Brazil: Lula’s first year
By Eduardo Dimas
Exactly one year ago, just about this time, Progreso Weekly published an article about the challenges facing the newly installed government of Luis Inácio da Silva in Brazil.
He had just taken office and analysts had many questions about his actual performance, particularly because of the contradictions that existed between his commitments to the International Monetary Fund, to the payment of Brazil’s $262 billion foreign debt, to the international financial capital, to Brazil’s bourgeoisie and oligarchy, on the one hand, and his promise to the labor unions, the slum dwellers, the Movement of the Landless and the bases of the Labor Party, to put an end to the neoliberal movement.
In sum, his commitment to the 83 million poor people who live in Brazil, 54 million of them in abject poverty, who aspired to a more equitable distribution of wealth.
One year later, it is possible to make an assessment of the achievements and mistakes of the Lula government, of the fulfillment or failure to fulfill his campaign promises and the circumstances under which he has governed. At first, even before he took office, Lula was the target of strong criticism from well-known leftist intellectuals, such as James Petras, Emir Sader and Raúl Zibechi, among others.
Later, as 2003 elapsed, some branded him a traitor; others called him a major failure, a big swindler, and accused him of squandering his political capital by failing to keep most of his campaign promises. It is true that the entire Latin American and world leftist community had placed upon him many hopes that apparently were thwarted by reality. However, commitments to neoliberalism aside, one year is much too short a time to measure the performance of an administration.
For the sake of impartiality, I think it’s opportune to remember that no politician can go beyond what the circumstances allow, and these circumstances are not precisely propitious to carry out major changes in a society dominated by the transnational corporations. I have the impression that the left has demanded from Lula more than Lula could give. In other words, the left saw in Lula a hope to turn wishes into realities and that’s not possible in these unipolar times. Besides, Lula is no Fidel Castro.
Even if Lula had reached power through a revolution and had been able to destroy the existing apparatus of power and to build a new one, he would be in no condition to carry out any deep reforms, because the international situation would have prevented him from doing so. Much less change the neoliberal model, the main criticism aimed at him, because – far from disappearing – that model has gained strength. And if he had not agreed to compromises with the real power in Brazil and the world, he wouldn’t be president right now.
In other words, it seems that a whole series of unreal expectations were built around Lula. And bear in mind that neither Lula nor his Workers Party are what they were in the 1980s, because – as certain forces and personalities have entered the picture – they have assumed a more centrist position, away from the left, which is not unusual these days among progressive parties with presidential hopes.
But let’s look at the results of the first year of Lula’s government. Let’s begin with his foreign policy. His first move in international relations was the creation of the “Group of Friends of Venezuela” to try to intercede in the conflict between the Bolivarian Revolution and the Venezuelan oligarchy.
To most observers – and quite rightly, I believe – what he actually created was a “Group of Enemies of the Bolivarian Revolution,” because the member countries were the United States, Spain, Portugal, Mexico, Chile and Brazil, the chairman. Most of those countries, especially the U.S. and Spain, have done everything possible to wipe out that process and do away with Hugo Chávez.
In other words, Lula’s first act in office reflected negatively on the leftist movements in Latin America and the rest of the world. Some believe it was a trap set for Hugo Chávez, although in practice it didn’t turn out to be one.
However, despite his apparent cordial relations with the United States and Doubya Bush, despite the praise voiced by José María Aznar and despite the Group of Enemies of Venezuela, Lula can point to some achievements in foreign and trade policy and in the search for Latin American integration.
For example, he established an alliance with South Africaand China (the so-called Group of Three) and later led the Group of Twenty, which performed a fundamental role in the ministerial summit of the World Trade Organization held in Cancún to abort the Dohá Accords and foiled the plans of the developed countries to keep alive their farm subsidies.
In addition, Brazil was able, along with other Latin American countries, to keep the United States from imposing the Free Trade Area of the Americas (FTAA) at the Eighth Ministerial Meeting, held in Miami, and create the so-called FTAA “lite” – or soft or pragmatic.
At the same time, Lula has tried to strengthen the Mercosur (South American Common Market) and to establish links and trade accords with the Andean Community of Nations (ACN), which would mean the embryo of a process of regional integration that is indispensable to establish negotiations with the United States and other countries. All these steps are successes in his foreign policy that do not agree at all with the neoliberal and pro-American policy of other Latin American governments.
During his year-end sojourn through several countries in the Middle East, Lula said something in Beirut that summarizes his philosophy about relations with the United States, the European Union and Japan. His reasoning, as noted by Uruguayan journalist Raúl Zibechi, is simple and clear: “By itself, none of us can compete with the wealthy countries. Together, we shall be strong enough to compete on equal footing and to force the wealthy countries to make their markets more flexible.”
It is obvious that Lula seeks to agglutinate that strength, which is not a bad thing, even if it benefits certain sectors of Brazil’s bourgeoisie.
It is also obvious that Lula’s foreign policy is not to the liking of the Doubya Bush government and focuses on the interests of Brazil, which are, more or less, the interests of all of Latin America. His critics claim that policy agrees with the interests of the São Paulobourgeoisie.
That may be true, but it is also true that Latin America needs a large dose of nationalism, even if it is of the bourgeois kind, to defend its own interests. Far from criticizing that position, I think it’s the most intelligent of all, given the weakness of the Latin American left, its lack of an alternative model, its schisms and the lack of power in its hands, except for Venezuelaand Cuba.
Perhaps the biggest and most reasonable criticism has to do with the domestic policy Lula has developed in his first year in office. For example, when he assumed power, he said Brazilians would witness “a spectacular growth,” yet this year the gross domestic product grew barely 0.4 percent.
If we consider that the Brazilian population grows at the rate of 1.5 percent a year, the fact is that the GDP per capita decreased. Also, he overfulfilled the commitment he made to the International Monetary Fund (IMF) to achieve a fiscal surplus of 3.75 percent, and to do that had to cut public expenditures. He has maintained high rates of interest to prevent inflation, but such rates hinder any kind of domestic development, although they please the transnationals, who hold the state bonds, and the international financial capital, who make between 16 and 18 percent in interest on the loans.
Last year, Brazil had to pay $35.9 billion in amortization and interests on its foreign debt, estimated at $262 billion. This year, it will have to pay $39 billion for the same reason. The $30 billion loan granted by the IMF early in 2003 barely covered the foreign obligations. With a picture like this, it’s quite difficult for the programs of social aid to get off the ground.
According to Frei Betto, in October 2003, Zero Hunger, Lula’s main social program, benefited 1.5 million families in 2,000 municipalities – barely 7 million of the 54 million people who live in abject poverty. Lula’s situation is the same as that of most rulers in Latin America. Either he pays the debt or is true to his people. Apparently, he has selected the first choice.
On the social field, Lula also has failed to fulfill his promises. The Movement of the Landless (MST) is still unable to carry out agrarian reform and 4.7 million peasants still have no land no till. On several occasions, the government has prevented the seizure of idle private land, has jailed MST leaders, and has done very little to mete out justice for the murder of several leaders of that organization.
In addition, Lula has not fulfilled the promises he made to the labor unions. Among the ranks of the Workers Party, particularly among its bases, Lula’s policies have been seriously questioned and several deputies have either quit the party or been expelled for opposing the official policy, something that is particularly dangerous to the stability of that organization. Several groups are endeavoring to create a new party, which would lead to a division in the forces of the WP and its consequent weakening.
To sum up, to the degree that Lula has failed or been unable to keep his promises, the forces that carried him to power have drawn back and have directed the strongest criticism at his government. For example, the prestigious sociologist Emir Sader points out that not only Lula’s behavior but also his speeches have turned conservative, demobilizing, critical of social movement, without mention of the financial capital and neoliberalism. To Sader, Lula’s government is a continuation of the previous government and has become “like an administrator of the hegemony of the financial capital.”
The new year will be particularly important for the political definition of Lula’s government. If the present trends continue – and everything indicates they will – it is possible that Lula will have no option but to ally himself with the traditional parties, which represent the dominant classes in Brazil. Then it would be time to review the opinions we have reached about him and his government. For the moment, I believe he still deserves the benefit of the doubt. Or does he?
Cuban-born Eduardo Dimas is a journalist and international analyst. He is also a professor at the School of Communications of the University of Havana in Cuba.
