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Lula’s landslide for the left

Michael Marsden explains the transformation of Brazils new president from unelectable trade union firebrand to triumphant social democrat.

Brazil has elected a left-wing president for the first time ever. Luis Incio “Lula” da Silva, the leader of the Workers Party (PT), won by a wide margin in the final round of voting on October 27.

The poll was a straight run-off between him and José Serra, the candidate for the centre-right coalition of outgoing president Fernando Henrique Cardoso, who has served two terms and is prevented by the Brazilian constitution from standing again.

The result is a remarkable personal triumph for Lula, 57, a former lathe operator and radical trade union leader who had been beaten in three previous presidential elections. Finally, in his own words, the “man from the factory floor” has reached the highest political office, and few politicians anywhere in the world have ever had to travel so far. The son of illiterate parents, Lula was born into extreme poverty, went without shoes as a child and left school at the age of fourteen.

His victory reflects Brazilians increasing exasperation with the failure of Cardoso’s governments to tackle high unemployment or narrow the chasm between rich and poor, despite the relative economic stability over which they have presided. In his eight years in power, Cardoso has opened Brazil to much greater foreign competition and investment, and has made a concerted attempt to reduce the country’s enormous debt. The constraints imposed by the latter have, he says, prevented his administrations from making the kind of social investments that he readily acknowledges would be desirable. Lauded by those such as Tony Blair and Lionel Jospin as Latin America’s leading exponent of Third Way realism, Cardoso and his policies have always been castigated by the Brazilian Left for being neoliberal.

Predictably, the financial markets and foreign investment banks reacted negatively to Lula’s constant lead in the opinion polls in the run-up to the election. Virtually incessant speculation against the Brazilian currency, the real, has led to it losing over a third of its value against the dollar in little more than two months. As far as some major foreign investors were concerned, Lula’s imminent victory increased the so-called Brazil risk. They fear he could embark on a rash programme of spending that would lead to Brazil following Argentina by defaulting on its public debt.
Their assessment of Lula and his party is out of date. The truth is that the PT has gone through a modernising process similar to those undergone by so many other socialist parties. It has always been a broad church, and still counts Marxists as well as social-democrats among its members, but in recent years it has moved towards the centre. Public spending wish lists that amounted to more than Brazils GDP are a thing of the past.

The PT’s new approach to economic policy was demonstrated recently when, in response to the speculators attack on the real, President Cardoso signed an emergency accord with the IMF in which a $30 billion loan was made available in order to defend the beleaguered currency. Among the strings attached, the IMF demanded an understanding from the leading presidential candidates on basic economic policies before extending the current deal into 2003. Specifically, the IMF decreed that the next government, if it wished to make use of the loan, had to maintain a budget surplus so as to stabilise the public debt.

It was the kind of imposition Lula would certainly have rejected ten years ago, but this time he accepted it. And with regard to Brazils debt to foreign financial institutions, whereas during his 1989 bid for the presidency he declared that it should not be paid, more recently he remarked that there are some contracts that simply must be complied with, though that doesn’t mean we agree with them.
Just as the PT has been at pains to convince the financial community of its commitment to responsible fiscal policies, the party has also reached out to floating voters who previously thought it too radical. Nothing illustrates this better than the party’s electoral alliance with the centrist Liberal Party, a move that raised more than a few eyebrows among the PT rank and file. Lula even went as far as to choose industrialist and Liberal leader José Alencar as his running mate.

Lula himself has undergone the kind of image change that would no doubt warm the hearts of new Labour stylists in Britain. The days when he would appear in a T-shirt giving a clenched-fist salute in front of a crowd of activists are long gone. He can still be found at gatherings of trade unionists, but only in an expensive suit. His beard has been trimmed so as to appear less threatening, and a colour co-ordinator has even been hired to dress him in emollient tones. He was even advised that his previously conspicuous stomach was a turn-off for voters, so he has had to accept a weight-loss plan based on a diet of fish, beetroot and bananas.

Lula’s advisers probably feel vindicated by the way in which their man no longer provokes a hysterical reaction among the most reactionary sections of Brazilian society. This time round there was no repeat of the famous allegation once made by Bishop Edir Macedo, the founder of Brazils largest evangelical protestant church, that Lula was the incarnation of the anti-Christ which was a little harsh even by the vitriolic standards of election campaigns.

In terms of substance as well as style, the PT is now firmly within the social-democratic tradition. It desires a redistribution of wealth, most notably insisting on the necessity of a land reform programme more ambitious than that attempted by the Cardoso governments, but Lula is at pains to point out that the agrarian reform his envisages is pacific and negotiated. The party plays down its links with the radical landless rural workers movement, the MST, whose frequent land occupations do not receive Lula’s open support.

A PT government would aim to enact the party’s vision of a strategic state that plays a proactive role in the achievement of social goals, such as a drastic reduction in the rate of illiteracy, currently around 15%. In the Brazilian states governed by the PT, there are already successful scholarship programmes through which poor families who keep their children in school are provided with small subsidies.
In economic policy, Lula’s instincts are far more interventionist than those of President Cardoso. He has consistently called for economic policies that favour what he calls the productive rather than the financial sector. He condemns what he sees as Brazils indiscriminate economic liberalisation, in which interest rates have been kept sky-high (currently 21%) to attract foreign investment. This has been to the detriment of the Brazilian industrial base. He said recently that he intends to preside over a government less ready to accept dogmatic prescriptions for trade liberalisation, issued from abroad by those who fail to practise what they preach a reference to the hypocrisy of the United States and the EU when it comes to the lowering of tariff barriers.

Now assuming the role of Latin America’s diplomatic heavyweight, it is difficult to imagine Lula becoming popular in Washington or wanting to, for that matter. Certainly he has shown no desire to ingratiate himself with the current occupant of the White House. In a recent interview on Argentine television, not only did he say that Latin American leaders have been too servile in the face of US economic and foreign policy, but that President Bush himself pays little attention to problems of the region because he is much more worried about his private war with Saddam Hussein. Lula’s independence on foreign policy questions like Cuba and the civil war in Colombia is also likely to irritate the Bush administration.

Lula’s administration is going to face enormous challenges, and will no doubt struggle to meet the expectations of the PT’s grassroots activists, the majority of whom have not accompanied the party leadership in its move towards the political centre ground.

The incoming administrations room for manoeuvre will be severely restricted by its commitment to towing the IMF line, inevitable pressure to placate the financial markets and the sheer size of the country’s debt the burden of which is increased by high interest rates and the weakness of the real. The PT will also have to forge tactical alliances with smaller centrist parties in order to be assured of a majority in Congress.

As Lula said recently, his government will have to be both responsible and creative, but he is confident it will be able to defend itself, while also making advances. Its inspiration, he suggested, could be the Brazilian footballers who brought home the World Cup in June, for they showed how it is possible to be defensive and offensive at the same time.

Michael Marsden is a freelance journalist.