Nathan Shachar: Lula's Legacy

Roundup: Talking About History

[Nathan Shachar has worked as a correspondent in the middle east, Latin America and Spain. His book “The Gaza Strip” (Sussex Academic Press) will be published in December.]

Most foreign news is about broken things: failure, crises, scandals, misery. Rarely does a bombshell of good news sweep everything else off the front page. I had just begun working as a reporter when I saw Egyptian president Anwar Sadat land in Tel Aviv in 1977 and change the middle east for ever. I have only been present at one other such stirringly optimistic, game-changing moment. That was election night in Brazil eight years ago. I was in São Paulo on Paulista Avenue, the skyscraper-lined artery of Latin American finance. The results were in and the socialists had won. The pavements outside the Armani and Ferrari outlets filled up with people from the suburbs carrying drums and hand-painted signs. Trucks appeared with loudspeakers and samba dancers. The business district turned into a carnival of red banners, Che Guevara posters and impatient revolutionary slogans.

At a nearby teahouse, I interviewed some old ladies of the bourgeoisie, who were bracing for the worst. Um operario (a labourer) was going to run their great land. Though once a lathe operator, Luiz Inácio Lula da Silva has mostly held desk jobs, as a union leader and then a politician. But in class-obsessed Brazil, the term “labourer” is more a tribal assignation than a job description.

I wasn’t unmoved by the euphoria on the streets, but I also had more ominous feelings. Much of the new Brazilian optimism that accompanied Lula’s election had been made possible by market reforms begun ten years earlier—and influential leftists were now lobbying for them to be reversed. Many of those celebrating belonged to pressure groups which expected Lula’s Workers’ party (the Partido dos Trabalhadores or PT) to start spending the way the Peronists were doing in Argentina, where export earnings are usually wasted on bribing opposition politicians and subsidising beef. And in the immediate period after Lula’s first election as president, the signs were indeed ominous. Fear of socialism spurred a flight of capital, which drove down the exchange rate and forced the outgoing government to sell dollars desperately. Brazilian bonds found no buyers, credit ratings plunged and it seemed the country might default on its huge foreign debt.

Just after Lula took office on 1st January 2003, the third anti-capitalist World Social Forum began in Porto Alegre. The star speaker was Noam Chomsky, who poured cold water on the new Brazilian optimism. “It will never work,” he said to the media. “Look at the Brazilian interest rates. Look at the debt. The US will never let this happen. The banks won’t either. If they try anything serious here there’ll be chaos.”

Yet these gloomy expectations were not fulfilled. Nearly eight years later, as Lula prepares to step down from the presidency, his two terms must be declared a resounding success. Brazil goes to the polls on 3rd October and the favourite to succeed Lula is his protégée Dilma Rousseff, an ex-guerilla fighter, economist and PT strongwoman. And Brazil’s image has been transformed—once an enchanting bundle of contradictions forever teetering on the brink, the country is now portrayed as an exemplar of developing world progress, its finances the envy of richer nations. A friend of mine who works at the São Paulo stock exchange, which received Lula’s election with trepidation, tells me that he and many of his colleagues favour Rousseff for president “in the name of stability.” This irony is underscored by the fact that her main rival is José Serra of the centre-left Social Democratic party (PSDB). Serra, governor of the state of São Paulo, is an intellectual whose writings supplied the theoretical basis for the market reforms in the 1990s—in the face of protests from the PT.

In spite of a Byzantine tax system and other impediments, Brazil’s economy is booming. Its hugely successful agro-sector will be boosted further in 2012 by the completion of the Transoceanic highway across the continent. This behemoth, construction of which is blasting a corridor through rainforests and Inca highlands, will deliver iron and food from Brazil’s interior to Peru’s ports and then on to China. Brazil’s politics, long a cesspool of vote-buying and football club-like transfers of politicians between parties, is also showing signs of recovery. Most on the left have shed their statist illusions, and a large part of the centre and right have made comparable changes, incorporating the social agenda of Lula’s PT and of the PSDB into their manifestoes. Few politicians openly oppose the PT’s anti-poverty programme, launched as Fome Zero (zero hunger) in 2002 and now called Bolsa Familia (family allowance), which helps 16m of the country’s poor.

Meanwhile, investors are snapping up Brazilian stocks and bonds. Brazil has been generating such impressive returns lately that many foreign observers have become complacent, assuming the country is now coasting towards solid institutions and ever-diminishing poverty. Though a tenuous notion, this has done wonders for Brazil’s reputation and recently won it the two biggest prizes on the international image circuit: the 2014 World Cup and the Rio de Janeiro Olympics of 2016. Neither would have been possible without Lula...

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