razil 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
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
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
Their assessment of Lula and his party is out of date.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 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
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.