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May 2003

Tough Lula To Oust Rebels

While the rest of us think President Luiz In¶cio Lula da Silva has
been behaving responsibly, his own party's extreme left-wingers
think he has betrayed their cause. They want the government
to tax and spend. They want higher taxes on industry
and commerce and high-income individuals.

John Fitzpatrick

President Luiz In¶cio Lula da Silva has shown that he wants to get his reform program on the road shortly. April 30, he went to Congress personally, along with 27 state governors, and handed over his government's proposals to reform the pension and tax systems. On Thursday, May Day, he took part in a traditional Workers Mass in his old trade union stronghold at S¤o Bernardo do Campo, outside S¤o Paulo, and again reforms were the highlight of his speech.

At a rally later that day, Lula was hailed by Jo¤o Antonio Felicio, the leader of CUT (Central  nica dos Trabalhadores)Brazil's second-largest trade union federation and a traditional ally of Lula's party, the PTas having achieved more in four months than his predecessor, Fernando Henrique Cardoso, had done in eight years. The leader of the larger ForÍa Sindical union federation, Paulo Pereira da Silvaa candidate for vice-president last year on the slate led by Ciro Gomeswas more critical but, at the same time, said he supported the reforms. Two days later, Lula claimed that more than 90 percent of the people, workers and employers alike, supported him in "doing what needs to be done" in Brazil.

The week also saw the government leader in the Lower House, Congressman Aldo Rebelo, outline an ambitious agenda which aims to have the first round of voting on pension and tax reform ready by July 23. The government is betting it can bring this about because of the combination of Lula's phenomenal popular support, and the broad coalition supporting his administration. Should this happen, it would be a fantastic victory for Lula, who until only a few months ago was spooking the markets, pushing down Brazil's currency and way up its country risk rating.

Flies in the Ointment

However, there are some flies in the ointment, and they have the PT logo stamped on their wings. And these wings will now be picked. The irony is that while Lula can rely on allies as disparate as the mainly evangelical PL partyof his Vice-President JosÙ Alencarand the Communist Party of Rebelo, he cannot depend on the support of the radical wing of the PT, a party he himself created just over 20 years ago. It is beginning to look as though he has lost his patience with the so-called "radicals", and is about to kick them out of the party.

The radicals have been claiming, correctly in fact, that Lula's policies are basically a continuation of what was in place during the previous administration, under President Fernando Henrique Cardoso. While the rest of us think the government has been behaving responsibly, and have been surprised at Lula's zeal and courage to take on pension reform, the PT's extreme left-wingers think he has betrayed their cause. They have no time for fiscal restraint, the IMF or market-friendly policies.

Instead, they want the government to tax and spend. They want higher taxes on industry and commerce and high-income individuals. They are against moves to give the Central Bank greater autonomy or independence. They are also against almost anything the United States is for, and can usually be relied on to blame Washington for most of Brazil's and the world's ills. They seem incapable of understanding that Lula won a massive victory because he persuaded the people there would be no radical change. "Peace and Love" was Lula's somewhat tongue-in-cheek slogan, not "The People United Will Never be Defeated".

Senator HelenaBrazil's Joan of Arc

The government has made it plain that it will no longer tolerate public dissent from the PT rebels. Lula's right-hand man, Chief of Staff JosÙ Dirceu, has been particularly scathing about the dissenters, especially Senator Helo"sa Helena from Alagoas state in the Northeast.

She has been playing the self-imposed role of a Brazilian Joan of Arc for the last few months, and embarrassing the administration. She has the earnest look of the "lesbo-fem-Trot" kind of female lefty frequently found in Europe, but rare in Brazil: little granny glasses, hair scraped back in a bun, well meaning earnestness oozing from every pore. One can imagine her pushing a pram in an anti-war march, or chaining herself to the fence of an American airbase.

Along with two CongressmenJo¤o Batista de Ara¿jo (another wearer of granny glasses) from the northern state of Par¶, and Luciana Genro from Rio Grande do Sulshe appears to be on the way out. According to Brazilian media reports, the decision to expel them has already been made, and just needs to be rubber stamped by the PT's national executive committee. Some voices against the expulsion have been raised, including that of S¤o Paulo Senator Eduardo Suplicy, but it seems that only a public act of contrition and pledge to back the government can save them.

Quo Vadis? Brizola, here we comež

If as expected they are expelled, the radicals may move towards the PDT party, of the veteran populist Leonel Brizola. He was a constant critic of Cardoso, and although he supported Lula in the election, he has now turned on him as well. Some news reports say that the last straw for the government was a recent meeting between the PT "radicals" and Brizola, at which they decided to join forces to oppose pension reform.

It will be interesting to see how much real supportvotes, that isthe leftists have within Congress and their own party, and also whether they will be joined by other PT defectors if they are pushed out. Before the election, it was generally felt that the radicals wing of the PT accounted for about 25 percent of its membership, but this figure is considered to be much lower now. Lula has managed to impose himself so strongly on the country, that one cannot imagine Helena and her comrades taking a quarter of the party with them.

The PT is the largest party in the Lower House, but does not have a majority, and there is no way Dirceu would be planning to move against the radicals had he felt their expulsion would weaken support there. There is also likely to be little popular resistance since, despite their claims to represent the people, none of the radicals has mass appeal. As for the media, it is totally hostile to them, so Lula will get an easy ride there.

By acting so toughly, the government is showing that it is in charge and running the show. Let us hope this firmness remains. Cardoso may have slain the dragon of inflation, but he never came near tackling the problems caused by Brazil's unfair, costly and inefficient pension or tax systems. And even with the government and a popular president behind them, the reforms will require extensive negotiations behind closed doors if the July 23 deadline for a first vote is to be met.

John Fitzpatrick is a Scottish journalist who first visited Brazil in 1987 and has lived in S¤o Paulo since 1995. He writes on politics and finance and runs his own company, Celtic Comunica͚es  www.celt.com.br, which specializes in editorial and translation services for Brazilian and foreign clients. You can reach him at jf@celt.com.br  

© John Fitzpatrick 2003

This article appeared originally in Infobrazil, at www.infobrazil.com  



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