Brazil World Cup Strikes Spread as Police Join Protest Surge

Photographer: Nelson Almeida/AFP via Getty Images

Buses remain idle in front of the bus terminal, during the second day of a general strike of bus drivers and ticket collectors demanding a pay rise, in Sao Paulo, Brazil on May 21, 2014. Close

Buses remain idle in front of the bus terminal, during the second day of a general... Read More

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Photographer: Nelson Almeida/AFP via Getty Images

Buses remain idle in front of the bus terminal, during the second day of a general strike of bus drivers and ticket collectors demanding a pay rise, in Sao Paulo, Brazil on May 21, 2014.

Brazilian police joined Sao Paulo bus drivers in work stoppages today, leaving commuters stranded in South America’s largest city and crimes unreported before the World Cup starts on June 12.

More than half of Sao Paulo’s bus companies halted services as workers push for better pay, according to the city transport company SPTrans. Civil police forces in 17 states including Sao Paulo suspended most activities, such as reporting on thefts and traffic violations, according to a statement posted on their union federation’s website. They seek improved salaries and stricter laws that would make it easier to prosecute suspects, said Rodrigo Franco, head of Brasilia’s Civil Police Union.

“No crimes will be investigated today,” Franco said by phone. “We’re tired of seeing criminals walk free three or four days after we arrest them.”

Today’s protests follow a walkout last week by military police in the northeastern city of Recife, which will host World Cup games, that prompted the government to deploy the national guard and army troops amid reports of looting. While labor protests are frequent in Brazil, a resurgence of unrest ahead of the soccer tournament threatens to further erode President Dilma Rousseff’s support in the October election, said political analyst Ricardo Ribeiro.

‘Very Disturbed’

“A very disturbed, agitated social environment isn’t favorable to anyone in power, especially someone seeking re-election,” Ribeiro, who works at Sao Paulo-based consulting firm MCM Consultores Associados, said by phone.

More than 1 million Brazilians protesting against inflation, government corruption and state spending on World Cup stadiums took to the streets last June in Brazil’s largest demonstrations in two decades, driving Rousseff’s approval rating to a record low. Following a rebound months after the protests, Rousseff’s popularity again fell in polls published since late March as she struggles to bring inflation to target amid slowing economic growth.

The Ibovespa Sao Paulo Stock Exchange index surged 3.5 percent on March 27 following publication of the first poll showing a drop in her approval rating, marking the biggest one-day increase so far this year. The Ibovespa in the past three months has gained more than 17 other major equity indexes tracked by Bloomberg.

Rousseff’s Lead

Rousseff’s lead before the October election is too narrow to call a first-round victory, according to a survey conducted by polling company Datafolha published May 9 in Folha de S.Paulo newspaper. Her support totaled 37 percent of the potential vote, less than the sum of her 10 potential challengers. The May 7-8 poll had a margin of error of 2 percentage points.

“Dilma’s economic policies have not been market friendly,” Donato Guarino, a credit strategist at Barclays Plc, said by phone today. “The interventionism in the private sector has been very high, and the fight against inflation is not as strong as what we expected.”

Inflation has persisted above the official 4.5 percent target throughout Rousseff’s first term while her administration’s measures of higher public spending and tax cuts have failed to accelerate an expansion in gross domestic product.

Economic growth in Latin America’s largest economy will slow to 1.8 percent this year from 2.3 percent in 2013, falling short of the regional average for the fourth consecutive year, according to analysts polled by Bloomberg.

Tear Gas

Security forces in Sao Paulo today used tear gas to break up a standoff between picketers and strike-breakers, while some passengers paid double their usual fare for clandestine transportation, Globo News reported on its G1 website. At least 300,000 commuters have been affected by the stoppage, according to SPTrans.

Yesterday, teachers marched in Sao Paulo’s center as bus drivers blocked roads and shut terminals in the first day of their stoppage. Civil police officers, who primarily investigate crimes, this afternoon are scheduled to march in downtown Brasilia.

Some workers are picketing to take advantage of media attention before the World Cup, Labor Minister Manoel Dias said today.

“There’s manipulation; we’re in an election year,” he told reporters in Brasilia.

Traffic Jams

Traffic jams reached a 2014 record of 261 kilometers (162 miles) in the city yesterday evening as buses blocked roads after their drivers threw away their keys as a form of protest. City Mayor Fernando Haddad told reporters that the demonstration was illegal and likened the stoppage to an act of “vandalism” and “sabotage.”

Several industries typically renegotiate wages this time of the year, meaning some strikes would have occurred even without the leverage provided by the world’s most-watched sporting event, Jose Silvestre, coordinator of union relations for Dieese, a trade union research institute, said by phone.

Rousseff’s government hasn’t delivered the same wage gains as her predecessor, Luiz Lula Inacio da Silva, Joao Augusto de Castro Neves, an analyst at political risk consulting company Eurasia Group, said by phone from Washington.

Minister Dias told reporters today the government “undeniably” had given salary increases.

Wages for military and civil servants rose 9.9 percent annually during Lula’s second term, not taking into account inflation, versus 6.4 percent in Rousseff’s first three years, according to data from the national statistics agency. Consumer prices on average rose 4.81 percent a year during Lula’s second term and 6.1 percent in Roussseff’s first three years.

“It was expected she would have a more difficult time with police officers and public servants given she was much less generous than Lula,” Neves said.

To contact the reporters on this story: David Biller in Rio de Janeiro at dbiller1@bloomberg.net; Raymond Colitt in Brasilia Newsroom at rcolitt@bloomberg.net

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net Randall Woods, Philip Sanders

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