Brazil After Lula: Some Predictions

    Katia Franke's With an Eye to the Brazilian Flag

    Katia Franke's With an Eye to the Brazilian Flag

    It is not too early to begin thinking about what will happen when Lula da
    Silva’s term as President of Brazil ends in 2010. Commentators often shy away
    from offering predictions, finding it safer to write about the recent past as if
    they knew what was going to happen all along. Predictions are risky, but also
    more fun. My predictions are specific enough that we will know, within five
    years, whether they came true or not.

    Prediction 1: The presidential election will be held on schedule in 2010 and Lula will leave office in an orderly fashion. Lula continues to be very popular, and there is talk of a constitutional amendment to allow a third term. But there would be very strong opposition from forces in Congress that would have the votes to block an amendment.


    Lula recently stated that “I will give the Presidential sash to another President of the Republic on January 1, 2011, and I will make my roasted rabbit which I have not done for five years.”


    He also said, in a clear reference to Hugo Chávez, that “when a political leader begins to think that he is irreplaceable or unsubstitutable, this is the beginning of a little dictatorship.” (Estado de S. Paulo, August 26).


    These statements would make it difficult for him to reverse himself and decide to run in 2010. He will be free to run in 2014, but that is beyond the time frame for these predictions.


    Prediction 2: The new President will not be from the Workers Party. The Workers Party has no strong candidates, and knowledgeable party leaders privately express the view that the Party cannot win in 2010. Lula’s heir apparent, José Dirceu, was removed by the corruption scandals.


    Other impressive emerging leaders, such as Belo Horizonte mayor Fernando Pimentel, have not yet developed the needed national recognition. Lula has stated that he may give his support to a candidate from one of the parties in his coalition other than the Workers Party, and suggested that the Party might not even nominate its own candidate.


    By all accounts the strongest candidates are José Serra (governor of São Paulo) and Aécio Neves (governor of Minas Gerais), both of the Party of the Brazilian Social Democracy, and Ciro Gomes (governor of Ceará) of the Popular Socialist Party.


    Geraldo Alckmin, Lula’s last opponent and former governor of São Paulo, is likely to become mayor of the city of São Paulo and may run again for the presidency.


    Governors of major states are traditionally the leading candidates for the Brazilian presidency. Since things have been going reasonably well, Brazilians are unlikely to choose a charismatic outsider in 2010.


    Prediction 3: The new government will continue the market-friendly economic model established by Fernando Henrique Cardoso. On a global scale, the success of China, India and Chile, among others, has convinced most economists and business leaders and many intellectuals that there is no viable alternative to competing vigorously in the global marketplace.


    Economic growth has picked up in 2007, undercutting any remnant of pressure for a return to statist policies. The chances of a shift to a fundamentally different economic model seem very small. The following more specific and testable predictions are corollaries of Prediction Three:


    Prediction 3.1: The Privatization of the Companhia Vale do Rio Doce will not be reversed. The Landless Farmers’ movement and some Catholic activists are lobbying to declare the privatization invalid on the grounds that the company has succeeded so well that it must have been sold too cheaply.


    But getting rich is not a crime in a market economy and the courts are unlikely to rule that the privatization was invalid. The company is paying more in taxes than the profits it made as a state corporation, and it would be too expensive to buy it for its current market value.


    Prediction 3.2: The annual inflation rate of the Brazilian currency will stay in single digits. A stable currency is a strong priority for the Lula government and for any likely government that will follow. Low inflation has also been a global trend, with a few noteworthy exceptions such as Zimbabwe and Argentina.


    This assumes that inflation in the U.S. and Europe will also be low, although some increases are expected in the next five years. The two-digit dividing line is symbolically important and Brazilian authorities will make a real effort not to exceed it.


    Prediction 3.3: A Free Trade Area of the Americas or some equivalent bilateral arrangement will be negotiated. Opposition from the leftover left will be increasingly linked to Hugo Chávez which will lessen its appeal to Brazilians.


    The trend in Brazilian foreign policy is towards greater emphasis on relationships with the major economic powers, and economists and business leaders will see this as important to maintaining economic growth. With the failure of American intervention in Iraq, the post-Bush United States government will be eager to mend relationships elsewhere in the world.


    Prediction 3.4: Brazilian economic growth will be about average for world economies. It will not match the high growth of India or China, but neither will it lag significantly behind the global trend. Continued macroeconomic stability and openness to world markets will encourage investment and growth, but political factors will not allow the tax and spending reforms that would be needed to generate exceptionally high growth.


    Prediction 4: Violent crime rates will decline as other states emulate São Paulo’s success. The remarkable success in the state of São Paulo has demonstrated that effective policing measures can reduce violent crime without a prior lessening of socio-economic inequalities.


    Brazil’s strong gun control legislation will contribute to this as it is more effectively enforced nationwide. This does not state that violent confrontations with drug gangs will lessen, it predicts that the overall violent crime rates, including especially the homicide rates, will decline due to a decline in everyday violence.


    Prediction 5: Corruption will decline as a political issue and Brazil’s ranking on the Transparency International corruption perception survey will improve. The Federal Police and Federal Attorney General have been increasingly effective in uncovering and prosecuting important corruption cases and taking them out of the political arena.


    As important cases such as that of José Dirceu are processed by the courts, corruption accusations will increasingly be handled by the judicial system. It seems likely that the overall level of corruption will decrease, but there is no reliable measure of this so it is not possible to make a testable prediction. The Transparency International survey, based on a survey of knowledgeable people, should reflect the lessening prominence of the issue.


    Prediction 6: Political reform will give political parties a stronger role in the legislature. Recent court rulings have threatened legislators who shifted political parties, and leaders of all major parties support party fidelity reforms.


    Prediction 7: Brazilian elections will increasingly split along north/south lines. Lula and the Workers Party have increasingly built their base in the northeast and in the poorer states based on income transfer programs. These programs impose a tax burden which is a constraint on economic growth in the wealthier southern states.


    Prediction 8: Land reform will peak during the Lula years and the number of families settled each year will decline. This prediction goes against the most recent trends because the number of families settled has increased sharply as the Lula government has finally organized itself to fulfill promises to some of its most militant supporters.


    But the costs of land reform are too high, from 30,000 Brazilian reais (US$ 17,000) to over 70,000 reais (US$ 39,000) per family settled, and there is little “underutilized” land available for settlement. Brazilian commercial agriculture is highly productive and purchasing land to give away is simply too expensive.


    Prediction 9: Deforestation will continue at a rate of at least 10,000 square kilometers a year. This prediction also goes against the most recent trends since the Lula government has recently announced that deforestation was cut to 9,600 square kilometers between August 1 and July 30, 2007. They take credit for stronger enforcement measures that cut it from a high of 27,429 in 2004.


    Nevertheless, the economic forces behind deforestation are very strong and the demand for land to grow soybeans and other crops is high. A global market for ethanol may increase this pressure. Environmentalist forces seem weak in comparison to the developmental pressures.


    These predictions are intended to generate discussion. Readers are challenged to offer predictions of their one, predictions that are specific enough to be testable. In five years we will see how they come out.


    Ted Goertzel, Ph.D. is Professor of Sociology at Rutgers University in Camden, New Jersey. He is the author of a biography of Fernando Henrique Cardoso, available in English and in Portuguese. He can be contacted at goertzel@camden.rutgers.edu and his WEB page can be found at http://goertzel.org/ted.

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