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President Lula

Lula’s victory in Brazil’s October elections was a massive rejection of neo-liberalism, but the new Workers’ Party president will not be able to meet the expectations aroused unless there is a real break with the policies of Cardoso and the IMF. ANDRÉ FERRARI reports from São Paulo.

LULA POLLED THE largest vote in the history of Brazil and the second biggest vote ever worldwide. Luis Inácio ‘Lula’ da Silva, the Workers Party (PT) leader and former metalworker, won the second round on October 27 with 52.7 million votes (61.7%). His opponent, José Serra, the candidate of president Fernando Henrique Cardoso’s right-wing coalition government and preferred by big business, bankers and the IMF, polled 33.3 million (38.7%).

The first round of the elections on October 6 saw the PT increase its seats in congress (from 59 to 91) and in state legislative assemblies. In the senate too, the PT doubled from seven to 14 senators to become the third force. In some states the PT now has the largest parliamentary group, for example in São Paulo, where it has 20 state deputies. In state gubernatorial elections, the PT made the second round in eight states – after taking two governors (Acre and Piauí) in the first round – although eventually it won only one more governorship (in Mato Grosso do Sul).

For the first time, the PT made the second round for governor of the state of São Paulo, where the PT candidate Genoíno got 41% against 58% for Cardoso’s Brazilian Social Democratic Party (PSDB) candidate and current governor Alckmin. In Ceará, PT candidate Airton lost by only 3,000 votes to the PSDB representative of the local oligarchies. In Brasília Federal District, the PT lost by only 5,000 votes to the corrupt gangster Roriz, candidate of the Brazilian Democratic Movement (PMDB). In both cases the PT is due to take legal action.

The most significant defeats for the PT, however, were in Rio Grande do Sul, where it had the sitting governor, and in the state of Rio de Janeiro where the PT gubernatorial candidate, Benedita da Silva, was defeated in the first round (although Lula still got an incredibly high vote there in the presidential election).

In Rio Grande do Sul, the PT candidate for governor and current mayor of Porto Alegre, Tarso Genro, was defeated by the PMDB’s Rigoto, who was actively supported by all the local conservatives forces. The defeat reflected a certain decline in support for the PT state government headed by Olivio Dutra, who had created expectations of major changes but was unable to deliver. Dutra had lost the PT’s internal primary election and was not even a candidate. In fact, in many cities run by PT mayors, Lula’s vote was below the national average. This reflects the frustrated expectations of PT supporters when local representatives govern within the narrow limits imposed by the economic crisis.

The defeat of the PT in the Rio de Janeiro gubernatorial race, on the other hand, was a reflection of the policy of the PT national leadership, which had previously forced the local PT to support the state government led by Anthony Garotinho (PSB). The PT later broke with Garotinho although it continued as vice governor in a terrible situation of violent crime and chaos in the state. This opened the way for Garotinho’s demagogic populism to gain an echo and his wife was elected governor to succeed him.

The PT national president José Dirceu has already stated that Lula must look for support from 14 state governors, of whom only three are PT ones (in the small states of Acre, Piauí and Mato Grosso do Sul). In congress also, the PT block and its allies do not have a majority and they are looking for alliances with sections of the PMDB and maybe the Liberal Front Party (PFL).

Serra and Cardoso’s PSDB won seven state governors, held São Paulo and gained Minas Gerais, which are both major states, and is set to lead the opposition to Lula.

The significance of Lula’s victory

DESPITE THE PROFOUND changes in the PT in recent years, the moderate position of its leadership and their search for alliances with sections of big business, Lula’s victory reflects a powerful desire for change by the majority of the Brazilian people.

It was a vote against the results of eight years of neo-liberal policy under Cardoso, against unemployment, falling real wages, degraded public services, the consequences of privatisations, and the rising level of violent crime in the cities due to the crisis. It was also a vote against Cardoso’s tolerance of corruption involving traditional ‘regional boss’ politicians. Lula’s election was therefore a setback for the national and international bourgeoisie and a step forward for the Brazilian working class. The most important consequence is that a new stage in the class struggle is now opening up after a difficult period for the mass movement during much of the 1990s.

The PT did not win the elections because it became more moderate and allied with sections of the bourgeoisie. It won because it has a 22-year history of struggle and resistance. This image of opposition to the system had consolidated Lula’s candidacy as the channel for the mood for change, so the main concern of the PT top leaders over the last period was to ‘convince’ the international investors. Not a word was uttered during the election campaign without weighing up its likely impact on the investors. Lula committed to the agreement signed by Cardoso with the IMF, and reiterated continually that all existing contracts will be honoured and no unilateral steps taken. Alliances were made with the traditional parties and regional bosses of the Brazilian bourgeoisie. Lula’s vice-presidential candidate was José Alencar, a Liberal Party senator who is one of Brazil’s biggest bosses, and he was supported by two former-presidents – José Sarney and Itamar Franco. In the second round he attracted support from even more bizarre sources, such as the old North-eastern oligarch Antonio Carlos Magalhães (PFL), and the ex-minister of the military regime Delfim Netto, whose measures against workers’ interests caused the first metalworkers strikes led by Lula in 1978 and the formation of the PT itself (see box).

Lula’s programme for government is based on economic growth and a ‘social pact’ of workers, bosses and government. The social pact became the great magic wand which would overcome the basic contradiction between the intention to solve the enormous social problems and, at the same time, meeting the demands of the financiers and the IMF.

Lula’s ‘Peace and Love’ policy did not generate the active enthusiasm of previous campaigns such as in 1989, particularly among sections of the youth. Nevertheless, Lula did have the support of the main workers’ and youth mass organisations, the main union federation, the CUT, the Landless Workers Movement (MST), and the national student organisations (UNE and UBES). In the last phase of the campaign particularly, there was more involvement by activists in backing Lula.

The campaign was conducted in the context of the Cardoso government’s crisis and its neo-liberal policies. Serra and the PSDB oscillated between identifying with the Cardoso government and distancing themselves from it, beginning with ‘continuity without continuism’ and then switching to ‘change yes, but with safety’. Their attempts to sow panic about the ‘Argentinization’ of Brazil under Lula, with top artists declaring on TV ‘I am afraid of a Lula government’, did not have the same effect as in 1998, when Cardoso still had some support for axing hyperinflation. 2002 was completely different. ‘Hope won out over fear’, as Lula said.

The PT’s turn to the right has been raised as the main reason for Lula’s victory in this, his fourth presidential race. But the truth is that the PT victory reflected the crisis of neo-liberal policies, the undermining of Cardoso’s support, and the absence of clear alternatives for the bourgeoisie. The distinguishing feature of the PT in this context was not its moderation but its past of struggle and consistent opposition to the previous governments. The mass of the people, moreover, identified with Lula’s personal history as an immigrant to São Paulo from the Northeast, someone who has known hunger and unemployment, been exploited in a factory, and watched his first wife and newly-born baby die in a public hospital, which added to the PT’s past record as the party of the common people, the only one not wholly corrupt and not blamed for the current state of things.

Many of the PT rank-and-file, moreover, preferred to close their eyes to the moderate policy in the campaign. There was and is a very strong idea that moderation was just a tactic to win the election and that once elected, Lula and the PT can go back to the combative stance that marked much of the PT’s past. This expectation reflects the fact that the PT still has decisive authority among the vanguard and sections of the masses of the working class and youth. The PT is not just an electoral phenomenon. Although there are now many more contradictions than before, the PT is still the political leadership of the workers and peoples’ movements. Lula’s victory and his future government with bourgeois allies is also a milestone in the sense that it will test the authority of the PT over the organized social movements and is likely to encourage a process of recomposition and reorganisation of the left.

Lula and the PT could have consciously worked to transform the pro-change sentiments into a clearer awareness of what policies could in fact promote a profound transformation. This higher level of class-based and anti-capitalist consciousness could have been translated into organisation and struggle. It would not have undermined Lula’s electoral support but, in fact, would have created the conditions for a mass struggle, the necessary condition for real changes. But the actual PT policy was not just an electoral tactic. The strategy and programme are not socialist but seek to run capitalism better than the capitalists themselves.

Lula and the Brazilian crisis

THE GREAT CONTRADICTION facing Lula and the PT is the inevitable clash between the enormous expectations generated and the limits imposed by the economic crisis and the moderate programme of the PT today. Brazil is in a very tight corner and nothing was solved by the last agreement with the IMF in September.

After eight years of Cardoso and an average GDP growth of 2.3%, unemployment is higher than ever. Average income has fallen and social inequality is still obscene. Violent crime has reached alarming levels. Public services were wrecked and privatisation only worsened things, as proved by the electricity rationing crisis last year. The concentration of land in the hands of a tiny minority continues and there are constantly violent clashes on the land. There are 52 million people living in the most absolute poverty. Hunger, endemic diseases due to poverty, semi-slave work, etc, all make Brazil a world champion of social inequality.

Even with US$90bn coming in from privatisations, Brazil’s public debt jumped from 30% to 60% of GDP during Cardoso’s government. Dependence on foreign capital has been taken to an extreme. The constant threat of ‘default’ haunts the country. In recent months, a moratorium was only avoided due to the new IMF loan. The problem was just put off but it will return. And with 80% of the public debt in the hands of domestic creditors, a default would create a crisis as in Argentina with banks and business failing and enormous social costs.

The September IMF agreement was an attempt by the foreign banks to prepare for a possible moratorium in the future. Most credit lines have been blocked, leading the Brazilian Central Bank to hike interest rates, and the currency has been more heavily devalued than at any time since it was introduced in 1994.

The IMF agreement was based on a target of a budget surplus (of income over expenditure, before interest charges) of 3.75% of GDP for 2003. This would mean scarce funds for social spending. But in fact everybody knows that this is insufficient and was only adopted to facilitate agreement between the presidential candidates. The finance market wants blood and some are talking of a 6% target. Given the international crisis of the capitalism, the only possible choice for the capitalists would be to decide which is the lesser evil: the social costs of more spending cuts or the social costs of a collapse of the Brazilian economy.

Lula hopes to escape from the dilemma between maintaining Cardoso’s monetarist policy and seeing the country collapse, by returning to a higher rate of economic growth through increased exports and a gradual increase in income to expand the domestic market. In fact, Brazil has recorded trade surpluses in the last period, but this has been due to a fall in imports caused by recession and the weak currency and not to a significant increase in exports. During a recession in the international economy, the aim of increasing exports will meet with serious obstacles. In reality, if the IMF agreement is kept to, not even a limited national-development policy is possible in Brazil.

One sector of big business thinks that since the PT has a broad social basis and roots in the working class, it will be able to call for a social pact and sacrifices from the people, who have always borne the burden of crises. Their problem is that the PT’s base in society did not elect Lula for more sacrifices but to put an end to them. There are enormous expectations in the new government. Urgent measures to combat hunger have already been announced. More measures of social assistance to mitigate the gravest effects of the crisis will be taken. This may have some impact, but they are palliative measures of limited reach.

Many workers accept the idea of a social pact as a way of getting more concessions from the bosses and bankers in a peaceful way without provoking more turbulence in the economy. When it becomes clear, however, that the larger part of the burden is to be carried by the workers, the probable initial honeymoon period will end. There is an enormous ‘backlog’ of demands in the social movements.

Federal civil servants are quite extensively organized and linked to the CUT; they have had no inflation adjustment for almost eight years. Several sectors have enormous accumulated losses to make up and they hope to get back their purchasing power. Another challenge for the new government will be the minimum wage, which is now a miserable 200 reais (about US$54). Even some PT parliamentarians are calling for an increase to around US$100 dollars in May 2003, which is not the intention of the PT members in the future government.

The prospect of closing companies and layoffs on a large scale may lead to very sharp conflicts. The struggle against unemployment has not reached the level of the battles in Argentina, and the ‘pickets’ movement there, but the potential is there. Also the demand for land, and for credit to plant crops, will mean heavy pressure from the landless.

The newly-elected state governors will also be pressing for debt rescheduling and more social spending. The PT in federal government will tend to avoid rescheduling at least during 2003, but a financial crisis in the states could complicate the situation.

The initial struggles may not be directly against the Lula government, but to press the elites to make concessions. Lula will try to balance between the two sides but over time he could lose the support of both of them. At that point, a bourgeois opposition headed by the PSDB and sections of the PFL and PMDB would try to use the crisis to recover their strength. The 2004 municipal elections will see a hard-fought clash between the forces of the Lula government and this right opposition.

Lula wants to avoid scaring investors or clashing with the IMF. At the same time, an aggravation of the crisis in the context of polarisation in society may push the government to take unorthodox measures, regardless of his intentions.

In the first few days after his victory, Lula repeatedly said that he would not ‘betray the expectations’ of all those who voted for the PT expecting real change. But this will not depend exclusively on the personal intentions of Lula; what is needed is a policy capable of tackling the economic crisis without punishing still more the workers and poor. The current PT programme does not consistently pose such a policy. It is not possible to meet the expectations of the social basis that elected Lula and at the same time satisfy the financial market and the IMF.

A left alternative

THE PT LEFT emerged relatively strengthened from the elections. Although in most cases, its campaigns did not have clear left profiles, almost 30% of the federal deputies, two senators, and many state deputies, hold positions to the left of the PT majority leadership. Two candidates on the left of the PT, Zé Maria (PSTU) and Rui Pimenta (PCO), got votes well below expectations (400,000 – 0.4%, and 30,000 – 0.05%), reflecting the strength of Lula’s candidacy despite the PT’s turn to the right.

Overall however, while the left inside and outside the PT is still dispersed with no firm alternative to the majority leadership, there are now conditions developing for the left to be reinvigorated. The next period, with the experience of Lula in government, will see room for the left to develop against the majority positions. Sections of the PT rank-and-file who believed that Lula’s ‘peace and love’ policy was merely a temporary electoral tactic, will reach the conclusion that this is really the long-term strategy of the party leaders and will look for an alternative. A process of recomposition and reorganisation of the left will develop in this context.

The key task for the socialist left is to develop the social movements in the next period. Only great mass struggles will provide the conditions for the growth of a left and socialist project. The left should explain that voting in Lula was an important step, but it was just the first. It is necessary now to take to the streets, mobilize the workers and youth, and conquer our rights through struggle.

Lula has been declaring that ‘Brazil is changing in peace’ and he promises to govern for all sectors of society through dialogue and negotiation. But there is no way to tackle the crisis without making some sector of society pay for it. The balance of forces will determine whether the working people will once again bear the burden of the crisis or if this time the working class will defeat the national and international elites – even if this means overcoming the limitations of the PT leaders in government.

The left should denounce the agreement with the IMF and demand a government without bourgeois parties or politicians. The real choice for a workers government would be to stop paying off the debt because the country has fallen on its knees, or to stop paying off debt to the big capitalists in an assertion of sovereignty, organizing and mobilizing the workers and moving forward with an anti-capitalist programme.

Such a programme would have to pose the nationalisation of the banks and financial system under democratic workers’ control, the renationalisation of the privatized companies, and the nationalisation of those companies required to implement an economic development plan to raise the minimum wage, reduce the working day to create jobs, and meet the demands of the organized social movements.

The experience of the PT in the government will mean even more adaptation of the leaders to the capitalist system. At the same time, however, this will lead to opportunities for a consistent PT left. A settling of accounts between these two sides is inevitable. The construction of a new mass workers’ party, a left-wing socialist one, may be posed at a certain stage. Therefore the PT left should take the political and organisational step of building a clearly socialist political project and seek unity in action in this battle.

Polarisation in Latin America

LULA’S VICTORY HAS taken place in the context of major turbulence throughout Latin America. The workers and oppressed masses have responded to the crisis with mass mobilisations in Argentina, Uruguay, Paraguay, Peru, Ecuador, Bolivia, and elsewhere. Electorally too, there have been advances with the coca-growers leader Evo Morales coming second in the Bolivian elections and ex-captain Lúcio Gutierrez, an active participant in the people’s revolt of January 2000 in Ecuador, reaching the second round of the presidential elections there.

Latin America is experiencing polarisation that is also reflected in the situation of Chavez in Venezuela. The failure of the attempted coup in April 2002 showed the strength of mass resistance. But if there is no clear anti-capitalist alternative, the bourgeoisie and imperialism will try again. Also in Argentina the absence of a left and socialist mass alternative limits the revolutionary potential of the ‘Argentinean uprising’.

Lula’s victory in Brazil will encourage resistance to the Free Trade Area of the Americas (FTAA) and neo-liberalism throughout the continent. Imperialism would prefer to co-opt Lula instead of clashing with him, but a PT government will lose support by not meeting the expectations of profound change.

The failure of neo-liberalism means that in many countries reformist and populist alternatives have emerged preaching national development on a capitalist basis. The experience of these alternatives in power will show that they are not able to overcome capitalist crisis. Only a socialist Latin America can meet the demands of the masses and offer a way out.

The origins of the PT

IN MAY 1978, during the military dictatorship that ruled Brazil from 1964 to 1985, the workers at Saab-Scania in the ABC industrial complex of São Paulo walked out and led a metalworkers strike that spread throughout the industry and opened up a new stage in the struggle of the Brazilian workers’ movement.

A new generation of Brazilian workers had emerged in the industrialization of the 1960s and 1970s. The 1978 strike was the beginning of an ascent of mass struggle that toppled the military regime and heroically resisted the anti-working class policy of the civilian governments that followed. In 1980, two years after the historic mobilisation in ABC, the Workers Party was founded to "create a channel of political and party expression for the urban and rural workers and all those exploited by capitalism" (PT Political Declaration, October 1979).

The PT attracted all the best and most combative elements in the unions, both those led by left forces and the opposition slates in the ‘yellow’, government-sponsored unions. It brought together in one single political movement of the left urban movements influenced by the rank-and-file of the progressive Catholic Church, the rural workers’ movements, left intellectuals, and the remnants of old left organisations, splits from the Communist Party and the armed resistance to the dictatorship. The PT’s first official membership card was issued to Mario Pedrosa, former Trotskyist in the 1930s who took part in the Fourth International founding conference in 1938.

Unlike the traditional left of Stalinist origin – mainly the pro-Moscow Communist Party (PCB) and pro-Chinese PCdoB – or the centre-left intellectuals (like Cardoso, for instance), the early PT posed the need for a clear class independence and refused to adapt its policy to the bourgeois opponents of the dictatorship such as the Brazilian Democratic Movement (MDB). The October 1980 founding manifesto declared that "the PT is born of the political will of the workers, who are tired of being manipulated by the politicians and parties committed to maintaining the present economic, social and political order". In its 1979 Charter of Principles, the pro-PT movement emphasized that the new party would "refuse to affiliate representatives of the exploiting classes... the Workers Party is a party without bosses!".

It also rejected the populist-nationalist legacy of the old Brazilian Labour Party (PTB) of Getúlio Vargas, a kind of Brazilian Perón. The PT declared: "The efforts to revive the old PTB... are no more than an attempt to enlist workers for the defence of the interests of sections of the Brazilian bosses... We denounce their attempts to deceive the Brazilian workers... and manipulate them for their own aims" (Charter of Principles, 1979).

The PT emerged at the same time as the Sandinista revolution in Nicaragua and the Polish workers’ mobilisations against the Stalinist Jaruzelski regime. The influence of those events led the PT to adopt a critical attitude to the traditional social democratic parties and to the Stalinist regimes, at the same time as expressing solidarity with revolutionary struggles in Latin America. The profound working class roots of the PT, its mass base and its class and anti-capitalist positions, made the party into the pole of attraction for the combative left in Brazil and the continent.

After the enormous mass mobilisation throughout Brazil for ‘Direct Elections Now’ in 1984 – rejecting the policy of transition ‘from the top’ from a military regime to civilian government – the PT refused to attend the electoral college that indirectly elected Tancredo Neves and José Sarney as president and vice-president. In fact the PT expelled three federal deputies who voted for these candidates of the bourgeois opposition to the military regime.

As the party of consistent opposition to the Sarney government, who succeeded to power after the death of Tancredo Neves, the PT became the great hope for change for millions of Brazilians. After electing a number of mayors in the 1988 elections, the PT stood Lula as candidate for president in 1989, in the first direct elections after the 1964 military coup. After a campaign with the PT rank-and-file playing a highly active role, Lula lost by a small margin to Collor, a corrupt adventurer adopted by the bourgeoisie as their final means of barring Lula.

Subsequently, that electoral defeat, together with the impact of the collapse of the Stalinist regimes of the USSR and East Europe, the defeat of the Sandinistas in Nicaragua, and the major capitalist ideological offensive of the 1990s, all pushed the PT leaders toward more moderate positions than those of its origin. The PT congress in 1991 marked the beginning of a new stage for the party, with the majority leadership moving toward a social democratic stance. The absence of a clear socialist project and the pressure exerted by the positions the PT had won within the bourgeois state, caused a turn to the right that was a feature of the PT during most of the 1990s.

The PT lost an opportunity to win the presidency in 1992, when a mass movement toppled Collor and the leadership supported Itamar Franco, the vice-president, instead of demanding new elections. Subsequently, during the Franco government the bourgeoisie began to reorganize and launched the Real Plan, with Cardoso as candidate for president. Illusions in economic stabilisation and the end of hyperinflation gave Cardoso a first-round victory in the 1994 and 1998 elections.

Cardoso’s first government brought Brazil up to speed in applying neo-liberal policies and managed to curb the mass movement. But the second government was marked by crisis from beginning to end. It was in this context that the PT increased its support in the 2000 municipal elections and has now won the 2002 presidential elections.

The PT today is no longer the same as the original PT. Nevertheless, a lot of its authority remains in place. Most of the vanguard, activists and leaders of the mass organisations of the youth and workers are still PT supporters. The workers’ experience of a PT government will be a decisive milestone on the road to the construction of a mass left alternative to the programme of the party leadership.


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