is likely to be approved, but a weakened proposal might mean Brazil's next government will be forced to make further changes, Mr. Rostagno added.

The labor law proposal, which on Wednesday was approved in the lower house of Brazil's Congress and will now move on to the Senate, would overhaul some of the country's 1940s-era labor code as policy makers seek to kindle an economic recovery.

Included in the bill are proposals designed to reduce or scrap mandatory union dues, make it harder for workers to sue their employers, and expand the scope for flexible work arrangements and temporary employment contracts.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@wsj.com

(END) Dow Jones Newswires

April 28, 2017 10:13 ET (14:13 GMT)