After the overthrow of the
government of Joao Goulart in April of 1964, Brazil was ruled by a military that
governed the country as an institution. Brazilian generals established the
National Security Doctrine under which they believed that the military was the
only force in Brazil that could win a war against “communism.” The generals
ruled be decree and via an alliance with technocrats from the UDN (National
Democratic Union Party, a conservative party in Brazil). The presidency was
viewed as an “elected office” even though the president was picked by the
military. The military did not allow elections, eliminated unions, and closed
down the Congress. The military crushed civil society and prevented the
development of independent interest groups. With weak interests not being able
to keep the government accountable, the elites in the bureaucracy grew even
stronger. Guillermo O’Donnell called this type of regime a bureaucratic-authoritarian
regime (See Jorge Nef). The government became stronger and non-responsive to
the needs of the majority of the Brazilian people. They crushed any perceived
challenges to the government whether real or imagined.
Eventually, to create a façade of
democracy, the military created two political parties, both controlled by the
military: ARENA or the National Republican Alliance (the Right) and the MBD or
Brazilian Democratic Movement. The traditional state political machines were
strengthened as the generals viewed these machines as useful for maintaining
control. This control also worked through the government’s provision of
resources to local elites who maintained control at the local levels through
patronage (the dispensing of goods and services to clients who would not rock
the boat). Thus, Brazil’s long
tradition of elite-brokered politics continued into the military period despite
the military’s claim that it was altering Brazilian politics. Those who made a
living through business—the bourgeoisie—did not have to accommodate to the
poorly organized popular forces.
A number of problems began to shake the
military regimes in the 1970’s. One problem was the energy crisis. Brazil had
little oil and the OPEC cartel had raised oil prices to record levels. Costs
rose as jobs were lost. The government had to borrow to increase oil imports.
This increased the debt so that by 1976, Brazil’s debt was about $27 billion
(highest among the Less Developed countries) and 40% of Brazil’s exports went
to pay the interests on the debt. Also,
there was rising impoverishment. By
late 1976, the purchasing power of workers had declined by 30%, wages lagged
behind inflation, and food prices were rising above inflation at 45-130%
increase for staples.
Fearing that the military would
lose legitimacy, the generals, beginning in 1975, initiated a period known as
“decompression” or “distensão.” This
new policy was designed to gradually move Brazil toward a carefully controlled
democratization. In order to
appease the hard-line members of the military, they were given hefty pay raises
in January of 1976. The military
proved not to be more able than civilian elites in meeting the basic needs of
Brazilians.
1978-1984 THE DECOMPRESSION PERIOD
Especially under the rule of João Figuereido, the policy of decompression
was slowly extended and now labeled “abertura.”
In 1982, elections for governors and mayors were allowed as part of the
abertura process. Presidential
elections were scheduled for 1984.
·
Elections were to be indirect.
· Electors were to be nominated by the ruling party, which was the party of the military. There were 688 electors to select the president.
· Important sectors of the military, business, and finance wanted direct elections. Between April 10 and April 16, 1982, 1.5 million people demonstrated for direct elections in Sao Paulo and another 1 million in Rio.
The military cracked down
on journalists and forced 113 members out of the lower house of congress in an
attempt to defeat an amendment to the constitution. The amendment was defeated for lack of a quorum after members
of the congress were expelled. Ninety
percent of the Brazilian population favored direct elections.
For its part, the military viewed direct elections as a provocation.
Consequently, an electoral college (via a gerrymandered process) selected
Tancredo Neves as president of Brazil. Neves died without ever taking the presidency and his vice
president, José Sarney, became president.
Sarney accommodated to the military and his presidency (1985-1989)
changed little for most Brazilians.
· Sarney was an ally of the military and of the powerful landed interests in the northeast.
· With the 8th largest economy in the world and producing a $17 billion trade surplus in 1989, Brazil also had 8 million abandoned children. Fifty percent of the households earned below the monthly minimum of $120/month.
· State capitalism benefited the wealthy with taxes breaks alone eliminating 25% of the potential tax revenues.
· The government increased internal borrowing at high rates that led to high inflation running in the millions of percent in the late 1980’s.
·
In 1987, Sarney was forced to declare a unilateral moratorium on
debt payment. In 1989, Brazil
informed bank creditors that debt service payments would discontinue.
The country was ready for change.
The 1989 elections were the first elections held with a direct vote for
the president. The leading
contenders were:
1. Fernando
Collor de Mello: Collor was a member of a traditional northeastern political
family from the backward state of Alagoas. He had no real partisan base and no real social base.
He was the creation of a media syndicate known as O Globo.
He created an amalgam of technocrats, sectors of the middle class, and of
some poor voters attracted to him because he ran against corruption.
Using this base, he cobbled together a new party called the National
Renovation Party. Much of his
support was soft and was based on fear of another candidate, Luís Inacío da
Silva, known as “Lula.”
2. Lula:
Lula was the candidate of the Worker’s Party (PT).
He had led a number of strikes as leader of the metal workers’ union in
Brazil and ran as a socialist candidate.
3. Lionel
Brizola: Former governer of Rio
and candidate for the Democratic Labor party.
The military threatened to resist revolutionary violence in
a thinly-veiled attack at Lula. Despite
this, Lula was able to obtain 48% of the vote in the first direct elections.
In 1989, at the time of Collor’s election, the economic commission for
Latin America reported that 58% of all Brazilians were indigent. This means that there were 90 million people whose average
family income was less than $58/month. One
thousand children died daily of preventable diseases. Brazil had the highest infant mortality rate in Latin America
after Peru and Bolivia. In Brazil,
there were 15 million children living in the streets. The top 10% got 53% of Brazil’s national income.
The bottom 50% got only 10% of Brazil’s national income.
Only Honduras and Sierra Leone had a worse distribution of income in the
entire world according to the World Bank. Under
these conditions, Collor was elected president.
Collor’s
slogan was, “Anyone in my government who steals goes to jail.”
He won the elections because parties in the Brazil were poorly developed.
Collor was aided by a rampant cynicism that held that the less connected
to organized social forces, the less corrupt and stronger a politician would be.
Collor was a moralistic demagogue typical of Brazil’s political right.
He was able to raise $100 million from the business oligarchy in order to
defeat Lula.
Funded
by the very people he said he would oppose, Collor ran a typical International
Monetary Fund program of austerity. Thus,
in 1990, Brazil’s gross national product dropped 4.7% and unemployment
increased dramatically including 100,000 cashiered state employees.
To curb inflation, he froze $115 billion out of the $150 billion in the
country’s bank accounts. This
didn’t win him the support of the middle class nor did it succeed in curbing
inflation. The economic model that Collor adopted was inappropriate for
Brazil (as it is for most poor countries).
It increased the income gaps between rich and poor, it failed to provide
sufficient employment, and it destroyed the environment and local agriculture.
Collor
was forced to resign in 1991. Ironically,
it was corruption that led to his demise. His
own brother revealed that a close advisor to Collor had agents in the state
bureaucracy who were required to skim off millions from government contracts.
This advisor also directly extorted millions of dollars from
businesspeople with government contracts. Thus,
the first directly elected president of the post-military era was forced to
resign in disgrace. Itimar Franco
headed the next government.
Itimar
Franco continued enforcing the IMF programs that produced growing social and
economic inequities. Crime skyrocketed as the slums (favelas) were organized by
drug lords operating drug syndicates. Uncontrolled inflation, deficits, and
growing debt plagued Brazil’s economy. As the 1994 elections loomed over the
horizon, Brazilian conservatives feared that “Lula” might be able to pull
off the victory that narrowly eluded him in the previous election.
Towards
the end of the Franco term, Fernando Cardoso was named treasury minister in a
move aimed at placating criticism of the government. Cardoso, a world-renowned
political economist and founding figure of “dependency theorist,” was able
to reduce the rate of inflation. This heightened his visibility in the next
elections because as a leading intellectual of the Left, he would draw away
support from Lula. As a more moderate “leftist,” he won the support of
conservative forces who feared Lula more.
Cardoso
ran stressing macroeconomic stability. He defended the rights of the indigenous
people, attacked racism and the impunity of the police forces. He had a varied
political base that supported him as the “Anybody but Lula” candidate. His
initial success in curbing inflation helped him in his effort to change the
constitution to allow for a second term at the presidency. Thus he was able to
run again in 1998. In 1998, he got 54% of the vote to Lula’s 31%.
In
1998, after the drop in Russia’s economy and the decline of Thailand’s “bhat,”
foreign investors were wary of putting their money into “emerging economies”
such as Brazil’s. The Brazilian economy declined and Brazil was forced to get
a 41.5 billion dollar loan from the International Monetary fund. The loan was
contingent on the Brazilian government’s agreeing to a government budget
surplus calculated as a percentage of Brazil’s Gross Domestic Product (3.1% of
GDP in 2000; 3.25% in 2001; and at least the same for 2002). This could only be
achieved through more austerity and thereby not meeting Brazil’s social needs.
Even the conservative president of the Senate called on Cardoso to raise the
minimum wage to $180 per month. Meanwhile, the International Monetary fund
called on Brazil to sell state owned enterprises to fund Brazil’s debt, which
at that time was set at $230 billion.
Individuals
within Cardoso’s governing coalition attacked the IMF privatization scheme. In
the end, Cardoso, the founder of dependency theory, served the IMF well in
maintaining fiscal restraint, advancing privatization, and restraining
inflation. But he did this without attacking Brazil’s many social problems.
Like his predecessors, his policies increased income inequality, failed to
provide employment, and failed to dislodge entrenched local elites that help to
sustain these inequalities. It is within this context that Luis Inacio Da Silva
(Lula) is elected president in October of 2002.
The Era of Lula- Lula was elected president in the
first round of the October 2002 presidential elections. He was one of the
founders of the Workers Party (PT) that was formed in 1980 as the “party
without bosses.” Since then, the PT has gradually shifted an has become a
practical social democratic party whose main goal is tax reform to stimulate
production and exports. Lula has formed alliances with powerful players in the
domestic economy (national capital) in order to win elections and to gain some
independence from international capital. This is reflected in selection of Jose
Alencar of the rather conservative Liberal Party as his vice presidential
running mate. Alencar is owner of the country;s largest textile company and has
a fortune estimated at 500 million dollars. Lula thinks Brazil’s economic
recovery wil come “from the productive cpacity of industry, agriculture, and
tourism and not from borrowed
money. Thus the leading brokers such as Goldman Sachs and Morgan Stanley Dean
Witter recommended their investors transfer holdings from Brazil to Mexico
because they feared a Lula victory.
Despite
strained tensions with Lula and the PT because of its growing moderation to win
elections, the PT has managed to maintain most of its original social base (the
Unified Confederation of Workers, the Union force, intellectuals, church
activists, and the MST or the Movement of the Landless).
Both the PT and the MST have had some members killed. Between 1988 and
2000, more than 1500 rural workers (many of them MST militants) were killed in
Brazil but only 10 convictions have resulted. Three PT mayors have been
assassinated and many other party leaders have been threatened.
Fearing
creating alarm in international markets, Lula refrained from supporting the
repudiation of Brazil”s debt (which was advocated by elements within the PT).
He also refused to cosponsor a national plebiscite in September of 2000 on the
question of whether Brazil should opt out of the Free Trade Area of the
Americas. The media attacked the plebiscite but, out of 10.1 million voters that
turned out to vote, more than 98% stated that Brazil should not sign the FTAA
agreement.
Lula
favored two initiatives at the time of his election. One initiative is labeled
“participatory management of the state” under which non-governmental
organizations and representatives of “civil society” and business would
establish local and regional councils that would work directly with government
ministries to solve problems in agriculture, transportation, education, and
sanitation. The other initiative is “strategic management of the state”
under which the government would try to address social and economic priorities
through planning(e.g., stipends for families to keep kids in school, programs
for eliminating illiteracy among some 25 million adults).
Lula
also supports democratization of the IMF, United Nations, the World Bank, and
the World Trade Organization. He thinks Brazil ought to have a seat in the UN
Security Council. Lula supports Brazil becoming an alternative pole for other
“third world” countries struggling to break the stranglehold of
neoliberalism. At the November 2003 meeting of the Free Trade Area of the
Americas in Miami, Brazil played an important role in placing brakes on the FTAA
until the more advanced economies agree to stop subsidies for their industries
which then go and compete, unfairly, with countries like Brazil.
Brazil’s
key problem is poverty and the social problems that flow from that poverty. Some
53 million Brazilians live below the government’s poverty line and a
significant number of mbmers of the middle class have fallen into poverty. Under
Lula, the currency has strengthened while inflation and interest rates have
fallen. The economy shrank during the first 6 months of 2003 but it is predicted
that growth will be 3% in 2004.
Lula
has gained popularity through tax reform and pension reform initiatives. Until
now, government employees could retire at 48 with pensions exceeding $3,000 per
month. Working class Brazilians could retire at 65 with monthly pensions of $125
(the minimum wage is $80/month). In 2002, the government spent 5% of Gross
Domestic Product on public pensions. A new bill supported by Lula caps pensions
and imposes taxes on them. Moreover, the bill would grant future civil servants
no more than $845/month in pensions. The legislation passed in August of 2003
with some pensioners who supported the PT feeling betrayed by Lula.
The
PT’s program combines economic growth with income redistribution, a deepening
of political democracy, and protecting Brazil’s sovereignty. Lula is adopting
fiscal discipline, high short-term interest rates, aggressive exports policies,
and social reform. He is part of a broader coalition of state governors,
parliamentary reformers, unions, and business. The exchange rate has stabilized
and inflation has dropped below 9%. The debt burden has been reduced and the
trade balance was at a $20 billion surplus for the first 6 months of 2003.
Lula’s program includes Hunger Zero and First Job Programs. He supports small
farmers, educational reform to increase access to schooling for the poor, and
programs to improve health and housing. He views the enlargement of Brazil’s
internal market—especially the market for mass consumer goods—as essential
to attract capital (both foreign and domestic). For Lula, agrarian reform is
essential in order to “make the country fully democratic.”
Lula
believes that the promises of globalization have failed to materialize and that
they have led to the loss of industry in countries like Brazil. He views the
rich countries as hypocritical for supporting free trade while they protect
their economies with subsidies to farmers and to industry. Lula opposes
“international financial anarchy” by which he means portfolio capital that
moves in and out of countries “at the drop of a hat” leaving behind
devastation and ruin. He favors multilateralism (not just links to the U.S.),
favors regional economic blocs like Mercosur, a common currency for Latin
America and a common Latin American foreign policy. As does his party the PT,
Lula favors participatory budgets that allow citizens to have some oversight
over public policies.
Among the nagging problems that confront Latin America’s largest country are:
The problem of landlessness- Twenty percent of
Brazil’s population owns 90 percent of the land while the bottom 40% owns only
one percent of the land. Under the neoliberal policies in place since the
military era, 900,000 families lost their lands and there were 2 million
agricultural jobs that were lost. A single highway construction company in
Brazil owns 4 million hectares of land ( a hectare is 2.2 acres). Sixty percent
of Brazilians make their own jobs in the “informal sector.”
Brazil’s
constitution allows landowners the right to bear arms to protect their property.
Also, persons can squat on land that is not used and after a period of time the
government will recognize such settlements and grant title to the squatters.
This has led landowners to finance private armies in order to remove squatters.
Thousands of these squatters have been killed while few person have ever been
tried and found guilty for these murders. On November 22, 2003, Lula reassured
the landless by pledging that he “would die defending land reform” and he
promised to settle 400,000 poor families during his first term. This would
constitute the largest land reform in the history of Brazil.
Crime and violence- Brazil’s murder rate is four times that of Costa Rica.
But Brazil has greater inequality than Costa Rica since 1% of Brazilians own
more than the entire bottom half of the population. The homicide rate in Brazil
rivals tht of Colombia in many of Brazil’s slums. One problem is murders
committed by police officers. In 1992, cops in Sao Paulo killed 1,470 civilians.
This was a greater number of killings than during the military period. Killings
in that city are now on the rise again after a period of lull. Brazil has one
million private security agents (rent a cops) as private security has become a
4.5 billion dollar industry. Private security guards commit two-thirds of the
killings in Sao Paulo. One third of the state of Sao Paulo’s 35 million
residents pay guards to watch over their homes. With so many armed private
groups, the government’s monopoly over armed social control has been eroded.
Brazils’ Media- Giant media conglomerates (such as the O Globo
conglomerate) control Brazil’s print and television media. They can make and
unmake candidates. The wealthy media elite mostly advances the interest of the
conservative national and local elites that have run Brazil. There is a campaign
for Media Democratization going on in Brazil alongside of the literacy campaign
that the government launched in September 2003. Under the literacy campaign
non-governmental organizations, universities, and private enterprise will be
involved in a campaign to teach Brazil’s 25 million illiterates to read. The
estimated cost of the campaign will be a rather modest 92.6 million dollars.
Lula
won the elections of October 2002 at a time when the social movements of the
Left were in decline. The Left won the elections but this does not mean that
they have changed the balance of power or the balance of forces in Brazilian
society. There are three options open to Brazil:
1. Continue the neoliberal policies of the past two decades and don’t stand up to the IMF, the World Bank or the U.S. These policies have brought no benefits to most Brazilians.
2. Support “recycled neoliberalism” or “FTAA-Lite”- This means don’t confront the U.S. head-on but somehow maneuver around the U.S. to try to blunt its force.
3. Rebuild the democratic project- This means stressing improving the lives of the poor majority, reorganizing the economy more on the basis of an internal market versus the neoliberal approach of serving the international market, agrarian reform, economic reconstruction through improving infrastructure (roads, bridges, public facilities, hospitals).
Within Lula’s party, the PT, there all three of these tendencies exist and none is dominant. Thus, Lula heads a fragile coalition that might break at the seams. For example, the MST movement of the landless supports a whole new model of agricultural development that goes beyond land reform to address worker education, housing, and grass-roots community governance that might be too radical for many PT members. Yet, as the largest social movement in Brazil, it is very important to keep the MST working with the PT. How can this be achieved? In Brazil, as in many other countries, the Left is in ideological crisis and is unsure of an exit out of the economic and social crisis that is the product of neoliberal globalization. In Lula, there is the hope of peaceful and democratic change that goes beyond the mere winning of elections that don’t change dismal social and economic realities. But hope might not be enough to contest the power of the forces of the status quo in Brazil and elsewhere.