Were a presidential election to be held now, Lula would defeat ex-president
Fernando Henrique Cardoso by a comfortable margin, according to a recent poll.
It seems as if the drop off in Lula's popularity may have leveled out. However
many politicians who had assumed that Lula would be easily re-elected in 2006
due to prosperity, jobs, economic growth and better social conditions that
he has promised, are beginning to have second thoughts.
This doubt as to whether
or not Lula will be in office for another term is starting to affect the behavior
of many coalition members. Politicians want to be careful not to be perceived
as closely associated with Lula if he is to be merely a one-term president
and a temporary swing to the Left.
One party that has been
a lukewarm supporter of Lula, the PPS (Partido Popular SocialistaPopular
Socialist Party), expresses their dissatisfaction with the way things are
going. This is embarrassing since Minister of the Interior. Ciro Gomes, who
lost out to Lula in the first round and later supported him in the second
round of the 2002 elections, is currently a member of this dissident party.
If Ciro senses that Lula is not invincible in 2006, he may come back to life
as an alternative.
The PL (Partido LiberalLiberal
Party), of Vice President José Alencar, constantly criticizes the policy
of high interest rates maintained by Finance Minister, Antonio Palocci, and
silver-tongued Central Bank President Henrique Meirelles.
Other parties that comprise
the "coalition" such as the PP (Partido ProgressistaProgressive
Party), the PTB (Partido Trabalhista BrasileiroBrazilian Labor Party)
and even the large PMDB (Partido do Movimento Democrático BrasileiroParty
of the Brazilian Democratic Movement) express discontent with the government
and their failure to have been rewarded for past legislative support by spoils
system jobs. The Workers' Party (PT) has kept most of the key positions for
its own members.
Potential PSDB (Partido
da Social Democracia BrasileiraBrazilian Social Democracy Party) presidential
candidates, Governors Aécio Neves and Geraldo Alckmin of Minas Gerais
and São Paulo states respectively, have so far not been openly critical
of Lula's government so as to not spoil their chances of receiving federal
aid for their important states. This may change soon if Lula looks vulnerable
The elections for the
mayors of all cities in Brazil will be the first real test of the PT's popularity
with voters. Lula is risking a great deal by ostensively backing the current
PT mayor of São Paulo, Marta Suplicy, who is seeking a second term.
A recent poll shows her
loosing to two potential candidates, Paulo Maluf and José Serra, neither
of whom has said he will be running. Marta's popularity has diminished drastically
in the last year. This is due to the continuing problems São Paulo
faces such as frequent floods and nearly perpetual traffic snarls, the latter
condition exaggerated by several road jobs she has ordered.
Still Popular with
Lula, in spite of the
PT run government's failure in most areas, still has the support of a majority
of the population due to his apparent sincerity and folksy manner that appeals
to the lower end of the intellectual scale.
The President has even
appeared on a popular fourth-rate talk show hosted by Ratinho (The Little
Rat). Even the recent planting of flowers in the form of a red star, the symbol
of the PT, in the gardens of the presidential residences, a clear abuse of
power, has not turned off the populace.
Lula is becoming impatient
with the failure of his government to produce any concrete action. With the
notable exception of the financial team and the Minister of Agriculture, Roberto
Rodrigues, and Luiz Furlan who is Minister of Industrial Development and Foreign
Trade, Lula's cabinet seems incapable of performance. It is interesting to
note that these two men have had experience in the private sector where as
the vast majority of Lula's collaborators have not.
In spite of available
funds, none of Lula's projects, announced several times with great fanfare,
have been implemented. These include Zero Hunger, water and sewer works, agrarian
reform, cheap pharmaceutical products, job creation, and the partnership between
the government and the private sector for much needed infrastructure works.
He recently gave fifteen
days for his ministers to come up with solutions. Ideological prejudices plus
an excess of bureaucracy and plain incompetence seem to be the principal causes
of this inertness.
Earlier this month, JP
Morgan caused a ripple by recommending to their clients that they reduce the
level of Brazilian paper in their portfolios. Citicorp followed the next day
with a similar recommendation for different reasons. The authorities and press
have been quick to point out that these institutions are wrong and that all
The macro economic situation
with continued rigid fiscal and monetary discipline would seem to rule out
for the time being any massive exit on the part of buyers of Brazilian foreign
debt instruments. But should signs of laxity or "permissiveness,"
as Morgan fears, or a perceived weakening of support for the well-respected
financial team appear, problems may arise. An increase in US interest rates
may diminish the attractiveness of emerging market assets making it more difficult
for Brazil to raise the funds it needs abroad to pay interest and maturing
Lula appears aware of
this delicate situation and has expressed unwavering support for the current
economic policies in spite of criticism from all sides, including factions
of his own PT. His government is criticized for its failure to react to the
illegal invasion of private property on the part of several social movements,
mainly the MST (Movimento dos Sem TerraLandless Movement) and the urban
"sem teto" or literally "without a roof."
These incidents plus the
continuing violence in the slums of Rio de Janeiro, the killing of diamond
prospectors by Indians in the far west state of Rondônia, the on again
off again strike of the Federal Police that controls among other things immigration
procedures at airports, have caused negative comments by the press and many
politicians including the Chief Justice of the Supreme Court, Maurício
Brazil is not an easy
country to govern. Lula is doing his best to accomplish what he hopes to do.
Considering that his unprepared administration is the first admitted far left
wing government to run the country during its nearly 182 years of independence,
it is amazing that things are no worse than they are.
We can only hope that
this peaceful transition will soon bring positive results and that the PT
does not allow the situation to get out of control. In spite of the showings
of the recent UN survey, I doubt that Brazilians wish to trade democracy for
a return to an authoritarian regime.
Richard Edward Hayes first came to Brazil in 1964 as an employee of Chase
Manhattan Bank. Since then, Hayes has worked directly and as an advisor
for a number of Brazilian and international banks and companies. Currently
he is a free lance consultant and can be contacted at email@example.com.