Brazil: Trouble in Lula-land

By Bill King
web posted July 21, 2003

The radical left around the world erupted in glee when Luiz Inacio Lula da Silva, presidential candidate of Brazil's Workers Party (PT), was swept into office this past January. Lula's victory made him the first leftist to be democratically elected in Latin America since Chile's Salvador Allende in 1970. Venezuela's Hugo Chavez was elected in 1998, and while he's mastered anti-US rhetoric he's more of a populist than a traditional leftist. Outrageously, after Lula's victory, radicals throughout Latin America even began to talk about an "axis of good" that would consist of Lula, Castro and Chavez!

Luiz Inacio Lula da Silva

Since taking office though, Lula has thankfully not lived up to the expectations of the loony left. Instead he's so far acted, to the surprise of many, with a good deal of moderation and maturity. He has largely continued the economic policies of his predecessor, Fernando Henrique Cardoso, and through his choice of ministers as well as his moderate statements he has restored the confidence of international investors in Brazilian markets. To a certain degree, Lula has even served as a moderating influence on Venezuela's Chavez, and has begun cooperating with Colombia's Alvaro Uribe in attempts to curb the expansionist terrorism of that country's main guerrilla outfit, the Revolutionary Armed Forces of Colombia (FARC).

Crucially, Lula's government also seems to be intent on taking on public sector unions and reforming Brazil's public pension system. This pension system is an archetype of big and wasteful government in Latin America: it currently allows some civil servants to retire before they are 50 and continue receiving their full salary. An overhaul of this system is key to Brazil's future economic health, as it alone accounts for almost 5 per cent of the domestic debt and makes up more than 40 per cent of government spending.

But it is precisely on the question of pension reform that Brazil's far left, feeling "betrayed" by Lula, has decided to emerge from the woodwork and throw a wrench into the mix. Ironically (or maybe not so ironically) it has chosen to defend a narrow "aristocracy of labor" instead of the millions of impoverished Brazilians. Since the Workers Party itself has always been a coalition of leftists, the result has been a boiling over of differences inside the party that were suppressed during Lula's "honeymoon" period.

The main opposition to Lula's plan for pension reform has come from individuals on the left-wing of the PT, public sector unions, and from the largest of the many Trotskyist groups in Brazil, the Unified Socialist Workers Party (PSTU). The latter party in particular, while small, is highly organized in a Leninist manner and ideologically rabid. It poses a growing threat to Lula from the left as it makes up the main opposition inside the largest trade union federation, the CUT, and is even making inroads among those in the PT who are opposed to Lula's new moderation.

Inside the PT, the tension is mounting. Four representatives from the party's left-wing, including a senator and three from congress, have balked at backing the proposed pension reform as well as virtually every other step taken by the new government. The most well-known of these is Senator Heloísa Helena, a member of the Trotskyite "Socialist Democracy" faction inside the PT. An expert headline grabber, she recently raised eyebrows by calling representatives of the IMF a bunch of "gigolos" and suggesting that they be tried for "crimes against humanity".

Helena has been a consistent source of opposition to Lula, from refusing to back his choice of vice-presidential candidate, textile magnate José Alencar, to denouncing the choice of market-friendly Henrique Meirelles as head of the central bank. In her battle against the PT leadership, she has been joined by João Batista de Araújo, Luciana Genro, and João Fontes, all of whom belong to competing factions inside the party. The latter two have apparently already been earmarked for expulsion by the PT leadership for having dug up an old video of Lula ranting against pension reform in 1987 and then giving it to the media.

At this point, all of the above, including Helena, are acting on an individual basis, and the groups they belong to inside the PT are hesitating between backing the dissidents and lining up behind Lula. The choice they make in the next few weeks will determine whether there is a respite for Lula, a full-blown factional war inside the PT, or whether those on the left will simply leave to form new parties.

Unfortunately, although perhaps not surprisingly, Lula and the PT leadership's response to these new challenges appears to contain the worst of both worlds. They are increasingly showing signs of being willing to compromise with the unions and to dilute the badly needed reforms; a recent public sector strike called to protest the government's proposals has left official spokesmen off-balance and making contradictory statements.

At the same time, the leadership has attacked democracy and freedom of expression inside the PT itself. As soon as Helena and the others made it clear that they would not vote with the majority on the issue of pension reform, Jose Dirceu, the "hard man" of Lula's team, lowered the boom. All four dissidents have been threatened with expulsion and have had gag orders placed on them. While it may be encouraging to see Lula crack down on the radicals inside his party, the way he has done this is cause for concern; it is an ominous portent of what could happen to Brazilian society at large if the PT were to veer to the left.

And as if the tensions around the proposed pension reform weren't enough, the situation in the Brazilian countryside is even more volatile. The Landless Workers Movement (MST), a traditional ally of the PT that is long used to taking direct action, refuses to wait for land reform legislation and has begun seizing land from landowners. These illegal and often violent occupations have almost doubled since Lula took office.

This poses a huge dilemma for the government. On the one hand, Lula has promised to reduce Brazil's massive poverty. And in a country like Brazil, where 2 per cent of the population owns almost 50 per cent of the land, that has to begin with land reform. On the other hand, any chance of carrying out a peaceful land reform program is being put in jeopardy by their long-time ally's violent tactics -- tactics which are provoking an armed response from landowners. Such reform can only proceed successfully if the MST is fully reined in, and for Lula that will prove a tricky undertaking to say the least.

The next few weeks will be crucial for Brazil. If Lula can succeed in the difficult task of isolating and defeating the radicals, and maintaining and implementing his reform agenda, then things could actually begin to look up for a country that has incredible potential. But if the rising tensions inside the ruling party explode into full blown inter-party warfare, and if the far left is successful in aggravating strife among the unions and in the countryside, the result could be a weakened Lula and an increasing paralysis of his government in the face of widespread social conflict. Let's hope it doesn't come to that. A destabilized Brazil -- the largest and most economically significant country in Latin America -- would be a nightmare for everyone.

Bill King is a long time observer of the radical left around the world.

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