November 1, 2002

Southern Shift – Brazil’s Lula More Nationalist Than Leftist

By Francisco Jose Moreno and
Alejandro Eggers Moreno
PACIFIC NEWS SERVICE

Headlines across the world shout about Brazil’s new “leftist” president. But Luis Inacio Lula da Silva won a landslide victory in Latin America’s largest economy by blurring traditional ideological boundaries and forming a broad-based, nationalist coalition of Brazilians ready to take on U.S. economic priorities and global financial institutions.

Lula’s success is a clear demonstration of the changing face of Latin American politics. The traditional struggle between conservatives, backed almost unanimously by business and financial leaders, against socialists or populists supported by the working class is giving way to a new conflict. This conflict is between those committed to preserving national interests and those willing to accede to the demands of international financial institutions.

During the course of the campaign, Lula softened his staunch left-wing views and moved toward a more moderate, business-friendly position. He chose Jose Alencar, a millionaire textile magnate, as his running mate. He promised to uphold Brazil’s international commitments and rejected a moratorium on foreign debt. He sought and won the support of numerous business and financial leaders, and proposed the formation of a Council of Economic and Social Development with representatives from business, trade unions and other sectors of society to negotiate a new social contract.

At the same time, Lula did not deny his dislike for the finance-oriented market policies driven by the International Monetary Fund (IMF) and other global institutions. He repeatedly denounced the current economic system and insisted he would under no circumstances support the U.S.-backed Free Trade Agreement of the Americas, claiming the proposed hemispheric free-trade zone would essentially signify the American annexation of Brazil’s economy. Global free trade models, he said, would only become viable when all countries have equal opportunities and conditions to become competitive.

This is how did Lula managed to reconcile his seemingly leftist economic views with his newfound friendliness toward business leaders:

The demands of the international financial community over the past decade, specifically the strong emphasis on finance over production, has put Brazil in the position where the interests of most local businessmen, many local investors and middle class professionals are beginning to coincide with those of the workers. The IMF-backed policies of recent years have been designed to pour money into the country, regardless of how it is used or distributed. As a result, most of the money has turned to profits for foreign corporations or gone to the richest Brazilians, and much has been taken out of the country for investment elsewhere. Little attention has been paid to actually strengthening the ability and capacity of the Brazilian economy itself, leaving in the lurch all but the largest businesses, all of the workers and most of the professionals who serve them.

So when Lula talks about how Brazil’s problems go beyond its debt and that the country needs to focus more on boosting imports, creating jobs, and stimulating local business, he speaks for a wide range of Brazilians, employers and employees alike.

He reframed the election from a contest between the left and the right to a struggle over who gets to determine Brazil’s future — the U.S.-led global financial community, or Brazil.

It is not difficult to explain how Lula was able to secure such a large percentage of the vote. Unlike other recently elected leftist leaders in the region — Hugo Chavez in Venezuela, for example — Lula’s popularity does not stem from a personality cult or an overwhelmingly destitute population desperate for any kind of change. He has been very clear that he has no interest in a Chavez-style popular revolution, and there is no indication that Brazilians would have any interest in such.

Lula has managed to gain the support of his old enemies because he is no longer seen as protecting the poor against the abuses of businesses, but as protecting Brazil against the abuses of the United States and the financial policies it sponsors. Yet Lula’s blurring of traditional liberal-conservative ideological distinctions in favor of a common nationalistic outlook is not limited to Brazil. In Argentina, for example, the financial crisis has polarized the country into pro- and anti-IMF camps, the latter including workers and business owners.

As Latin America continues to reject the economic model that has been foisted upon it during the past decade, politics will increasingly take this form in the rest of the region.

The authors are president and vice president, respectively, of Strategic Assessments, a consulting firm in Tiburon, Calif., and Washington, D.C. Francisco Jose Moreno taught political science at New York University and was vice president for Latin America for Philip Morris International for 13 years.

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