What elected Lula was the rejection of neoliberalism, but the PT (Workers Party) will not be able to meet the expectations of the masses unless there is a real break with the policies of Cardoso and the IMF.
Brazil under President Lula
Lula got the largest vote in the history of Brazil and the second ever worldwide. The Workers Party leader and former metalworker won the second round on October 27 with 52.7 million votes (61.7%) against 33.3 million for Serra (38.7%), the candidate of the Cardoso government and preferred by big business, bankers and the IMF.
The first round of the elections on October 6 saw the PT winning more seats in congress (from 59 to 91) and in state legislative assemblies. In the senate too, the PT doubled from 7 to 14 senators to become the third force.
In some states the PT now has the largest parliamentary group e.g. São Paulo, where it has 20 state deputies.
The PT made the second round for governor in 8 states after taking two governors (Acre and Piauí) in the first round- but only won in one (Mato Grosso do Sul). The final result was below expected but overall there was major growth.
For the first time, the PT made the second round for governor of the state of São Paulo (Genoíno got 41% against 58% for 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 element Roriz (PMDB). In both cases the PT is due to take legal action.
The most significant defeats for the PT were in Rio Grande do Sul, where it had the sitting governor, and the state of Rio de Janeiro where the PT candidate for governor (Benedita da Silva) was defeated in the first round although Lula got an incredibly high vote.
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 conservative forces. The defeat reflects a certain decline in support for the PT state government headed by Dutra, who had created expectations of major changes but was unable to deliver. Dutra lost the internal primary and was not even a candidate.
In many cities run by PT mayors, Lula’s vote was below the national average. This reflects frustrated expectations when these mayors govern within the narrow limits imposed by the economical crisis.
The defeat of the PT in the Rio de Janeiro gubernatorial race reflects the whole policy of the PT national leadership, which forced the local PT to support the previous state government (Garotinho, PSB), totally losing its identity. The PT was later forced to break with him but it did not do so totally and 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 and his wife was elected governor to succeed him.
The PT national president José Dirceu says that Lula must look for support from 14 state governors: the three PT ones (the small states of Acre, Piauí and Mato Grosso do Sul), four PSB (Rio de Janeiro, Alagoas, Rio Grande do Norte and Espírito Santo), two of the five governed by PMDB (Paraná and Santa Catarina, who supported Lula against the official PMDB position), two of the PPS led by Ciro Gomes (Amazon and Mato Grosso), and Roraima (PSL), Maranhão (PFL, but linked to former-president Sarney’s family who supported Lula) and Amapá (PDT).
In congress, the PT block and its allies do not have a majority and they are looking to broader alliances with sections of the PMDB and maybe even some in the PSDB or PFL.
Serra and Cardoso’s PSDB won seven state governors, held São Paulo and gained Minas Gerais, which are both major states. But the PSDB has many internal divisions and many groups were not really active in Serra’s campaign, e.g. Jereissati, governor of Ceará, and there is a conflict between the São Paulo and Northeastern factions of the PSDB.
The PSDB is set to lead the opposition to Lula, thus frustrating hopes of a government of national unity.
The significance of Lula’s victory
Despite the profound changes in the PT in recent years, moderate positions and alliances with sections of big business, Lula’s victory reflects a powerful desire for change on the part of the great majority of the Brazilian people.
It was a vote against the results of eight years of neoliberal policy under Cardoso, against unemployment, falling real wages, degraded public services, the consequences of privatizations, 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 etc.
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 90s.
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 or resistance. This image of opposition to the system was consolidated as the channel of 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 nor a single gesture during the electoral campaign took place without previously weighing up the likely impact on the mood of the investors. Lula committed to the agreement signed by Cardoso with the IMF, and reiterated to the point of exhaustion that all existing contracts will be honored and no unilateral steps taken.
Politically, the PT leadership managed to make alliances with the traditional parties and regional bosses of the Brazilian bourgeoisie. Lula’s vice-president was Alencar, Liberal Party a senator who is one of Brazil’s biggest bosses and he was supported by two former-presidents – Sarney and Franco.
In the second round he got even more bizarre support, such as the old Northeastern oligarch ACM Magalhães (PFL); or the ex-minister of the military regime Delfim Netto whose measures against workers’ interests caused the first metalworkers strikes led by Lula in 1978.
Lula’s program for government is based on economic growth and a social pact of workers, bosses and government. The Social Pact became the great magic wand to overcome basic contradictions between the intentions of solving the enormous social problems and at the same time meeting the demands of the financiers and IMF.
Lula’s "Peace and Love" policy curbed the energies of PT members who lacked the enthusiasm of previous campaigns, such as 1989, and particularly among sections of the youth.
Nevertheless, Lula did have the support of the main workers’ and youth mass organizations. CUT, MST and the national student organizations (UNE and UBES). In the last phase of the campaign particularly, there was more involvement and mood among activists in relation to Lula.
The victory of Lula and the PT was in the context of the Cardoso government’s crisis and its neoliberal policies. Serra and the PSDB oscillated in the electoral campaign between identifying with the Cardoso government and distancing themselves from it. They tried to do both by beginning with "Continuity without Continuism" then switched to emphasize the idea of change "Change yes, but with safety."
They attempted to sow panic around the ’Argentinisation’ of Brazil under Lula. Top artists declared on TV "I am afraid of a Lula government" but this backfired and 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.
Did Lula’s moderate policies win the victory?
The PT’s turn to the right, the leadership’s dropping of the socialist perspective and class independence has been posed as the main reason for Lula’s victory in his fourth presidential race.
The truth is that the PT victory reflected the crisis of neoliberal policies, the undermining of Cardoso’s support and the absence of clear alternatives for the bourgeoisie. The big differential of PT in this context was not its moderation but its past of struggle and consistent opposition to the previous governments.
Indeed, at many points during the campaign, the PT’s policy of avoiding any kind whatsoever of conflicts, controversies or clashes threatened to damage the image of consistency built during more than 20 years of the PT.
Lula could have won in the first round, but this did not happen largely due to a certain demobilization of PT members in the final part of the campaign and the negative impact of Lula’s tactic of adopting an extremely vague and generic approach. This was exploited by all his opponents, including those who describe themselves as opposition to Cardoso and Serra, such as the populist Garotinho of the PSB.
The mass of the people identify 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.
Then there was the PT’s past record, the party of the common people, the only one not corrupt, the only one with clean hands and not blamed for the current state of things, which led to the expectation of profound changes. All this despite the rightward turn of the party in recent years. Lula’s election victory was much more due to the combative past of the PT than its current moderation.
Many of the PT rank and file, the advanced layers of the working class and the youth, 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 people’s movement.
Lula’s victory and his future government with bourgeoisie 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 reorganization 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 profound transformations. This higher level of class-based and anti-capitalist consciousness could have been translated into organization and struggle.
This would not impede electoral support. In fact, it would create the conditions for a mass struggle, as the necessary condition for real changes.
But, the actual PT policy was not just an electoral tactic. The strategy and program are not socialist but just seek to run capitalism better than the capitalists themselves.
Lula government and crisis
The great contradiction facing Lula and the PT it is the inevitable clash between enormous expectations and the limits imposed by the economic crisis and the moderate program 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 8 years of Cardoso, average GDP growth was 2.3% and unemployment was higher than ever. Average income fell and social inequality was still obscene. Violent crime has reached alarming levels. Public services were wrecked and privatizations 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$ 90 billion coming in from privatizations, Brazil’s public debt jumped from 30% to 60% of GDP during Cardoso’s government, to reach 800 billion by the end of 2002, from about 60 billion in 1994 when Cardoso was first elected.
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 agreement and loan. The problem was just put off but it will return.
As the Financial Times recently emphasized, 80% of the public debt is 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 due to the international economic crisis. This has led 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 (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 with the presidential candidates. Lula committed to the target but is willing to increase it. 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 economic growth through higher exports and gradual increase in income to expand the domestic market.
In fact, Brazil has been obtaining trade surpluses in the last period, but this was 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 perspective of higher exports will meet with serious obstacles.
If the IMF agreement is kept to, not even a limited national-development policy is possible in Brazil.
Burning the candle at both ends
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 is enormous expectation in relation to 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 bosses and bankers in a peaceful way without provoking more turbulence in the economy.
When it becomes clear 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.
One of the first challenges posed for the new government will be the minimum wage, which is now a miserable 200 reais (about US$ 54.00). Even PT parliamentarians are calling for an increase to around US$ 100 on May 1st 2003, which is not the intention of the PT members in the future government.
The perspective 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 "Picketers" movement, but the potential is there. Also the demand for land and 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 the year of 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 PFL and PMDB would try to leverage the crisis and 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 polarization in society may push the government to take unorthodox measures, regardless of his intentions.
Over the last few days, Lula has repeatedly said that he will 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 program 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 electoral process. Although in most cases, its campaigns did not have clear left profiles, almost 30% of the federal deputies, two senators and a reasonable number of state deputies hold positions to the left of the PT majority leadership.
Two candidates on the left of PT, Zé Maria (PSTU) and Rui Pimenta (PCO) got votes well below expected (400,000 (0.4%) and 30,000 (0.05%)). This low vote reflected the strength of Lula despite the PT’s turn to the right.
The left inside and outside the PT is still dispersed with no firm alternative to the majority leadership.
But there are now conditions 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 peace and love" policy was merely temporary electoral tactics will reach the conclusion that this is really the long-term strategy of the party leaders and they will look to an alternative. A process of recomposition and reorganization 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 step. It is necessary now to take 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 bourgeoisie parties or politicians.
The real choice for a workers government will be to stop paying off debt because the country has fallen on its knees or to stop paying off debt to the big capitalists in a sovereign manner, organizing and mobilizing the workers and moving forward with an anti-capitalist program.
A program that poses the nationalization of the banks and financial system under democratic workers’ control, the renationalization of the privatized companies and all those 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 and bourgeois regime. At the same time 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 organizational step of building a clearly socialist political project and seek unity in action in this battle.
Polarization 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 mobilization in Argentina, Uruguay, Paraguay, Peru, Ecuador, Bolivia, etc.
Electorally too, the coca-growers leader Evo Morales was second in the Bolivian elections and ex-captain Lúcio Gutierrez, an active participant in the people’s revolt of January 2000 in Ecuador, is in the second round of the elections.
Latin America is experiencing polarization that is also reflected in the situation of Chavez in Venezuela. The failure of the attempted coup there shows 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 FTAA and neoliberalism throughout the continent. Imperialism would prefer to co-opt Lula instead of clashing with him, but a PT government may lose support by not meeting the expectations of profound change.
The failure of neoliberalism means that in many countries reformist and Populist alternatives have emerged preaching national development on a capitalist basis. These experiences will not be able to overcome capitalist crisis. Only a socialist Latin America can meet the demands of the masses and offer a way out of the crisis.
The origins of Lula and the PT
In May 1978, during the military dictatorship, 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 echoed in the whole of Brazil thus opening a new stage in the Brazilian workers movement.
A new generation of Brazilian workers had emerged in the industrialization of the 60s and 70s. 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 government that followed.
In 1980, two years after the historic mobilization 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 lead by left forces and the opposition slates in the yellow unions) and brought together in one single political movement of the left together with urban movements much influenced by the rank and file of the progressive Catholic Church, the rural workers’ movements, left intellectuals and the remnants of the old left organizations such as splits from the Communist Party and the armed resistance to the dictatorship.
The PT’s first official membership card was that of Mario Pedrosa, a former Trotskyist in the 1930s who took part in the Fourth International founding conference in 1938 and was part of its leadership until splitting with Schachtman and Burnham from the American SWP in 1940.
Unlike the traditional left of Stalinist origin – mainly the PCB (pro-Moscow Communist Party) and PCdoB (pro-Albania/China) – or the center-left intellectuals (like Cardoso, for instance), the early PT posed clear class independence and refused to submit its policy to the bourgeois opponents of the dictatorship such as the MDB (Brazilian Democratic Movement).
The October 1980 founding manifesto declared: "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 Charter of Principles of 1979, 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 bourgeois populist-nationalist legacy of the old Brazilian Labor Party (PTB) of Getúlio Vargas, a kind of Brazilian Perón. The PT declared: "The attempts to revive the old PTB (…) is no more than an attempt to enlist workers for the defense of the interests of sections of the Brazilian bosses (…) We denounced 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’ mobilizations against the Stalinist Jaruselsky regime. The influence of those events led the PT to adopt a profoundly critical attitude to the traditional social democracy and to Stalinist regimes, at the same time as solidarity with revolutionary struggles in Latin America.
The profound working class roots of the PT, its mass basis 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 mobilization throughout Brazil for " Direct Elections Now" in 1984 rejecting the policy of transition "at the top" from military regime to civilian government, the PT refused to attend the Electoral College that elected Tancredo Neves and José Sarney indirectly for the presidency and vice-presidency. In fact the PT expelled three federal deputies who did not follow its line and voted for these candidates of the bourgeois opposition to the military regime.
As the party of consistent opposition to the Sarney government, 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.
At that time, the electoral defeat of Lula together with the impact of the collapse of the Stalinist regimes of USSR and East Europe, the defeat of the Sandinistas in Nicaragua and the major ideological offensive of the bourgeoisie in the 1990s all pushed the PT leaders toward more moderate positions than those of its origin.
The 1st PT Congress in 1991 marked the beginning of a new stage for the party with the majority leadership moving toward the positions of social democracy.
The absence of a clear socialist project and the pressure exerted by the positions the PT had taken within the bourgeois state caused a turn to the right that was a feature of the PT during most of the 90s. There was a brief interval when sections more to the left took a majority of the leadership in 1993 but did not constitute an alternative and this only deepened the turn to right when the leadership returned to the hands of the former leadership.
The PT lost an opportunity to win the presidency in 1992, when a mass movement toppled Collor and leadership supported Itamar Franco, the vice-president, instead of demanding new elections.
During the Franco government the bourgeoisie began to reorganize and launched the Real Plan with Cardoso as candidate for president. Illusions in economic stabilization 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 neoliberal 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 of this crisis that the PT won more 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 organizations of the youth and workers are still PT supporters.
The workers’ experience of a PT government may be a decisive milestone on the road to the construction of a mass left alternative to the program of the party leadership.