Big vote and prospect of victory for Lula viewed as threatening by U.S. imperialists

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

The following article appeared in today's Wall Street Journal.  I assume
that Brazil is likely to  be subjected to a 19-day campaign of economic
intimidation and  political hysteria aimed at rolling back Silva's vote and
electing Serra or an acceptable alternative in spite of the obstacles.
(Maybe Serra  will take the Torricelli dive if that is allowed.) The only
thing that would restrain such a campaign now would be fear that the
consequences of such a campaign would  be even worse than the alternative.

The articles in the capitalist media in recent weeks, despite the ritual
references to Silva's :"moderation,"  have shown a growing consensus that a
Silva presidency will be bad for U.S. and other imperialist interests, and
there seem to be a growing number of workers and peasants who are determined
to make it so. I doubt that some pro-imperialist appointments to the central
bank or the finance ministry will  cancel out the conviction that a Silva
victory will be bad news.

The introductory comments that follow in parentheses are by Walter Lippmann.
In response to Walter's query below,  I think the Journal article portrays
Argentina's government as "left"  because it has not been able to suppress
working-class resistance or  imposed  the economic "discipline" demanded by
the loan sharks, thus placing it in the category of governments that are out
of line with the course being set in Washington and Wall Street.. -- Fred
Feldman

(The first paragraph of the article and the final one,
which I'm copying up here, are keys to the entire
report. I don't know where they get the idea that
someone of the left is in office in Argentina.

("In Venezuela," the article concludes, "President Hugo Chavez is downright
jubilant
over the prospect of a fellow leftist gaining power in
Brazil. 'Lula is a great man,' he said recently. 'The left
is going to win in Brazil. Changes are coming step by
step on this continent. I think about it day and night.'"
==========================================

October 7, 2002 12:09 a.m. EDT
BRAZILIAN ELECTIONS

Da Silva Is Shy of 50% Win,
Faces Runoff Vote With Serra

By MATT MOFFETT and JONATHAN KARP
Staff Reporters of THE WALL STREET JOURNAL


RIO DE JANEIRO -- Left-wing candidate Luiz Inacio Lula da
Silva held a wide lead in Brazil's presidential election,
but partial returns and an exit poll indicated he is headed
for a runoff. Still, the outcome marks voters' rebuke of
Brazil's internationally respected government and a
staggering blow to the political machine that has run Latin
America's biggest country since 1994.

With nearly 70% of the vote counted Sunday night, Mr. da
Silva, of the Workers Party, had won 46.8%, according to
Brazil's election authority. That left him shy of the
absolute majority needed to win the presidency and oust the
governing alliance of Social Democrats, big business and
conservative northern politicians. If Mr. da Silva didn't
cross the 50% threshold, there will be a second round of
voting involving the top two finishers on Oct. 27. Jose
Serra, of the Social Democratic Party, had received about
23.9% of the vote, for a distant second.

An exit poll earlier Sunday by Instituto Brasileiro de
Opiniao Publica e Estatistica, a respected pollster, showed
Mr. da Silva winning 49% of the vote. The poll's margin of
error is one percentage point.

The election is being watched closely throughout Latin
America, where the strength of Mr. da Silva, a former union
leader who lost three prior presidential bids, is viewed as
the clearest sign yet of public fatigue with free-market
policies that have been backed by Washington. If the
56-year-old Mr. da Silva wins, it will likely signal a
tougher line on trade negotiations between the U.S. and
Brazil and a doubtful future for other economic policies
favored by Washington, such as privatization. Meanwhile,
Wall Street investors are jittery over how the new
government intends to pay Brazil's $259 billion in net
public debt.

Whoever prevails in the end, the election promises to alter
Brazil's political landscape, recently dominated by a
center-right alliance that promoted free-market polices
during the 1990s. Mr. Serra has proved a divisive figure,
one who alienated some core members of the ruling alliance.
A third candidate, Ciro Gomes, siphoned much of the backing
from tradition-bound northern political bosses. And Mr. da
Silva ran a shrewd centrist campaign that drew an
unprecedented level of support from business and the middle
class.

All of this left Mr. Serra, who benefited from a big
advantage in funding and television time, waiting for a
bounce that hasn't materialized. And it's unclear whether
Mr. Serra will be able to fully rebuild the alliance ahead
of the run-off.

Mr. Serra has been Wall Street's favorite. Since Mr. da
Silva surged ahead in the polls in April, Brazil's currency
has tumbled, as have its stock and bond prices. Some
investment managers had feared that a first-round victory by
Mr. da Silva would give the leftist a stronger mandate and
prompt him to take a more adversarial line with investors.
But Marcelo Mesquita, a strategist at UBS Warburg in Rio de
Janeiro, says he is convinced Mr. da Silva would have to
govern moderately to stay in the good graces of investors,
just as the Social Democratic government has been forced to.

The current government "privatized, but they privatized with
nausea," Mr. Mesquita says. The Workers Party "is going to
have to do many things with nausea -- including negotiating
with the International Monetary Fund and doing road shows to
investors."

But others are uncertain. Mr. da Silva's background is a
departure from that of Brazil's current president,
sociologist Fernando Henrique Cardoso. Mr. da Silva is the
seventh of eight children born to a dock worker. He began to
attain national stature in the 1970s, leading a series of
strikes and demonstrations against the military government
then ruling the country.

Mr. da Silva has moderated his positions on a host of
issues. After asserting last year that an agreement with the
International Monetary Fund would "plaster" the government's
policy-making flexibility, he said more recently that a pact
could give Brazil a breather. He once insisted that national
agribusiness should focus on feeding Brazilians; now he says
it should attack the export market. After calling the
present government's anti-inflation fight overzealous, he
now says price stability is of primary importance.

Mr. da Silva's Workers Party concedes that the next
government will inherit plenty of headaches. "Whoever is
elected is going to have to deal with a grave economic
situation," says Jose Dirceu, president of the Workers
Party. Unemployment has "been transformed into a serious
social problem that puts at risk the country's
institutions."

Though the left has criticized U.S. proposals for a
hemispheric free-trade zone, Mr. Dirceu says the Workers
Party is ready to work with Washington on a range of
economic and political matters. "Relations with the U.S.
will not be ideological, will not be of confrontation; they
will be of dialogue," he says. "We agree to disagree over
Cuba and Iraq."

Political pollster Marcos Coimbra credits part of the
strength of Mr. da Silva, widely known as "Lula," to the
candidate's "very moderate posture, which didn't leave much
room for the old criticisms that he was radical." But Mr.
Coimbra adds that Mr. da Silva's adversaries also helped
him. "They have incurred a lot of missteps," he says.

Over the weekend, there was already finger-pointing within
the Social Democratic hierarchy over the nomination of Mr.
Serra, a Cornell University-trained economist widely
perceived as lacking the common touch. Tasso Jereissati, a
prominent Social Democrat, says this election would mark the
end of the dominance of "intellectuals and academics" such
as Mr. Serra and President Cardoso. After a debate last week
that offered Mr. Serra a chance to seize some momentum, he
was criticized as wooden and nervous by focus groups, which
graded him lower than any of the other three candidates.

Amid the continent's worst economic crisis in 20 years,
leftist leaders already rule in Argentina and Venezuela.
In Venezuela, President Hugo Chavez is downright jubilant
over the prospect of a fellow leftist gaining power in
Brazil. "Lula is a great man," he said recently. "The left
is going to win in Brazil. Changes are coming step by
step on this continent. I think about it day and night."

Write to Matt Moffett at matt.moffett@xxxxxxxx and Jonathan
Karp at jonathan.karp@xxxxxxxx













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