Brazil is a country where every issue of politics and governance divides people into two polarised camps. Brazilian foreign policy is no exception. It is characterised variously by its critics as empty, discordant, leftist, ideological, and ineffective. Its supporters respond that it is a fine example of the international leadership and independence acquired by Brazil since Luiz Inácio Lula da Silva began his first term as president in January 2003.

There is no easy way to resolve such disputes to everyone's satisfaction. But the best initial approach is also the most simple: look at the facts.

Lula was re-elected to a second presidential term on 29 October 2006 (by a landslide victory, though only in the second round, over his rival Geraldo Alckmin). Now, he has four more years to test the views of both critics and champions. This is the time when he will be challenged to remedy mistakes, improve outcomes, enlarge gains and recover losses. None of that will be straightforward.

When he was first elected in October 2002, Lula seemed destined to become the spokesman of a new, more socially just, centre-left Latin America, committed to democratic rule and responsible governance.

At national level, Lula's government was determined to implement a programme of change capable of placing the economy on a path to sustainable growth with effective income distribution, job creation and social inclusion. The former metal-worker and trade-union leader seemed especially aware of the need to focus particular attention on the domestic struggle against hunger and extreme poverty. Brazil's diplomatic and commercial agenda was expected to reflect these priorities at home and abroad. At the global level, Brazil's ambitious priorities were clear: a more democratic, cooperative, and humane international environment.

The theory was perfect; the reality has been tougher.

Rodrigo de Almeida is a Brazilian political journalist, a researcher at Núcleo de Estudos do Empresariado, Instituições e Capitalismo (Center of Studies of Entrepreneurial, Institutions and Capitalism / NEIC-Iuperj) in Rio de Janeiro, and a visiting scholar at the New School for Social Research in New York. He co-edited (with Arthur Ituassu) the book O Brasil tem jeito? (Jorge Zahar, 2006)

The first term

A mix of progress and disappointment on the home front made Lula's second-term victory in 2006 less assured than it had once seemed. Lula retained much of his charisma and popularity even in the face of a series of relentless corruption scandals whose political casualties included his closest aides (among them José Dirceu and Ricardo Berzoini). But Brazil's economic performance has been unexceptional: an average growth rate of just 2.8% a year, investment restricted by poor infrastructure and regulatory uncertainty, and a suffocating tax burden on business amounting to 38% of GDP.

Lula has preserved the economic framework inherited from his predecessor, Fernando Henrique Cardoso, while supplementing this orthodoxy with more social investments. In this, Brazil's president has benefited from a healthy international economy which has boosted Brazil's exports and turned its current-account deficit into surplus.

On the international front, Lula's position as the leading voice of radical hope has long been overtaken by the more strident appeal of Hugo Chávez and Evo Morales. The election of these and other figures (Nestór Kirchner, Michelle Bachelet, Rafael Correa, and Daniel Ortega among them) is a reminder that Lula is no longer a pioneer but instead only one of several different kinds of "left" government in Latin America. The character of each depends on a range of national and personal factors - from the size of the energy-resource sector or the indigenous population to the background and formation of the leader.

Lula is on the more realist end of the spectrum. He has preferred to play the role of negotiator rather than firebrand. The contrast with Chávez especially is sharp - though even the most "anti-American" of the region's leftist leaders tend to be more pragmatic in policy even when strident in rhetoric.

Also in openDemocracy on Brazil in the Lula era:

Camilla Bustani, "The challenges to Lula's revolution"
(16 January 2003)

Marco Aurelio Garcia, "Brazilian future"
(17 July 2003)

Ivan Briscoe, "Beyond the zero sum: from Chávez to Lula"
(30 July 2003)

Arthur Ituassu, "Lula and Brazil: new beginning or dead end?" (May 2005)

Arthur Ituassu, "Lula's flame still burns" (January 2006)

Sue Branford, "Brazil's historic test"
(19 June 2006)

Arthur Ituassu, "Brazil at the crossroads"
(August 2006)

Arthur Ituassu, "The green and yellow phoenix"
(September 2006)

The next four years

In Lula's first term, Brazil had four main foreign-policy priorities:

• make international trade less skewed against developing countries - from agricultural subsidies to intellectual-property constraints

• mobilise resources towards the achievement of the Millennium Development Goals - reducing hunger and poverty in particular

• strengthen real and effective multilateralism, and promote more representative and democratic decision-making at the global level - from the United Nations Security Council to the G8

• seek closer relations with the Mercosur regional bloc and African continent (Brazil hosts the latest Mercosur summit in Rio de Janeiro on 18-19 January 2007).

Again, it has been perfect in theory and very hard in reality. There is good and bad news. Brazil's extensive social programmes have already led to a decrease in poverty over the past decades (according to the poverty index tracked by the Fundação Getúlio Vargas [FGV] business school); the trend has continued under Lula. Indeed, the levels of poverty and inequality - though still high - have reached their lowest level for thirty years, and are still decreasing. For the first time in decades, the Gini coefficient of income inequality has improved.

Brazil's government has also achieved political success in global trade negotiations. In partnership with other developing nations, Brazil coordinated the creation of the G20 group of developing-world states - which lead to its appearance at World Trade Organisation (WTO) summits as a voice in favour of freer trade in agriculture and against the billions spent on trade-distorting agricultural subsidies by the rich world. The outcomes are so far very modest; though Brazil will have an important say as to whether the Doha trade round can yet be resuscitated after its long, slow meltdown.

The Brazilian government considers the Mercosur-European Union negotiations over a trade agreement - currently also in suspension - strategically important. Although Brazil's trade with Europe is growing far faster than with other parts of the developed world, the potential commercial gains have not advanced in the last four years.

These trade priorities, nonetheless, will be maintained in Lula's second term. Brazil and other developing countries need to maintain them; after all, the G20 countries represent 60% of the world's population and 22% of the world's agricultural production. These countries have an essential role in the fight for a less asymmetric globalisation.

By contrast, it will be a great mistake if the Brazilian government maintains its longstanding dream of a permanent seat on the UN Security Council. The country has spent a lot of time, energy and political resources to achieve it; but pressures from other countries (especially the United States and within Latin America) have inflicted significant costs on Brazilian foreign policy.

At the same time - and contrary to what many critics argue - Brazil's trade priorities do not damage the key relationship between Brazil and the United States. The US is Brazil's biggest export market and the main source of foreign direct investment in Brazil. The real issue with the US lies elsewhere, in the latter's preference - after the failure of the free-trade agreement of the Americas (FTAA) - for bilateral agreements. Latin American economies, Brazil included, need to acquire competitiveness. Whether this comes via multilateral or bilateral agreements, an uncompetitive economy in the south tied to a powerhouse will perpetuate an unequal and unhealthy relationship.

This formula works for diplomacy as much as for commerce. It also highlights the fact that the realization of Brazil's foreign-policy ambitions will depend on progressive gains in domestic reform - and vice-versa. Which is the first step? Maybe they have to go together. But it would help if Brazil's diplomacy made one resolution for 2007 on its own account: to talk less and do more. That would surely satisfy both critics and supporters.