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Lula’s second-term victory

Lula easily won the second round of Brazil’s presidential elections. Yet that did not represent widespread positive support. Indeed, anger and opposition is mounting at the neo-liberal policies adopted by the government, led by Lula’s Workers’ Party. ANDRÉ FERRARI, of Socialismo Revolucionário (CWI Brazil), reports from Sao Paulo.

THE SITTING PRESIDENT and candidate for re-election of the Partido dos Trabalhadores (PT – Workers’ Party), Luis Ignácio Lula da Silva, won the second round of the Brazilian presidential elections on 29 October with 60.83% of the valid votes (disregarding blanks and no votes). Lula defeated Geraldo Alckmin, the candidate of the Partido do Social Democracia Brasileira (PSDB – the party of the ex-president Fernando Cardoso) and ex-governor of São Paulo state. About 6% of the votes were blank or no votes and, of the total of voters registered, 19% did not vote, even though voting is obligatory in Brazil.

Lula did not win in the first round – as the opinion polls were indicating – due to the impact of the imprisonment of PT members caught trying to buy a file containing material compromising the PSDB from notorious, corrupt businessmen. This scandal led to the fall of the PT president, Ricardo Berzoini, the second party president forced out due to corruption during Lula’s government.

During the second round campaign Lula was forced to adopt, although very carefully and moderately, rhetoric aimed at winning those who voted for Heloísa Helena, the candidate for the Partido Socialismo e Liberdade (PSOL) in the first round. Against the background where 70% of Brazilians are against any new privatisation of state companies, Lula accused Alckmin of planning to privatise Petrobrás (oil and gas) and Banco do Brasil. The threat of the return of the PSDB to government was used as a huge scarecrow that made many workers vote for Lula as the lesser evil.

If it is true that the PT has lost its left character during the last four years, it is still true that there is a deep rejection of what the ‘Cardoso era’ represented, with eight years of PSDB government attacks on workers. The weakness of the right-wing opposition to Lula was even more evident with the fact that Alckmin got fewer votes in the second round than in the first, a unique accomplishment since the introduction of two-round elections.

This campaign was the most depoliticised in Brazil’s recent history. The conversion of the PT to a party of the elite, of the administration of capitalism, meant there were no profound programmatic differences between the candidates. Lula’s past as a left figure was used in the campaign, but this past will not return. As a Brazilian journalist put it, "Lula was elected to change the country, but only changed himself".

The PT way

IF THE PSDB privatised state companies while in the federal government and still does on a state level, Lula’s government implemented the system of ‘public-private partnerships’, known as ‘the PT way of privatising’. It privatised banks, like those in Maranhão and Ceará states, and implemented a so-called ‘university reform’ which has handed over public money to private universities. More importantly, Lula implemented the pensions ‘reform’ that the Cardoso government failed to do (mainly because of the opposition of the PT at the time), which attacks workers’ rights and promotes a private pension system.

The financial policies of the government have been mainly aimed at ensuring the income of big financial capital. The total annual cost of the ‘family allowance’ programme, which benefits the poorest families, is only the equivalent of what the government pays to bankers and speculators every two weeks in interest rates on the public debt.

At the same time, the Brazilian economy is growing much slower than other Latin American countries or emerging economies. The average GDP growth during Lula’s government is practically the same as Cardoso’s period. This leads to permanent mass unemployment, poverty and social chaos that is reflected, for instance, in high levels of urban violence.

The lack of profound differences in the financial policies of Lula and Alckmin is evident in the comments of the second biggest Brazilian banker, Olavo Setúbal, to Folha de São Paulo (13 August): "There was a big doubt if the PT was a left party, and Lula’s government turned out to be an extremely conservative government... The perspective was that Lula would lead the country in a socialist direction. There were tensions in the financial system, but as he [Lula] became a conservative, he’s now about to win the next election and the market is calm... There is no difference from a financial point of view. I think that either choice is the same... Both are conservatives".

In this situation, a section of the ruling class still thinks that only Lula is capable of acting as a brake on the mass movements and through this can implement the neo-liberal reforms that still have not been concretised, such as attacks on labour rights and further ‘reform’ of the pensions system.

During Lula’s government, in contrast to Cardoso’s, there has not been any major international financial crisis and there has been a very favourable environment for Brazilian exports. This helped avoid an acute economic crisis, and gave space for a sense of stability and gradual recuperation. But the scenario during Lula’s second mandate will be more complicated.

The corruption theme that characterised the whole period of Lula’s government was not seen by the majority of the population as something exclusive to the PT and therefore was not a reason to reject Lula and opt for Alckmin. Corruption is seen as a cancer that is generalised in Brazilian political institutions. Many of the corrupt practises of Lula’s government, such as the buying the support of MPs in the scheme called ‘the big monthly allowance’, began in the previous government and were also used in many states and councils. During the climax of ‘the big monthly allowance’ crisis, the PSDB limited its investigation and toned down its accusations against the government, afraid that its own MPs would be exposed. The national chairman of the PSDB, senator Azeredo, was suspended because of his involvement in this scandal.

Alliances with right-wingers

THE ELECTIONS AT state level were characterised by victories for many candidates who were supported by Lula, even if the majority were right-wing. The victory of the PT’s candidate in Bahia state, Jacques Wagner, defeating a group from the local oligarchy, made a big impact. But, in most states, Lula made dozens of agreements with traditional right-wing elite politicians.

An extreme example of this is that former president, Fernando Collor de Melor, elected senator for Alagoas state, is now one of the MPs and senators supporting Lula’s government! Collor defeated Lula in 1989 in the first direct presidential elections after military rule but ended up being impeached in 1992 after a mass movement that demanded the fall of his government. The fact that Collor is now back in Brasília as an ally of Lula is a signal of the PT’s complete degeneration.

But Collor is just one example. Another was Pará state, where Lula and the victorious candidate for governor, Ana Julia Carepa, allied themselves with a traditional right-wing politician in the state, Jader Barbalho of the Partido do Movimento Democrático Brasileiro (PMDB). Carepa is a member of the Democracia Socialista tendency, the section of the United Secretariat of the Fourth International (USFI) that remains in the PT (although another section is now in PSOL). In Maranhão state, Lula supported the re-election campaign of the governor, Roseana Sarney, of the right-wing Partido da Frente Liberal and daughter of the ex-president José Sarney, who also supported Lula. In Santa Catarina state, Lula supported Espiridião Amin, the candidate of the right-wing Partido Progressista, the heir of the party that was the support base of the military dictatorship. (In the event, however, both Roseana and Amin were defeated.)

Of 27 Brazilian states, the PT increased from three to five governors, in Pará, Bahia, Sergipe, Piauí and Acre. It lost again the elections in Rio Grande do Sul, where the capital, Porto Alegre, used to be the symbol of the ‘PT way of governing’, this time to a candidate from PSDB, Yeda Crusius. The PSDB won six governors, three of them in some of the most important states in the country – São Paulo, Minas Gerais and Rio Grande do Sul.

A second round of attacks

THE NEO-LIBERAL LOGIC prevailed during Lula’s entire first mandate, but a layer of workers still cling on to the hope that the second term will be different. However, there is not any real reason to imagine that this will be so. ‘Don’t swap the certain for the doubtful’, was a slogan in Lula’s campaign. But if there is one thing that is certain about Lula’s second term it is that support for him will continue to come from conservative parties and that the logic of the financial policies will be maintained.

Soon after Lula’s victory, minister Tarso Genro and some PT leaders announced an end to the so-called ‘Palocci era’, a period when the ex-finance minister Antonio Palocci promoted high interest rates, low growth and big cuts in the budget to guarantee the servicing of the debt. Palocci was eventually brought down by corruption scandals, although he has now been elected as an MP after he spent millions on his campaign.

Immediately, Lula and other ministers publicly denied any change in economic policy, defending the financial measures that have been implemented, insisting that there will be further cuts, and that the budget surpluses of the first term will be maintained. Lula’s ministers have already stated the necessity of renewing the DRU, the legal mechanism that allows the government to cut 20% from the education and health budgets, which are supposed to be guaranteed by the constitution.

As part of its policy of budget cuts, the government is preparing a new phase of pension ‘reform’. This time it plans to raise the minimum age for retirement to 65 years and break the link between the minimum wage and pensions. One of the main aims of the government is to attack workers’ rights as soon as possible, in the name of ‘job creation’ and ‘development’.

During Lula’s government, the jobs created have had a precarious character, with 64% of them in the last two years paying only up to the minimum wage (about $160 a month). The government had already sent a proposal to Congress that allows small firms not to give basic labour rights to their employees. This is just an indication of what is to come.

To sustain his second term administration, Lula is trying to build a support base among the right-wing conservative parties. The PT-led government relies on small parties that maintain their position by trading support for positions in government and demanding bribes such as ‘the big monthly allowance’. The PMDB is split between those in favour and those against the government. In the last analysis, however, the PMDB provides important backing to it. Moreover, Lula announced publicly the necessity for a national agreement on economic development. By this, Lula means to involve even the most conservative opposition in implementing neo-liberal attacks.

Lula is also working to come to agreements with the PSDB, especially the re-elected governor in Minas Gerais, Aécio Neves. Part of this discussion includes the 2010 elections and the question of who will be the successor after Lula. As Lula cannot stand in 2010, he is working to build an alternative that involves sections of the PSDB. In the PSDB, Neves is competing against José Serra, newly elected governor of São Paulo, over who will be the party’s candidate for president. Facing the possibility of being defeated in his own party, Aécio is leaving the door open for a future closer relation with Lula and the PT.

All this points to a broad and complex process of political reorganisation within the ruling class in Brazil. The crisis of political representation for the ruling class, the fragility of the regime’s institutions, and the conversion of the PT to a party of the established order, are the central factors pushing this process forward.

Mass resistance

AS IN 2003, when he implemented his first pension ‘reform’, Lula will try and use the ‘honeymoon period’ to implement new attacks. But this time the government will be weaker and broad layers now have more concrete experience of the PT. This means that the chances for victorious struggles against the government are greater.

One example of this potential is the fact that the Movimento dos Trabalhadores Rurais Sem Terra (MST – landless workers’ movement), whose main leaders give critical support to Lula, has already announced a plan for action and land occupations for April 2007 in what is likely to be an extended version of the ‘Red April’ of 2004, when more than 100 occupations took place at the same time around the country. Leaders of the MST have even stated their support for the idea of organising a general strike with sections of the most combative trade unions, against the attacks on workers’ rights and pensions.

The CUT trade union federation, first set up in 1983, initially united the most combative and left-wing sections of the trade union movement in Brazil, but is today nothing more than a transmission belt for the interests of the government. In the middle of the crisis around ‘the big monthly allowance’, for example, the chairman of the CUT was taken into Lula’s government as labour minister.

There are however at least two trade union initiatives beginning to organise as an alternative to CUT, Conlutas (National Coordination of Struggles), headed by trade unionists from the Partido Socialista dos Trabalhadores Unificado (PSTU – the biggest group from the Morenoite tradition in Latin America), but also involving PSOL members; and the Intersindical, an initiative developed by PSOL trade unionists and independent union activists, a majority of whom have already left the CUT, but also some who are still in the federation.

A unified conference between those two initiatives will probably take place at the beginning of 2007 to draw up a common plan of action against the government’s reforms and financial policies. Even if a general strike is unlikely in the short term, an intense process of struggle can take place which will have a major impact on the destiny of the government and the working class.

PSOL’s position

PSOL, TOGETHER WITH the PSTU and the Partido Comunista do Brasil (PCdoB), formed a left front that contested the first round of the presidential election, with Heloísa Helena, a PSOL senator, as the candidate. Heloísa Helena got almost 7% of the votes, coming third. These votes were what Lula needed to win in the first round and were also vital for him in the second. To win these votes, Lula began denouncing Alckmin’s policies of privatisation, and spoke of Latin American integration and other important issues for left voters.

The day after the announcement of the first-round results, PSOL’s national executive declared that its position on the second round was of no support to either Lula or Alckmin. The executive did not give any direction to PSOL supporters as to which way they should vote while forbidding any public support from party members for either candidate.

The two biggest currents within PSOL that were not initially part of the party and who joined in 2005, the Socialist Popular Action (APS) and Enlace (‘Links’, which includes former members of the USFI) had a different position. Most USFI members opted for a critical vote for Lula. In some states, such as Pará, its members, including a state MP, even appeared on TV supporting PT candidates.

A section of PSOL defended the idea that demands should be made on Lula by the left, with the expectation that he would reject them. On this basis, they argued, it would be easier to justify why not to support his candidature in the second round. The problem with this position is that it would lead to illusions being sown in the possibility of winning Lula over to a more left-wing position.

The position of members of Socialismo Revolucionário (SR, a tendency in PSOL), was for a no-vote on the second round, and that the priority should be the preparation for the ‘third round of struggle against the government’. We explained that a vote for Lula, on the basis that this would be the ‘lesser evil’, would only serve to help the government regain a false left profile which it would use to confuse the working class during the next governmental term.

At the same time, we took a very critical stand towards the posture of the PSOL national executive regarding internal democracy. The decision of the executive was made without all its members being consulted and without even the minimum of debate within the party. During the whole campaign, the base of the party was ignored and the party’s structures were dissolved. SR members called for the need to rebuild the party politically and organisationally, from the base upwards.

Where we could, we attempted to encourage internal debates about the election campaign and the tasks for the next period. In São Paulo, a PSOL membership aggregate meeting had 150 in attendance and 80% of those present voted for a no-vote in the second round.

In the debate, we questioned the simplistic analysis that the elections meant a turn to the right in society. This argument was used to moderate PSOL’s political positions in the election campaign. We explained that the election marked an important step in the process of the recomposition of the left through PSOL’s and the left front’s candidature. However, there was a turn to the right within PSOL which led to a watering down of its programme and a weakening of its structures. This process was undertaken by more reformist tendencies within PSOL and does not reflect a weakening of the support for socialist and revolutionary ideas among rank-and-file party members and sympathisers.

The future of PSOL is now linked with its capacity to be an active and leading part of the struggles and resistance against attacks from Lula’s new government. This will only be possible if it is based on a socialist programme with a democratic internal structure.


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