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WORLD POLICY JOURNAL
Lula’s Big
Win Latin American elections rarely attract attention in the United States, but the Brazilian presidential campaign that concluded last October 26 was an exception to the rule. This was to some degree expected given Brazil’s increasing importance to global markets. Befitting its rank as the world’s ninth largest economy, Brazil is the recipient of $420 billion in foreign investment, much it from American corporations. However, it was the cast of characters bidding to succeed President Fernando Henrique Cardoso that piqued American interest in the Brazilian elections. Holding everyone’s attention was the front-runner and eventual winner, Luiz Inácio "Lula" da Silva of the left-wing Workers’ Party, widely portrayed in the American media as hostile toward U.S. interests and a potential force for reshaping the Latin American political landscape. Unsurprisingly, the response of Wall Street and Washington to Lula’s victory has been apprehensive. Indeed, the question of what to expect from the new Brazilian administration appeared to have been settled in some quarters of the U.S. foreign policy community even before Lula’s formal inauguration on January 1. The day after Brazilians gave Lula a resounding victory at the polls—with an unprecedented 61 percent of the vote— then-Secretary of the Treasury Paul O’Neill sought to calm nervous investors by noting that "Lula was not a crazy person" and that he was confident of Lula’s capacity "to implement sound economic policies." O’Neill’s backhanded compliments could hardly have served to assuage fears about the impact on global markets of Brazil’s turn to the left. Last August, in an appearance on NBC’s Meet the Press, O’Neill upset the usually polite world of international diplomacy by publicly questioning Brazil’s capacity to manage its economic affairs and predicting economic chaos under a Lula regime. These comments, widely seen in Brazil as part of an effort by the international financial community to discredit Lula and revive the fortunes of his main opponent (José Serra, of the Social Democratic Party), sent the Brazilian currency into a free fall and prompted President Cardoso to demand an apology from the American ambassador. More ominous still are the predictions for Brazil’s political trajectory under a Lula administration, which range from the paranoid to the hysterical to the truly ridiculous. Surveying the range of scenarios being sketched by politicians and pundits, one observer posed the question: "Is Brazil in the final countdown to Armageddon?" 1 In a letter to President Bush timed to coincide with Lula’s victory, Henry J. Hyde, chairman of the House International Relations Committee, warned that Lula is a "dangerous pro-Castro radical posing as a moderate." 2 The New York Times reported right-wing fears about the possible reactivation of Brazil’s nuclear weapons program and an emerging "hostile alliance of Cuba, Venezuela, and Brazil" headed, respectively, by "a triumvirate of Castro, Chávez and Lula." 3 An editorial published in the Washington Times last August cautioned that Lula "could lead Brazil down the dark path toward terrorism given the likelihood that his presidency might foster a radical regime with close links to state sponsors of terrorism such as Cuba, Iraq and Iran." 4 There is a strong sense of déjà vu in these gloomy forecasts. As it has done so often in the past, Washington is grossly misreading political developments in Latin America. The characterization of Lula as a "closet Communist" conveniently overlooks his political evolution and that of the Workers’ Party during the last two decades. Fears that Brazil will turn to Venezuela or Cuba as political models reveal a shocking ignorance about Brazil’s political and economic development. "No one I met in Brazil thinks that Lula would see Cuba, let alone Venezuela, as a model," notes Kenneth Maxwell of the Council on Foreign Relations. "Brazil is far too complex, diverse and sophisticated a society to take such a direction." 5 The specter of Brazil as a nuclear- armed rogue state is simply too bizarre to contemplate and in any case ignores the fact that after Brazil returned to civilian rule in 1985 the government signed an international accord banning nuclear weapons from Latin American soil.
A True Democrat
Lula’s life story, as the Economist aptly put it, is "a saga of social mobility worthy of a Brazilian soap opera." 6 Born dirt-poor in Brazil’s impoverished Northeast and forced by circumstance to abandon his education after primary school, Lula rose to prominence in Brazilian politics in the late 1970s as a leader of a trade union movement formed in opposition to the military regime that took over the country in 1964. In a series of emblematic strikes that did much to erode military rule in Brazil, Lula challenged the legitimacy of the regime and eventually won from the business community and the government a wide range of rights for the working classes. The struggle elevated Lula in the consciousness of the Brazilian public by, among other things, landing him in jail in 1980. He emerged from prison as a leader of the broad pro-democracy movement that succeeded in peacefully removing the military from power in 1985. In striking contrast to other Latin American leaders, whose rise by more dramatic means (Cuba’s Fidel Castro and Venezuela’s Hugo Chávez come to mind) have forced American politicians and policy-makers to sit up and pay attention, Lula spent decades patiently laboring inside the Brazilian political system. This included acknowledging defeat in three previous presidential races, in 1985, 1991, and 1996. More importantly, within the last two decades Lula built his Workers’ Party (PT) into a disciplined and cohesive political organization— no small feat in a country where political under-institutionalization has been the norm. The Brazilian party system is disorganized, with weak roots in society, and of little consequence in the formulation of public policy. Since the inception of democratic rule in 1985, approximately 75 percent of the legislation approved by Congress has originated in the executive branch. Much has been made of the fact that the PT leans to the left in an attempt to make the party seem anachronistic. However, the party, which was founded in the state of São Paulo in 1979, drew adherents by attacking not only Brazil’s traditional conservative parties but also the Brazilian Communist and Socialist parties, which Lula himself has chastised for the irrelevance of their thinking to ordinary Brazilians. If the PT adheres to any ideology, it is to the progressivism that animates the so-called New Left, as evidenced by the party’s championing of such causes as environmental protection and the rights of women, indigenous groups, and homosexuals. The PT has operated as a model of democracy in the five states and seven state capitals it has governed (including São Paulo, the most populous city in the Western Hemisphere and Brazil’s economic engine). It is known for its "participatory democracy" programs that aim to involve ordinary citizens in the governmental decision- making process, especially with respect to budgetary allocations. The party has also been active in promoting the expansion of civil society by forming unions, neighbor-hood associations, and sport clubs. This is the kind of civic associationalism that theorists of democracy pray for and whose "disappearance" from the American political landscape U.S. liberals and conservatives lament. 7
Deepening Brazilian
Democracy
The enthusiasm surrounding Lula’s fourth attempt to capture the presidency may be a harbinger of a new respect for democracy. The elections were a model of efficiency and transparency. International observers declared the elections to have been among the cleanest in Latin America’s history, a major accomplishment considering the size of the electorate (115 million). Key to the success of the election was a newly installed computerized voting system that is currently being praised as a model for other large democracies. A representative of the U.S. Federal Election Commission invited by the Brazilian government to observe the elections says that from what he saw, Brazil’s electoral system is "outstanding." 10 Lula’s victory is also good for democracy in Brazil in the promise it holds for improving the lives of millions of Brazilians. Despite having Latin America’s highest per capita income and notwithstanding the notable achievements of the Cardoso years (especially the taming of inflation, improved access to education and health care, and reductions in the levels of extreme poverty), Brazil remains a country of staggering economic disparities. According to the World Bank, the top 20 percent of Brazilians earn 26 times what the bottom 20 percent earn. (In the United States the ratio is 9 to 1, and in India it is 5 to 1.) It is hardly surprising then that Lula’s promises to create 10 million jobs and double the purchasing power for the nearly one-third of Brazil’s 175 million people who live in poverty have resonated so deeply with ordinary Brazilians.
Why Washington
Needs Lula to Succeed
The apparent failures of the Washington Consensus present the United States and the international lending community with a conundrum, since future Latin American elections are unlikely to produce leaders willing to back its economic prescriptions. Indeed, in the aftermath of Argentina’s meltdown we should expect most office seekers in Latin America to make opposition to the Washington Consensus the cornerstone of their political platforms. In the worst-case scenario, future elections in Latin America will produce the likes of Hugo Chávez, who is not only openly hostile toward the United States, but more worrisome yet, contemptuous of democratic institutions and practices. In the best of circumstances, Latin American elections will yield leaders like Lula, who while challenging prevailing economic orthodoxy are committed to the democratic process. There is little indication that Lula, despite his left-wing rhetoric, wants to radicalize Brazilian society. Oddly enough, the conventional wisdom in Brazil at present is not that Lula will be too radical, but rather that he will be too moderate given the many compromises he was forced to accept and deals he made in order to get himself elected. He is committed to honoring Brazil’s debt obligations, which total $264 billion, and abiding by the terms of the $30 billion bailout recently negotiated by the Cardoso administration. He has gained the support of many in Brazil’s conservative business community by selecting José Alencar, a wealthy industrialist, as his vice president. He has also signaled that he will appoint market-friendly technocrats to run the central bank. And since the election, he has opened talks with the unions, employers, and opposition parties in the hope of negotiating a broad social pact aimed at forging a common approach to macroeconomic policy. The contrast with Chávez, whose attacks on both labor and business have brought Venezuela to the brink of civil war, could not be starker. This is not to say that Lula’s newfound moderation will ensure smooth sailing for U.S.-Brazilian relations in the years to come. A powerful critic of globalization, Lula has made clear his opposition to the expansion of the North American Free Trade Agreement (NAFTA) into South America, which he views as "annexation rather than integration." It is in Washington’s best interest to take Lula’s concerns about NAFTA seriously and to see that his domestic agenda succeeds. Indeed, should Brazil falter under Lula’s leadership, the consequences would be far-reaching. As Latin America’s most important economy and its largest democracy, Brazil is key to any expansion of the project of economic integration south of Mexico and a central player in the political stability of the region. The United States should capitalize on Brazil’s rising international profile—not to speak of Lula’s personal prestige and increasing popularity across Latin America—as it tackles the crises it faces in the region, most urgently the escalating conflict in Venezuela and Colombia’s endless war. • *Omar G. Encarnación is associate professor of political studies at Bard College. He is the author of Civil Society in the Age of Democratization: Myths, Realities and Lessons, St. Martin’s Press, forthcoming. Notes 1. Carmen Gentile, "Why Fear Lula?" United Press International Online (October 2002). 2. Letter to President George W. Bush from Representative Henry J. Hyde, Chairman, International Relations Committee, U.S. House of Representatives, October 24, 2002. 3. Larry Rohter, "Relations with U.S. a Challenge for Leftist Elected in Brazil," New York Times, October 31, 2002. 4. Gentile, "Why Fear Lula?" 5. Kenneth Maxwell, "Brazil: Lula’s Prospects," New York Review of Books, November 19, 2002. 6. "The Meaning of Lula," Economist, October 5, 2002, p. 11. 7. See, for example, Robert Putnam, "The Strange Disappearance of Civic America," American Prospect, December 1, 1996. 8. "Freedom in the World Country Ratings, 2001-02," www.freedomhouse.org/ratings/index.htm. 9. Marta Lagos, "Between Stability and Crisis in Latin America," Journal of Democracy, vol. 12 (January 2001). 10. Larry Rohter, "Brazil Sets an Example in Computerizing its National Elections," New York Times, October 30, 2002. [Go to interactive discussion forum]
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