Through gritted teeth

The former head of Brazil's biggest development bank says the government is 'practising the most brutal policy of wealth and income concentration on the planet'. So what does it mean for the onetime hope of the left, President Lula, in this month's election?

October 1, 2006
5 min read

Barring any last-minute upset, President Lula of Brazil should be comfortably re-elected for another four-year term in October – a highly satisfactory outcome for Lula, because a year ago he was mired in a profound political crisis. This followed allegations that his Workers Party (Partido dos Trabalhadores – PT) was not only operating an illegal slush fund, funded largely by bribes from private companies in return for government contracts, but also buying the votes of federal deputies in Congress.

Far from cleaning up the notoriously dirty political system, as he had promised during his electoral campaign in 2002, Lula had shrugged his shoulders, saying that politics is a dirty game and there’s not much the PT can do about it.

Few Brazilians on the left will be particularly happy to see Lula carrying on for another term. I have been following the Brazilian political scene for over three decades and I have never before encountered the country so depressed and so lacklustre. Even when I first arrived in the early 1970s, when political dissent was being violently repressed by the generals then in power, Brazilians on the left were hopeful. I was repeatedly told that the country’s social inequalities were so acute and the country’s economic potential so great that sooner or later people would rise up and demand far-reaching reforms.

That old optimism has evaporated. Perhaps the most serious charge that the left today makes against Lula is that he has demobilised social movements. In January 2003 he brought into his government some of the country’s most prestigious popular leaders (particularly from the CUT, the main trade union body), seriously weakening the labour movement, and he has shamelessly exploited his own class origins to defuse social protest.

On many occasions he has appealed for patience. ‘It’s taken more than 500 years for a working-class man to be elected president, so don’t undermine me now,’ he says. ‘I am poor like you. I have known what it is like to go to bed hungry at night. Give me time and I’ll solve your problems.’ And people have listened.

It is true that Lula has brought some real benefits to the very poor. His social welfare programme, Bolsa Familia, has provided nine million families with a small monthly payment in return for their commitment to place their children in school. A recent survey showed that 37 per cent of the population were able to spend more on food than in 2002. It is these very poor families that provide Lula with his bedrock support. What is important to them is that their lives have improved.

But, together with this modest initiative to eliminate absolute poverty, the PT has carried on with orthodox neoliberal economic policies that are working in the opposite direction. A clique of right-wing, US-oriented bankers controls the finance ministry and stifles all opposition. These bankers have convinced Lula that he needs extreme orthodox anti-inflationary policies to maintain ‘foreign confidence’ in the economy. As a result, Brazil has the highest domestic interest rates in the world – a whopping 17-18 per cent. As Brazil has a huge public debt of around R$1 trillion (about £250 billion), the government is constantly issuing public bonds to raise money to pay the interest. This, in turn, feeds the debt.

The whole procedure has become a perverse mechanism for increasing social inequality. Just 20,000 Brazilian families can afford to purchase the bonds and benefit from this outrageous opportunity to make money.

According to Carlos Lessa, who was president of the country’s main development bank, the BNDES, until he was sacked by Lula, ‘This means that R$100 billion of public money goes to this tiny group of very rich people, compared with the R$7 billion going to the very poor [through Bolsa Familia]. So the government is practising the most brutal policy of wealth and income concentration on the planet. It is the greatest iniquity imaginable and, with time, it is only getting worse.’

The PT was founded in the early 1980s by hundreds of thousands of idealistic trade unionists and community activists who wanted to change Brazil. Many have been profoundly shocked by what has happened to their party. In 2003, senator Heloisa Helena and several federal deputies were expelled from the PT after voting against the government’s neoliberal policies. They formed a new socialist party, the P-Sol. Earlier this year, a left-wing faction within the PT tried to wrest back control of the party in internal elections. They failed, which led to a large number of activists leaving the party.

Yet the left has not died in Brazil. One of the surprises of the election campaign has been the surprisingly good showing in polls of Heloisa Helena, running as presidential candidate for the PSol. Like many poor Brazilians from the impoverished northeast, she has a profound Christian faith, and some of her beliefs (like her opposition to abortion) make middle-class urban socialists feel uncomfortable. But her fierce commitment to her ideals has won her widespread respect, even from right-wing quarters. It is widely thought that the main reason why Lula refused a televised debate with the other presidential candidates was his reluctance to face her impassioned attacks.

Opinion polls give Heloisa Helena 12 per cent of the vote, which may be enough to deny Lula victory in the first round. If the elections go to a second round, most activists will vote for Lula, even if through gritted teeth. The prospect of the right regaining power, with the election of Geraldo Alckmin, is just too unpleasant.

Somewhat paradoxically, Lula’s re-election will also be warmly welcomed by left-wing activists in most of Latin America. For all his shortcomings, Lula has provided solid political support to Hugo Chávez in Venezuela and Evo Morales in Bolivia. With Lula in the presidential palace in Brasilia it becomes a lot more difficult for the neo-cons installed in the White House in Washington to instigate the coups that many of them would love to see in South America’s ‘axis of evil’.


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