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Lula “de novo”: a letter from Brazil

Fred Halliday
21 September 2006

It is not every country in the world where the president runs for re-election with a TV advertisement claiming that he has provided start-up credit for a bikini factory. But this is Brazil: the world's fourth largest democracy, where the presidential, congressional and federal governor elections on 1 October 2006 are a historic test of the credibility of President Luis Inácio Lula de Silva's domestic policies - and those concerning employment above all. So far, Lula seems set to turn his campaign slogan into reality: Lula de novo com a força do povo! (Lula again, with the force of the people).

It is indeed likely to be "Lula again", even though, since his election in October 2002, the president has been buffeted by a succession of financial scandals that have appeared to dent, if not wholly discredit, his long-term image as a man of honesty and probity. Among educated and more affluent Brazilians, there is much disillusion with these ongoing and as yet unresolved cases of corruption, and of the shady interlocking of government and political parties.

The scandals have continued during the campaign itself; on 20 September, Lula was forced to accept the resignation of his campaign manager Ricardo Berzoini over the latter's apparent involvement in attempts to purchase a dossier of information about a leading political (and candidate for the governorship of São Paulo state), Jose Serra.

Yet in his TV ads Lula appears relaxed and confident. He talks of the economic success he has brought to Brazil, where inflation is now under 5% and growth is improving; and of the more than two million enterprises - from cybercafés to peasant households to the bikini factory - who have benefited from his policies.

There is an irony here. Lula emerged from the labour movement represented by the Partido dos Trabalhadores (Workers' Party / PT) that he helped to found; an organisation with roots in the 1980 strike of 140,000 metal workers, under the military dictatorship. Yet today, his major following comes from the millions of Brazilians who live mired in poverty and without secure employment or income.

In reflecting on this shift, a minister from Brazil's Communist Party, which belongs to the governing coalition, tells me that the organised working class has in effect become the middle class. Another way of putting the same point is that Brazil remains a deeply polarised society, indeed, one where global economic forces are reinforcing and remaking regional and local divides.

Fred Halliday is professor of international relations at the LSE, and visiting professor at the Barcelona Institute of International Studies (IBEI). His books include Islam and the Myth of Confrontation (IB Tauris, 2003) and 100 Myths About the Middle East (Saqi, 2005).

Fred Halliday's "global politics" column on openDemocracy surveys the national histories, geopolitical currents, and dominant ideas across the world. The articles include:

"America and Arabia after Saddam"
(May 2004)

"Terrorism and world politics: conditions and prospects"
(March 2005)

"An encounter with Mr X" (March 2005)

"Iran's revolutionary spasm" (July 2005)

"Political killing in the cold war" (August 2005)

"Maxime Rodinson: in praise of a 'marginal man'"
(September 2005)

"A transnational umma: myth or reality?" (October 2005)

"The 'Barcelona process': ten years on" (November 2005)

"The United Nations vs the United States" (January 2006)

"Blasphemy and power" (February 2006)

"Iran vs the United States – again" (February 2006)

"Terrorism and delusion" (April 2006)

"The forward march of women halted?"
(May 2006)

"Letter from Ground Zero" (May 2006)

"Finland's moment in the sun" (June 2006)

"A Lebanese fragment: two days with Hizbollah"(July 2006)

"In time of war: reason amid rockets"
(August 2006)

"Lebanon, Israel, and the 'greater west Asian crisis'" (August 2006)

"Fidel Castro's legacy: Cuban conversations"
(August 2006)

" Warsaw’s populist twins"
(September 2006)

"The Left and the Jihad" (September 2006)

The corruptions of power

The very fact of the communists' participation in government suggests how far Brazilian politics has come since the uncertainties of earlier decades - including the 1950s, when President Getulio Vargas shot himself (in 1954) under pressure from the army (his bullet-marked pyjama-top and the pistol he used are on display in the Palacio Catete, the old presidential palace in Rio); and the 1964-1985 years of military rule, when leftwing and liberal elements were persecuted, tortured and exiled.

There is no influential party of the traditional right in Brazil - a great contrast to, for example, Spain, Italy or Chile. This also means the absence of a José Maria Aznar or a Silvio Berlusconi from the political scene. The main opponent Lula faces is Geraldo Alckmin of the Partido da Social Democracia Brasileira (PSDB - the Brazilian Social Democratic Party). Its former leader, the sociologist Fernando Henrique Cardoso (president 1994-2002) defeated Lula twice, and helped consolidate the country's return to democracy and stable liberal economics. Alckmin's appeal to those who supported Lula in 2000 is clear: "There are only three things you do once in your life - be born, die and vote for the PT".

Alckmin is, however, no Cardoso: a lacklustre former anaesthetist and ex-governor of the state of São Paulo, he maintains the accent, body-language and image of the white Paulista elite; on TV and in the eyes of much of the public, he is no match for the populist Lula. His TV ads seem entirely directed at women voters, and promise a more effective childcare, state health and welfare system (thus also focusing on one of Lula's many weak points). But Alckmin's own claim that his administration of São Paulo could be a model for Brazil has been turned against him, since his period in office has coincided with a large increase in organised crime in the city.

Some opinion polls give an outright victory of 50% plus in the first-round vote on 1 October. Such projections even take into account the entry into the field of a third significant candidate, Heloísa Helena, a prominent voice among the leftwing critics who have broken from the PT over its neo-liberal policies and involvement in the corruption scandals.

Helena, a senator since 1998 and now candidate of the Partido Socialismo e Liberdade (Party of Socialism and Freedom /P-SOL), articulates some of the disillusion of the working-class movement at Lula's centrist policies. But a limited following (under 10% in the polls) and her conservative religious views on the family, women and gays hampers her appeal among more middle class and liberal voters. She has injected an element of passion into the election, but is not seen as a serious challenger to the two principal contenders.

There is certainly something of a tragic irony in the way that Lula, a former sheet-metal worker who has never been suspected of personal corruption, has become the target of sustained critique over his ethical record. After contesting the presidency on four occasions on a platform of honest government, Lula soon saw his presidency (and particularly his congressional supporters) mired in a set of corruption scandals.

These scandals involved secret electoral bank accounts - the so-called "account number two" - and illegal monthly payments to members of other parties in parliament to ensure their support of the government. Lula's opponents talk of three kinds of corrupt practitioners around the president: mensaleiros (parliamentarians who take a second, undeclared monthly salary in return for political favour); sanguesuccas (bloodsuckers or leeches, i.e. congressmen who have benefited from a scam involving kickbacks on the sale of ambulances to state health services); and vampiros (vampires, i.e. perpetrators of other forms of health-service corruption).

Several people close to Lula in the hierarchy of the PT have been caught up in these scandals and are under investigation. But Lula himself has continued to claim that he knew nothing about the scandals, and has resisted all calls to resign. In a week's visit to Brazil, everyone I met believed that Lula must have known about the underhand payments, but many argue that this is less about his personal corruption than about that of the PT as a party; the logic is that Lula's part in the mensalão (money for votes) scandal is in legal terms a misdemeanour, not a felony.

The folksy image of his TV ads, and the calm optimism with which the president seems to contemplate his second term, are designed to confirm this widespread public attitude. Lula, and those around him, are also quick to counterattack on the corruption issue, claiming that most of the health-service extortion and much shady dealing over the privatisation of state enterprises happened under Cardoso's presidency.

Brazil has undoubtedly fared well in some areas under Lula, though arguably by more or less continuing the macroeconomic and political policies introduced by Cardoso. Exports are thriving and the country has a healthy current-account deficit, boosted by diversifying agribusiness and manufacturing sectors (coffee, for example, represents only 2% of exports today as against 53% in the mid-1960s). The days of soaring inflation and financial crisis seem over.

But there are more worrying developments that Lula and his predecessors have been unable to resolve. Crime, much of it drug-related, continues to rise. Most of Rio de Janeiro's cars now have shaded windows as a deterrent to attacks in traffic jams and at red lights; the financial capital São Paulo is the most dangerous city in Latin America, and a major crime syndicate there - Primeiro Comando da Capital (First Capital Command / PCC) - has on more than one occasion organised a virtual insurgency involving coordinated attacks on police and public property.

Throughout Brazil the police are regarded as ineffective and corrupt. The layers of the Brazilian federal system, whereby responsibility is shared across multiple layers of authority, only serve to compound the problem.

A wide horizon

Brazil is an active participant in the Mercosur trading bloc, and has seen its relations with Argentina, now its most important foreign partner, flourish. But it is precisely here, in relation to issues of Brazilian national interest, that anxieties are growing.

Despite routine commercial tensions in Mercosur, Lula can find common language and common ground with fellow centre-left presidents in Argentina (Nestor Kirchner) and Chile (Michelle Bachelet). But he is less at ease with the new populist bloc forming to the west and north, with Hugo Chavez in Venezuela, Evo Morales in Bolivia and, of course, Fidel Castro and his associates in Cuba.

In particular, Brazil is alarmed by the policies of the new Bolivian president over the nationalisation of energy resources, which have infringed the operations of Brazil's national energy company Petrobras, which has major interests in the Andean state. "Morales is just going to have to learn," was a remark I heard more than once in Brazil; and Bolivia's giant neighbour has already demonstrated its influence by securing the dismissal from the Bolivian government on 15 September of Andres Soliz, the minister of hydrocarbons responsible for the nationalisation process.

Beyond the unsettling impact of these regional leaders, there remains the long-running sore of another of Brazil's neighbours, Colombia, which is riven with war and narco-trafficking: fighting in Colombia between government and Farc rebels sometimes spills over onto Brazilian territory, and there is a steady flow of drugs and guns from Colombia into the shanty towns of Rio and other cities.

Meanwhile, Brazil has had its differences with Washington, most specifically over trade policy; but the United States also claims that Brazil has allowed terrorists to organise among Shi'a Muslims living in the frontier triangle it shares with Paraguay and Argentina.

Beyond its immediate region, Brazil under Lula has encountered its share of setbacks. It has (along with Germany and Japan) pursued a campaign to acquire a permanent seat on the United Nations Security Council, which became part of discussions on reforming the UN as a whole, held around the organisation's sixtieth anniversary in 2005. The failure of the bid, after it met with resistance from the US and other permanent members, seemed to come as a surprise to the Itamaraty (Brazil's foreign ministry) - a reaction that was cast by the government's opponents as an example of its lack of realism.

Brazil's involvement in UN peacekeeping operations in Haiti, where it now heads the mission and has over 1,000 troops deployed, has also been less than successful (most notably, in the suicide of the leader of the mission, General Urano Bacellar, on 7 January 2006). The international trade negotiations of the Doha round, where Brazil has been a major player, have seen its alliance with South Africa, India and other developing countries achieve momentum and recognition, but not yet the substantial reform of world trade in the interests of the "global south" that the country has sought.

A report-card on President Lula and his team after four years would, then, have to conclude that the record is mixed. Many Brazilians are disappointed, but not enough for Geraldo Alckmin to expect more than to reach the second round of the presidential ballot on 29 October. Most Brazilians seem prepared to give Lula another chance. The bikini factory ad, at least a novel definition of "microcredit", will probably not do any harm.

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