Any political forecast is subject to certain conditions, based on available
evidence and obvious future occurrences, often unrelated to politicians' wishful
thinking. Within those general parameters, some broad predictions can be made.
The results of local elections
in 2004 will now be defined by political disputes in each town. However, it
is likely to be strongly influenced by people's perception of Lula's government
and will largely reflect the Federal Government's performance.
The opposite is also truea
negative or a weak PT performance in these elections will signal the breakdown
of an ambitious policy initiated in the 2000 elections, increase the power
of the opposition party and reposition it for the presidential election in
The purpose of this article
is to show a PT electoral victory is possible and Lula and his government's
political decisions can pave the political path to overcome neo-liberalism.
There are three areas
which fall beyond Lula's government, the PT or its supportersthe first
is international political and economic relations, the second is what we could
call the power of the opposition and the third is the politically unforeseeable
Most international economists
agree that during 2004, a financial crisis leading to a dramatic adjustment
in the exchange rate is unlikely to happen in the most-developed developing
countries, particularly Brazil. This country, despite being structurally vulnerable
to such a crisis has marginally improved economic indicesa record trade
surplus in 2003 and higher reserves. In a US election year, the Federal Reserve
is unlikely to raise interest rates far enough to prompt a flight of high
risk capital in Brazil.
In the second place, the
opposition is deeply weakened. PSDB leaders' disunity has crippled its manifesto,
the PFL is divided and opposition parliamentary representatives weak. What
is leftand not to be underestimatedis the active sympathy of the
media, especially the main national newspapers, which despite their differences
have often acted in concert at crucial moments.
Another factor is chance,
the random and unforeseeable. But the corrosive action of these influences
can be counteracted in part, as taught by Machiavelli, by the skill and wisdom
of the political leadership.
If this is true, the 2004
elections could be, fundamentally, a time of creative action for Lula's government,
of initiative and public expansion for the PT and social movements that form
its traditional support. The year 2004 will be what we are able to build,
in particular, our government and public's ability to overcome the legacy
of historic constraints on the PT's transformation project.
The Drama of Hope
This positive broad vision
of political possibilities should be qualified by understanding the present
and real state of relations within Lula's government and with the Brazilian
people. Analyzing national historical trends and converging aspects of three
leading opinion polls, the CNI-Ibope, CHT-Sensus and Datafolha, we can produce
a pretty accurate prediction. These indicate the dramatic development of Brazilian
Despite high marks for
Lula's personal performance as President (65.3 percent by CNT-Sensus, February;
60 percent by Datafolha from March) and reasonable marks for his government
(39.9 percent by CNT- Sensus and 38 percent by Datafolha), these indices have
been in sharp decline since August 2003 due to economic recession and insufficient
changes in the social arena. The government's performance in fighting corruption
was also regarded as poor.
Results of most recent
surveys indicate a huge differential between Lula's performance and his government's25.4
percent according to CNT-Sensus and 22 percent by Datafolha. To a great extent
this difference is explained by Lula's continuous promises to create new jobs,
increase income, carry out agrarian reform and change social policies.
It is reasonable to assume
the persistent gap between promise and reality will result in a gradual merger
of the President's personal approval ratings and public perception of his
government. This tendency was expressed by February CNT-Sensus which showed
a decrease in people's approval of the President's performance, bringing it
much closer to the government's approval index. Of even more concern, are
the indications regarding the President`s credibility48 percent think
promises made during the campaign are being met, whereas 42 percent say they
If this coupled tendencydecreasing
popularity and growing disillusionis not reverted in the next months,
the PT and its supporters will face the next elections in a chronically negative,
discredited and suspicious or even hostile atmosphere. It is not just an election
issue, although this dimension is fundamental.
It is a potential conflict
between the PT and traditional supportersthe workers and underprivileged.
What is more, it is a threat to the PT's political integrity and government
coalition it leads. How to explain the continuation of policies which so deeply
hurt the life style, already so dramatically difficult, of most Brazilian
people while bankers and speculators, who gained so much in recent years,
keep stacking up record profits?
Attribute it to a choice
without options, the product of inherited restraints? But then, the party
which legitimately represents, by conquest and right, the hope of change,
would be confirming that the adventure is over, that fundamental continuity
Toward the Transition
During the last month
of 2003, a series of important decisions showed the Lula government was gaining
strength and conditions emerging for a new standard in relations between economy
and State, preparing the ground for a sustained cycle of economic growth with
increasing distribution of income.
In the power sector, where
the damage caused by privatization and deregulation continues, new regulatory
powers have been approved that permit the ministry of Mines and Energy to
assume key functions. Other regulatory agencies are moving in the same direction,
redefining more responsible positions.
The replacement of the
president of Anatel and president of the National Health Agency were, certainly,
movements in a similar direction. Rumors persist of the replacement of Carlos
Lessa of the BNDES, whose administration operated a strategic turnaround in
the functions of the biggest Brazilian development bank.
On March 2, for example,
new operational policies were announced that favor loans to the public sector.
Strategic financial plans have been defined for financing housing and sanitation
infrastructure, areas practically abandoned by the Fernando Henrique government
and particularly punished during 2003. These moves clearly signal a departure
from the policies of Malan (Minister of Finance in the Fernando Henrique government)
and herald a new industrial policy actively directed at key technology sectors.
Sovereign leadership in
foreign policy was confirmed with the hiring of a Director at the Ministry
of Finance, who publicly attacked the negotiations for the FTAA. The management
of pension funds, a strategic sector for public sector financing, continue
to provide consistent indications of a change from the 1990s financing rationale
to one more engaged with infrastructure investments, defining new private-public
Lula announced massive
hiring in the public sector, by recruiting civil servants through a process
involving an examination and called this hiring "the dismantling of dismantling
of the Brazilian State". By that he meant to criticize the outsourcing
of services to private enterprises during the 1990s.
More important still,
he prevailed upon the government to bet on the biggest plan of agrarian reform
in the country's history, surpassing the strict limitations of 2003 and strategically
realigning the Ministry of Agricultural Development with the countryside's
social movements. The public pressure demanding a reduction in the fiscal
adjustments was incorporated into the parliamentary work of the PT, via the
mediation of Jorge Bittar with the provision of 12 billion reals (US$ 4 billion)
of investment by the Federal government in 2004.
Finally, the inter-ministerial
group which, under the direction of the MEC (Ministry of Education), elaborated
a strategic plan for the University of Brazil, in contrast with the World
Bank's view, aiming to rebuild the public universities and double the availability
of degrees by 2007. At the start of 2003, against the expressed opinion of
the Finance Minister, the minister José Dirceu and Lula himself announced
the project to give autonomy to the Central Bank was not a priority in 2004.
The ministerial reform
reinforced the political strategy in the dynamics of transition. By publicly
confirming José Dirceu as political and administrative coordinator
of all ministries renewed power and legitimacy at the political core of Lula's
The appointment of Patrus
Ananias for the Ministry for Social Development to Fight Hungernow encompassing
the Zero Hunger and Family Allowance programs, and the Ministry of Social
Assistance is part of a strategy to guarantee the implementation of social
changes prioritized by Lula's government.
Patrus may become part
of the national leadership as he has acknowledged ethical and political stature.
Furthermore, his ability to mobilize masses is a vital assethe is part
of and shares views of a typical local Brazilian community, where the great
majority of population profess the Christian' faith.
The choice of two ministers
of PMDBEunício de Oliveira and Amir Lando, names unconnected
to "politicians who have been linked to the Party´s traditional
practice of promoting its own self-interest"consolidates the attraction
of this party for a strategic role at the center of Lula's government.
The ministerial pact is
the counterpart of the formation of a solid parliamentary majority in the
Congress "Senate and House of Representatives" neutralizing PSDB
and PFL attempts to built a strong center-right opposition bloc.
It was expected that for
the first quarter of 2004, the Central Bank would gradually lower interest
rates and the package of new direct or government-guided investment would
feed the modest growth initiated in 2003's third quarter.
Blockade to the Transition
However, this was not
what happened. The Central Bank, contrary even to immediate market expectations,
decided to stop lowering basic interest ratesthis was based on a clearly
artificial diagnosis of the danger of a return to inflation, doubted by even
more orthodox economists.
In fact, increasing the
real interest rate used in the economy generated expectations of maintaining
the interest rate for the following months and has increased uncertainties
Since then, there has
been a small speculative movement of financial capital as a result of gossip
about the dismissal or resignation of Henrique Meirelles (CEO) of Central
Bank and other high-ranked civil servants from the Ministry of Finance connected
In this climate, the Minister
of Finance imposed the requirement of creating a "technical reserve",
a large chunk taken from the 12 billion reals (US$ 4 billion) allocated for
the current year's expenditure by the federal government for direct investments.
This climate of uncertainty
was further deepened by the exposure, video-taped and broadcast on TV, of
a high-ranking civil servant from the Casa Civil, Waldomiro Diniz, who Minister
José Dirceu trusted most. Waldomiro was caught on camera, while he
was negotiating the laundering of money with an animal-game entrepreneur (jogo
do bicho-an illegal lottery, which compared to state-run lottery offers
smaller prizes) in 2002.
The shocking scenes were
obviously blown out of all proportion of its political meaning. The argument
for Waldomiro's case is that the Left and other critics of Lula's economic
strategy used it to try and undermine Palocci and Dirceu, the leaders at the
core of the PT government most associated with the transition strategy rather
than maintaining orthodox fiscal and monetary policies (i.e. the neo-liberal
The results of investigations
carried out so far make it clear a corrupt civil servant who enjoys unlimited
freedom to assist the government with its strategic tasks, is nothing new
in Brazilian politics. Investigations proved irregular activity between the
illegal animal-game entrepreneur and Gtech, services provider for Caixa Econômica
Federal state-run bank had existed since 1997 (at the start of the Fernando
Henrique's second term), with the involvement of many civil servants and leaders
of that institution.
The most bombastic and
partial press coverage on this matter was in Folha de S. Paulo, a newspaper
which has incessantly built up the idea Lula's government is just carrying
on neo-liberalism and its credibility is irreversibly damaged ("Lost
illusions," editorial of 22/2).
But even weekly newsmagazine
Veja, in its March 3 issue, stated: "To say that the PT or the
government commitment for administrative morality and ethics went down the
drain" is not only an exaggeration but stupidity. However, the government
has lost an excellent opportunity to show its practices are different and
its ethical discourse, so insistently repeated, by the opposition, was not
only for outsiders."
A much more balanced editorial
was printed by the conservativesO Estado de S. Paulo, Veja,
the newspaper O Globo and the magazine Época, who clearly
support the continuation of economic directions inherited from Malan's period.
Whereas O Estado was demanding the dismissal of José Dirceu,
the March 3 issue of Veja gave its long editorial the title "José
Dirceu, the Minister who shrunk ".
The episode surrounding
Waldomiro Diniz was not, until now, a government political crisis. Calls for
an inquiry because of a big public outcry and media hype was not even commonly
shared by the leaders of PFL and the PSDB. The provisional measure to outlaw
bingo outflanked calls for an inquiry and won the support of the majority
of the population ending suspicions that the PT have or had relations with
illegal gambling. But it is fair to suppose public exposure of the episode,
has badly damaged the PT's image of integrity.
This is surely where Lula's
government has made history, progress and devised a solid program with which
to build a strong public identity to fight systematic corruption.
It should be remembered
that it was during federal deputy José Dirceu's mandate that "Instituto
Cidadania" promoted several international seminars with major leaders
and organizations which led to a permanent program to identify and solve problems
to restore ethics in politics.
From the beginning, the
government has attacked systematic corruption on two main fronts. The Federal
Auditing Institute (Controladoria Geral do país) under Waldir Pires,
audited federal funds transferred to municipalitiesshowing irregularities
in 75 percent of cases.
The Ministry of Justice
and Federal Police are being equipped and taking action against money laundering
networks linked to organized crime and corruption. But more action is needed
There are three areas
where systematic actions could be implemented in the short term. In the first
place, the neo-liberal period was characterized precisely by increased private
lobbies in institutions and State-run sectors. It is therefore important to
give transparency by defining what is public and private, renew the democratic
sense of control of the Brazilian State and common good.
accountability, inclusion of civil society representatives, consistency of
regulatory norms and public control of bidding for state servicesLula's
government needs to give ample publicity of what has been done and what it
will do in this area.
In second place, the negotiation
among political parties is vitalas indicated recently by the PT president,
the definition of operational procedures as well as penalties to control illegal
expenditures. Finally it is essential to institutionalizeas discussed
in 2002 by the OAB (Brazil's Bar Association)an entity comprising three
main sectorsthe public ministries, the Treasury and representatives
of civil society to coordinate the work for corruption prevention.
Hour of Hope
Fernando Henrique Cardoso
in a comprehensive interview to O Globo on 15 February stated his position
against the PT manifesto"to bet only on economic growth is to fall
in a trap. Lula has been falling into a trap, which is to judge his government
on its growth", and elaborates further: "Economic growth nowadays
depends more on the market than national public policies".
It is not what the Brazilians
think, as was shown by CNI-Ibope December 2003. Sixty six percent thought
Lula's main task was to look after economic growth and create jobs.
Brazilian people's hope
cannot be at mercy of financial markets. To govern confronting openly the
financial markets is in Brazil's present political and economical conditions
an adventure with unpredictable results. To ignore the power and strength
of these markets is unrealistic but to govern the main economic variables
on a market rationale would be political suicide for a party like the PT.
Last December, Lula cried
emotionally in a meeting with the street sweepers (garis) in São
Paulo and promised a "good year" for 2004. A year with strong economic
growth, supported by policies to create jobs, would align the government with
the Brazilian working class's highest hopesit will bring efficiency
in social policies for emergency, increase tax revenue, decrease the debt,
and bring confidence for a new cycle of investment.
In the third month of
2004 it is clear that the interests of financial capital conspire against
economic growththey do not have the legitimacy of the Malan period and
only have the power of blackmailagainst this blackmail the political
will of the Brazilian people, PT, coalition and social movements must be imposedthese
have a vital task at the crossroads of hope. Those who have waited and trusted
have had their moments of agony and deception. Hope now claims the right for
joy in this moment.
Juarez Guimarães is a political scientist, professor at Federal University
of Minas Gerais, editor of Periscópio, monthly bulletin from
the Perseu Abramo Foundation. - http://www.fpa.org.br/periscopio/.
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