AUT: Brazil and Lula was 'The "National Strike" in Venezuela'

["chris wright" <cwright@xxxxxxxxxxxxxxx>]

I thought this was relevant to the discussion of Lula.  It is careful,
though there is much that might be asked after and the information of the
MST and the restraint Lula was able to command was worrisome at best.

Cheers,
Chris

NEWS & LETTERS, December 2002
Mass unrest inspires Lula's victory in Brazil

by Mitch Weerth

On the first day of 2003, Luis Inacio Lula da Silva takes over as Brazil's
President, having won 61% (52.7 million votes) in the second round election
on Oct. 27. Lula's victory is seen throughout Latin America as a huge
advance for the Left, given the fact that Brazil, with 170 million people
and by far the biggest economy south of the U.S., has never had an avowed
"socialist" in power.

Nobody in Brazil has ever won so many votes. As 100,000 people came out into
the streets of Sao Paulo to celebrate the night of his victory, Lula himself
indicated the high stakes this move to the Left represents: "If at the end
of my tenure all Brazilians can eat three times a day, my mission will have
been completed."

This is not just hot air from the new man at the top. The Workers' Party
(PT) that Lula founded in 1980 under the military dictatorship was a truly
mass party of the working class, and while in many respects it has moved
away from its radical roots, it embodies today a vision that over 52 million
Brazilians have rallied around.

Lula's challenge to end hunger in four years is an honest reflection of what
brought him to power. Some 54 million people are classified as "poor" in
Brazil, and another 30 million are "indigent" or destitute. Basic services
that have been privatized since the early 1990s under neo-liberal
restructuring have had a devastating impact on workers' struggles to merely
survive. The cost of electricity is up 368%, telephone service 3,700%, water
420%, and urban transportation in urban areas, where 80% of Brazilians live,
300%.

Unemployment is up 50% in the past decade, but this figure only gives part
of the story. In the cities fully 32% of Brazilians do not have a so-called
real job. It's estimated that the informal sector now employs as many people
as private industry and government combined. In the greater Sao Paulo area
20% of able bodied workers have no job whatsoever.

This last number should ring a bell: it's where Argentina's unemployment
rate stood right before the crash of December last year. Upwards of 70% of
the population is now struggling by in the informal sector; goods change
hands mainly by barter. The suffering has reached horrific proportions, and
it is this that has to be understood if one is to grasp what is happening in
Brazil.

Nothing has been able to prevent the latest disaster: up to 14 children
dying each week from hunger. The problem is worst in the northeast of the
country, but the scope of it is not yet known. Teams of emergency workers
are just beginning to make door-to-door searches in every neighborhood to
find out how many there are who are too weak to get to a hospital or even to
call for help.

BRAZIL TO FOLLOW ARGENTINA?

While Argentina's economy has crumbled, Brazil stands on the precipice. And
while the misery of the past decade in both countries is well enough known,
there are still those who persist in denying that Lula's election was in any
way a result of it. Consider the erudite, well-paid scholar Kenneth Maxwell
(Director of Latin American Studies at the Council on Foreign Relations and
Foreign Affairs magazine) who wrote in The New York Review of Books
(12/5/02) that "it is an exaggeration to say that the elections were a
rejection of the 'Washington Consensus' on economic development and the
so-called 'neo-liberal' model, as many outsiders claim."

Far from it being an "exaggeration" of "outsiders," this is what nearly
every Brazilian, whether lower class, middle class, or the sector of the
ruling class that supports Lula, has been saying for the past six months
about what the election represents.

A worker in the city of Caixas, where all the textile plants have been
closed down over the past eight years, put it this way:

"They have massacred our jobs and our communities. The few who still have
jobs are left to shoulder too heavy a burden. Wages must be increased
immediately, and public funds must go to creating a massive public works
program. The bosses and their international banker friends can wait to be
repaid. It's our turn now. We the people have spoken. If they don't like it,
well, that's just too bad."

This statement reveals very clearly that Lula was elected not just because
of the "fear" of contagion from Argentina that investors and economists talk
about. It's rather because of a very hard, lived reality: Brazil has already
gone too far down the same road. Is there time to pull back? Is there a way
out?

The answer to this question requires a careful look at three things: 1) Just
what is the "vision" that Lula projects today? 2) How seriously do the
Brazilian masses believe in it? 3) What is the possibility of Lula actually
succeeding?

It must first be understood that the PT is not alone on the political
landscape. While Lula won in 25 of 26 states, PT governors won in only three
of them. The outgoing ruling party (PSDB) won seven, including two key
states, Sao Paulo and Minas Gerais. Though the terrain is different in
Venezuela under Hugo Chavez, Brazilians can look north and see an
opportunist dragging a polarized country to the brink of civil war.

Within the PT, while approximately 30% of the party is composed of
established tendencies that do not agree with much of the platform Lula ran
on, he did put out a clear message. It was carefully scripted by himself,
the president of the party Jose Dirceu, and his running mate, textile tycoon
Jose Alencar.

In Lula's own words, it goes like this:

"The state of our economy does not depend on us alone, but on the whole
world, and we're seeing the problems afflicting all nations, problems that
show the failure of cruel economic models. We see the problems in the U.S.
economy, and the growing threat of war. But we're open to a mutually
respectful relationship. Unfortunately we depend on that volatile global
capital, but this fact alone cannot immobilize us."

Thus you have the new Lula: we accept the demands placed on us by the IMF
(whose current scheme for Brazil extends to 2005, the third of Lula's four
years), yet we reject the notion that a more just distribution of wealth is
not possible.

Jose Alencar (from the rightist Liberal Party, PL), who represents that
sector of the bourgeoisie who wants to reclaim a portion of the national
wealth sold off to foreign investors, today refers to himself (only half
jokingly) as being "to the Left" of Lula. He makes this claim because his
party too is opposed to Brazil's deep indebtedness to foreign investors.

How did this play out in the campaign? Alencar was not quietly accepted. He
was booed loudly at the few rallies he appeared at with Lula, including the
victory rally, and it was common to see campaign stickers posted with his
name cut out of them.

PATIENCE, FOR NOW

As for Lula, a consensus emerged that nothing would be done in the months
prior to the election to jeopardize his victory. This included calling a
truce with the outgoing President Fernando Henrique Cardoso. The extent to
which this truce was carried out, either explicitly or implicitly, is
remarkable.

The Landless Workers' Movement (MST), for example, practically called a
moratorium on land seizures in the past year. And when a piece of Cardoso's
son's property was occupied in May of this year, Lula declared no illegal
land takeovers would be permitted under his administration. Land reform must
be pursued through a "positive, constructive" process, he said. So far, the
MST has gone along with him. The university youth, too, have so far followed
this path.

The opposition within the PT let its displeasure with Lula be known, and yet
also refrained from sowing too much discord within the ranks. A few lines
from a statement from the O Trabalho current reads:

"Working people made clear that they want an end to this 'economic model'
dictated by the IMF, which provokes the bleeding of the nation in order to
pay the foreign debt...It's impossible to accept that those who were
defeated Oct. 6 (in the first round) would still push the country into
disaster and chaos. They were defeated exactly for having concocted, in 20
years, 13 accords with the IMF, all of which have led Brazil to its current
dire situation...It's impossible to accept their dictates!"

This is not the voice of a fanatical few. Nearly a third of the PT
candidates elected to Congress Oct. 6 are from the left wing of the party.
Nevertheless, as these new representatives threatened to meet a week prior
to the Oct. 27 vote to decide how to move Lula leftward again, they relented
under pressure from Dirceu who asked them to not place obstacles in the way
of Lula's victory.

None of this story should be taken to suggest that the Left in Brazil will
continue to toe Lula's line; it was specifically followed only to insure his
victory. There was even a popular refrain used to explain it: "Lulala, e
depois luta ca," or roughly, "Lula there (in power), and afterwards struggle
here."

That struggle, both as it will be waged against Lula as he moves to calm the
ongoing rage against poverty, and with him as he attempts to enact an
efffective campaign against hunger and start land reform, faces huge
obstacles.

ECONOMIC REALITIES

To begin with, the hammering that international investors meted out to
Brazil in the months prior to the election, driven by their fear of an
ex-lathe operator with no college degree rising to the highest office, puts
Lula's movement behind the eight ball. Due to foreign investors' actions,
Brazil's currency, the real, has lost 43% of its value against the dollar.

Lula proposes to immediately form a new "Secretariat of Social Emergency" to
lead the effort to end hunger, but 95% of the budget for 2003 is already
decided. The budget for this new department will thus have to come from
donations.

He proposes to offer tax breaks to small businesses to stimulate job growth.
What the IMF plan calls for, however, are tax increases, coupled with cuts
in social programs. Guido Mantega, an economic advisor to Lula, states in no
uncertain terms that: "There is not the slightest possibility of
restructuring the debt." Lula also stated this innumerable times in the
campaign.

Nor is it clear where the tax increases to pay debt servicing will come
from: the more workers are thrust into the "informal sector," the less they
can be taxed. In addition, the tax burden in Brazil is already equivalent to
about 30% of gross domestic product, a high value in comparison to other
countries with similar output.

On the other hand, the agrarian reform that Lula calls for would go a long
way to fighting poverty. The problem is that unless land expropriations are
carried out in the course of a revolution, landowners must be compensated,
which costs a lot of money. There are an estimated 100,000 families camped
out on illegally occupied land today, a result of 15 years of struggle by
the MST. A common figure thrown around for the cost of the kind of reform
Lula wants is $40 billion.

Throughout the campaign Lula indicated relief might come from placing more
emphasis on Mercosul, the common market between Brazil, Argentina, Uruguay
and Paraguay. This could presumably serve as a counterbalance to the U.S.
and Europe. His first foreign visit will be to Argentina, the second biggest
of the four countries.

The problem here is not alone the dire straits Argentina is in, but the fact
that Brazil's foreign trade with these countries at present only accounts
for 15% of its total. It's unknown how a substantial increase could be
achieved.

Lula is in a straightjacket. He knows this, and to his credit has not
promised anyone, such as the Caixas textile worker quoted above, a "massive
public works program." He will get a wage increase soon, though it won't be
as much as he needs.

The key question is therefore whether the next four years will be only about
a struggle for higher wages, or about the need to restructure production and
life in accordance with the goal of human self-development rather than the
self-expansion of capital.




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