It won’t be easy for Lula after his election in Brazil (Picture: Jeso Carneiro/Flickr)
The narrow victory of Luiz Inacio Lula da Silva over Jair Bolsonaro in last October’s Brazilian presidential elections gave hope to the left worldwide. Defeating one of the nastiest representatives of the far right showed that its advance could be resisted. But the path ahead for Lula is very narrow and twisted.
Lula had already led the Workers Party (PT) to victory in two presidential elections, in 2002 and 2006. But the economic conjuncture was more favourable then.
Brazil benefitted from the so-called “commodities super-cycle”—China’s huge economic boom sucked in raw materials and pulled up their prices. The effect on Brazil was economically regressive because manufacturing declined to the advantage of primary exports such as soya, iron ore, and beef.
But China’s appetite for Brazil’s exports generated the revenues that Lula could use to finance anti-poverty programmes such as Fome Zero and the Bolsa Familia. His government generally pursued orthodox neoliberal economic policies but with some redistribution to the poorest.
The Global Financial Crisis of 2007-9 removed this margin of manoeuvre. The end of the boom provided the background for the quasi-coup that involved the impeachment of Dilma Rousseff, Lula’s successor, and his imprisonment on what he claims are trumped-up corruption charges.
Lula campaigned promising that “the wheel of the economy will turn with the poor being part of the budget”. But he takes office amid a severe global economic crisis. The central banks’ drive to force down inflation means Brazil’s interest rate has risen to 13.75 percent.
Lula promises to scrap an absurd constitutional amendment restricting government expenditure. But his finance minister Fernando Haddad has announced a package of tax rises and spending cuts aimed at eliminating the budget deficit, a modest 2.1 percent of national income. Back to neoliberal orthodoxy!
When they spoke recently Lula told Joe Biden that he wants to reduce the financial dominance of the US dollar. He has taken a step towards this by announcing with Argentinian president Alberto Fernandez that the two countries’ finance ministries and central banks will work towards introducing a common currency.
The experience of the euro shows that a common currency is no panacea. In any case the new one will be a long time coming, if ever. Argentina’s annual inflation reached 94.8 percent in December while Brazil’s is 5.79 per cent.
But Lula’s biggest problem is political. He won by one percent of the vote. Bolsonaro used his base in the evangelical churches to mobilise vast numbers of the actual or aspirant middle classes. He has a large influence on the armed forces and police and a hard core of fascist or semi-fascist supporters.
They believe the PT is systematically corrupt and Lula lost the election. During the election federal police and soldiers set up roadblocks to disrupt the voting in pro-Lula areas, especially in the impoverished Northeast, but even in Rio de Janeiro.
Much more seriously, on 8 January, security forces in Brasilia allowed crowds of Bolsonaro supporters to invade the presidential palace and Congress and Supreme Court buildings.
Lula was out of Brasilia when this rerun of the storming of the US Capitol by Trump supporters on 6 January 2021 took place. After order was restored, he expressed his distrust of the security forces—“How can I have someone at the door of my office who might shoot me?”
The Brasilia state government, which allowed the invasion, is being purged. Lula sacked the chief of the army, General Julio Cesar de Arruda, for failing to clamp down on pro-Bolsonaro agitation in the army.
But if during eight years as president Lula failed to democratise the armed forces, he’s unlikely to succeed now. Corruption during his previous presidency arose mainly from the need to cut deals with small parties to control a Congress where the PT was in a minority.
The election left Bolsonaro supporters well entrenched in both Congress and state governments. Only the intervention of workers and the poor can break the logjam, and that will require a radical programme way beyond Lula’s horizons.
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