Dilma Rousseff and the magic of Lula
by Raul Zibechi*
The last miracle but one performed by the metal-worker who became president of Brazil in January 2003 was to pass on his enormous popularity to an almost unknown woman called Dilma Rousseff. In October 2008 only 8.4% of the population said they intended to vote for her; by 2009 the number had risen to 14%. Next Sunday the candidate chosen by Luiz Inácio Lula da Silva is likely to receive half the nation’s votes, and could become the first woman president in Brazilian history. Only the magic of Lula can explain her dramatic rise.
But it is Lula’s final miracle that reveals how successful his government has been. Petrobras, the partly nationalised state oil company, has just attracted the largest input of capital in history – $70bn worth of shares. Brazil has become a world power, and it is the only one of the Bric quartet (Brazil, Russia, India, China) to combine a powerful industrial sector with self-sufficiency in energy. By 2014 it will become a major exporter of crude oil, thanks to the discovery over the last 10 years of new deposits under a thick layer of salt more than 5,000m below the ground and 300km off its coast.
The two events have one thing in common – a political strategy that restored a key role to the state. When Lula came to power the poorest people did not vote for him, for fear of radical changes that would create instability. When he entered the presidency he set in motion the “family plan”, a programme that transferred money to families earning less than $82 a month – 50 million in a population of 190 million. Although the amount of cash was minimal – between $13 and $117 per family – it was enough to stave off hunger and reduce the levels of extreme poverty. More important, he raised the minimum wage by 54% in real terms.
These measures, together with a significant increase in exports – soya, meat, iron ore to China – transformed Brazil. Those earning between three and 10 times the minimum wage grew from 37% to 50% of the population. About 25 million people were lifted out of poverty to become consumers. These people are Lula’s social base. They adore him, though they have only recently begun to vote for his Workers party. For the first time Brazil’s left has a majority among the poor and marginalised.
And this is despite the fact that Brazil’s new middle class – made up of the millions who have emerged from poverty over the last 10 years – profess religious and family values and do not participate in social movements. They do not support Lula for ideological reasons; rather, as the sociologist Rudá Ricci points out in his book, Lulismo: “[The new middle class] consists of people who do not read and are entirely pragmatic.”
The state directs the economy without strangling it. While the populism of Getúlio Vargas created state enterprises in key areas in the 1950s, Lula’s government has worked to strengthen Brazilian private capital. Through the National Economic and Social Development Bank, the largest such bank in the world, it has promoted mergers between big firms competing in the world market. These are the “Brazilian multinationals” such as Petrobras, Odebrecht, Embraer, Vale and the Itaú-Unibanco and Bradesco banks.
Nevertheless, the account of Lula’s eight years must also recognise weaknesses in a country aspiring to global power status. The first is that its economic strength rests on the export of commodities on a massive scale, with no added value or technological input. Second, Brazil remains one of the world’s most unequal countries: 20,000 families control 46% of the wealth, and 1% of landowners possess 44% of all the land. Third, its armed forces, charged with the defence of the Amazon and the world’s fifth largest oil reserves, are weak. (Though Lula has developed an excellent relationship with the armed forces: he is the first president since the military regimes of 1964-85 to promote widespread rearmament.)
Lula will remain active in politics in the years to come, directing Dilma Rousseff’s steps from the shadows. It will not be easy. Internally, the government rests on a complex alliance of 10 parties ranging from the communist party to the centre-right. Regionally, it must consolidate Unasur (the Union of South American Nations) which embraces governments as different as Venezuela and Bolivia on the one hand and Peru and Colombia on the other. But Lula has already achieved the hardest part.
Translated from Spanish by Mike Gonzalez
* This article is published by the Guardian