Big Challenge for Brazil’s New President Is Going Beyond Lula

    Dilma and Lula

    Dilma and Lula“I would like that every father and mother in the country today look at their daughters and say: ‘Yes, the woman can’.” No one in this political moment in Brazil can utter these words with more authority than Dilma Rousseff, who on October 31, 2010, accumulated enough votes to become the first woman president in the history of the country.

    True, it wasn’t the smooth ride that many had long expected. The first round on October 3 had produced something of a surprise, when Rousseff – even though boosted by the support of the popular two-term president Luiz Inácio Lula da Silva – was forced into a second round against her chief adversary José Serra, the former governor of São Paulo.

    The strong performance of the Partido Verde (Green Party) candidate Marina Silva, with 19.3% of the vote, deprived Rousseff of the outright win she had expected.

    In the weeks between the two rounds, some opinion-poll figures had even suggested that José Serra might just win. But in the end, Dilma’s margin of victory was clear: with 56.05% of the vote (and 55 million in total, against Serra’s 43.95% and 43 million), a majority of Brazilians have invested this daughter of a Bulgarian immigrant father and a Brazilian mother with their confidence at least for the next four years.

    The inheritance is in some respects benign. Brazil’s economic performance is currently very good, reflecting the sound economic management of the administrations of both Fernando Henrique Cardoso (1994-2002) and Lula (2002-10); and Brazil’s political institutions have also proved efficient in preserving the country’s political stability, even in moments of disturbing corruption scandals.

    But Dilma Rousseff’s task will not be easy. Her presidency, which begins with her inauguration on January 1st, 2011, will face three major challenges that will test her political skills – and perhaps even more important, Brazil’s current economic prosperity and institutional health.

    After Lula

    The first challenge, paradoxical as it may seem, is the uniquely strong and important legacy of Lula himself. The incumbent president has over eight years in power pursued a political strategy that has transformed Brazil’s economic and social context without risking its institutional stability.

    This is what André Singer, a political scientist at the University of São Paulo, has called Lulismo; its heart is the engagement of Brazil’s poorer classes with Lula’s political platform by seeing in him the possibility of their social ascent in a non-confrontational way.

    An analysis of Lula’s two terms clearly shows that this political model was carefully constructed, such that by the end it could win the president the support of more than 80% of Brazilians. A striking aspect of the strategy relates to economic management; on no occasion during the last eight years has Lula’s administration given any signal that it would abandon three important commitments inherited from its predecessor – the control of inflation (even with high interest rates if necessary), the free exchange-rate mechanism, and fiscal responsibility. In fact, even at the beginning of his first term, a large part of the Brazilian left harshly criticized Lula for his support of these core principles.

    But this relative orthodoxy was only the foundation, creating space for Lula’s presidency to go much further in advancing its social goals. The administration also implemented a series of economic and social programs – most notably the renowned Bolsa Família, in 2004; and the Programa de Aceleração do Crescimento (PAC), in 2007.

    In parallel, it gave to public financial institutions (such as the Banco do Brasil) the role of making credit available at below-market interest-rates to low-income families.

    The results included an explosion of consumption and employment whose benefits were felt strongly by poor people, but also by those in upper sectors. Just two figures give an indication of the effects: the Brazilian minimum wage continued to grow, by more than 30% in real terms over 2007-10; and the Brazilian economy created more than 1.3 million formal jobs annually over 2004-10.

    It is now for Dilma Rousseff’s presidency to keep this path. It is not clear whether her government will be capable of a performance as good as Lula’s. The remarkable achievement of her predecessor (and mentor)  was to use his political skills and charisma to balance all the forces that pushed upon the presidency, in a way that enabled him to implement a political platform which benefited every sector of Brazilian society – especially the poor.

    In political terms, Lula’s prestige – with other leftwing organizations as well as his own Partido dos Trabalhadores (Workers’ Party / PT) – was a vehicle to establish a positive equilibrium that could effect change without a major rupture.

    This measures the size of Rousseff’s task: for now she will face pressure both from the coalition of parties behind her government and from a range of interests and organizations in Brazilian civil society – all seeking to press their own agenda, and to test the new leader.

    The challenge to her is to keep control of her own agenda while balancing the forces around her and maintaining popular support. This would be formidable work for anyone; the example set by Lula makes it even more so.  

    After Lulismo

    The second test relates to the limits of Lulismo. This is a capitalist revolution. The origins of Lula and the Workers’ Party lie in the periphery of Brazilian capitalism’s heartland: the city of São Paulo. It was here that PT was forged out of the political movement of trade unions organizing around the Paulistas’ industrial base; here too, its chief rival the Partido da Social Democracia Brasileira (PSDB) – in which Fernando Henrique Cardoso and José Serra have been leading figures – was formed out of the intellectual elite of the city’s industrial class.

    In this sense, a Marxist analysis could see the polarization between these two parties that has dominated the Brazilian political scene since 1994 as an extension of the class struggle in São Paulo.

    The great success of Lula’s presidency among the Brazilian people is based on real income growth, consumption and job-creation. The problem here is that other issues – such as basic education, public healthcare and public security – have not received equivalent attention.

    A pair of international reports casts a sobering light on such issues: at a time when the International Monetary Fund suggests that Brazil may become the seventh-largest economy in the world in 2011, the United Nations finds that the average Brazilian child spends at school the same number of years (7.2) as the average Zimbabwean (in a country at the bottom of the world’s human-development index).    

    The way that Dilma Rousseff’s presidency will address this and other flaws in Brazilian society is a burning question that only time will resolve. In this respect, her recent statement that education policy will not be among her priorities since the area has until now been “well conducted” is not reassuring.

    Brazil’s opposition has already highlighted the Lula administration’s approach to the efficiency of the state and public services, and this line of criticism may pose some problems to the new government too.

    It is relevant here to note the gradual increase in the opposition’s vote in successive presidential elections. In 2002, when Lula defeated Serra, the latter received 38.7%; in 2006, when Lula defeated Geraldo Alckmin (the newly elected governor of São Paulo state), the latter gained 39%; in 2010, Serra gained 44% in losing to Dilma Rousseff.

    The issue of the efficiency of the state and the public services has been a feature of all these campaigns; it will certainly be a major factor in the opposition to Rousseff’s presidency – especially in the context of Brazil’s high tax-rates, close to 40% of GDP.

    The media will also most likely exert pressure on the new president over this matter. How Dilma handles this area, without harming the social and economic advances achieved by Lula, will be a major test of her political skills in the next four years.

    After the Ball

    The third challenge will be the pressure of the international economic situation. The United States and Europe are in poor economic shape, and this creates problems for the global economy as a whole, Brazil included.

    A major problem here is the appreciation of the Brazilian currency; this is reflected in Dilma Rousseff’s attendance with Lula at the G20 meeting in Seoul on 11-12 November 2010, where currency values were high on the agenda of world leaders.

    The continuing recession and/or slow growth abroad that will also probably force the Brazilian economy to give priority to the domestic market, which in turn will create inflationary pressures and thus measure the administration’s commitment to fiscal responsibility.

    A zero-sum game between steep interest-rates and inflation would be especially harmful in Brazil, which already has perhaps the highest real interest-rates in the world.

    The major political success of Lula’s two terms in office has ended in the election of his protégé. But as these years and an exciting election season pass into history, the moment for Dilma Rousseff to celebrate will be short.

    In the quarter-century since the end of the military regime, Brazil’s people have learned that democracy – and politics generally – can indeed change their lives for better. This is a sign of great political maturity – but it is also a demand for greater responsibility. The next four years promise to be interesting.

    Arthur Ituassu is professor of international relations at the Pontifícia Universidade Católica in Rio de Janeiro, Brazil. You can read more from him at his website: www.ituassu.com.br. This article appeared originally in Open Democracy – www.opendemocracy.net.

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