Where now for Brazil?

Submitted by AWL on 22 February, 2003 - 5:02

The Workers' Party in power

Swiss socialist Charles-Andre Udry, in an article from late December 2002, looks at the prospects for the Lula government
The Lula government:

Change or be changed? On 1 January 2003, Luiz Inacio Lula da Silva will officially take up his post as president of Brazil. Since early autumn 2002, the international financial institutions (the IMF, the World Bank) as well as the bourgeois sectors represented by ex-president Fernando Henrique Cardoso (FHC) have put in place a mechanism designed to put maximum restraints on the "freedom of action" of a future Brazilian government led by the figurehead of the Workers' Party (PT), Lula.

The main candidates in the presidential election were presented with a draft treaty with the IMF; they signed it, including - or, rather, particularly - Lula.

Between the first and second rounds of the presidential election, important sections of the Brazilian bourgeoisie carried out a rapprochement manoeuvre with "the governmental core" of the PT. Lula's election appeared unstoppable. In its manoeuvring way, the Brazilian elite operated in two ways: on one side, making blackmail about financial destabilisation (to translate: flight of capital by the big Brazilian speculators and the transnationals, increased warnings of a possible default on the Brazilian debt...), and, on the other, negotiating for a "transitional government", promising strong elements of continuity with the economic model put in place during the two presidential terms of FHC.

The appointment to the Central Bank of Henrique de Campos Meirelles, the first Latin-American to have presided over an international US bank, the Bank of Boston, sent "a strong signal to the market" (to translate: gave assurances to the big financial institutions) and laid out a blueprint which the future Lula government would have to sign up to.

Lula and his ministers

On 23 December, Lula presented the list of his 25 ministers and eight secretaries of state. The Brazilian press reacted immediately. The big daily O Globo stressed the fact that two key ministers of the Lula government had supported the presidential candidate Jose Serra, the protege of FHC, and represented important economic sectors.

The first of these was Luiz Fernando Furlan. He has the "development, industry and external trade" portfolio. Furlan is no stranger to big international capital. He heads the biggest firm exporting poultry, pork and beef from Brazil: Sadia SA. Sadia owns 12 large factories in Brazil, distributed in seven states. Furlan is on the board of directors of Amro Bank Brazil (the big Dutch multinational bank). He also has links with the Association of Automobile Manufacturers. He is vice-president of the Association of Brazilian Exporters and of the Mercosur* Business Forum. He is also a member of the Brazil-USA Business Development Council and of the management of the Latin American Entrepreneurs Council (CEAL in Spanish).

Furlan was behind one of the important debates at the time of the last World Economic Forum (WEF) which took place during November 2002 in Rio de Janeiro. Before the Argentine Bankers' Association, at the end of 2001, Furlan explained lengthily the importance, in the framework of an economy "led by exports", of strengthening Mercosur so as to better negotiate a position favouring the bourgeoisies of Latin America (he was clearly thinking in the first place of that of Brazil) in the negotiations with the US for the Free Trade Area of the Americas (FTAA) (the future free-trade zone from Canada to Patagonia). It is in this framework that he views relations with the European Union. At the time of the WEF in Rio de Janeiro, he reaffirmed the priority of getting openings for Brazilian products in the framework of the FTAA and of negotiations with the World Trade Organisation.

It is not surprising when one knows that Sadia exports to 60 countries to the tune of $700 million in 2001. In an interview with the Brazilian magazine Exame, Furlan pointed out: "While the internal market continues to be depressed, the only way to regain the path of growth is exports." It seems from all this highly likely that the minister for "development, industry and external trade" will serve the cause of the big Brazilian national and international exporters. Such is the transitional programme - very transitional - between the FHC model and the "Furlan model".

Agriculture and... agrarian reform

Next to Furlan, we find Roberto Rodrigues at the agriculture ministry. He is one of the prominent figures in the structures of agricultural politics of Brazil. He has been at the head of almost all the institutions concerned with agriculture and agricultural exports. He was also a member of the National Monetary Council, of the National Council of Agricultural Politics, of the National Council for Overseas Trade and of the Enterprise Council for Competition. He was the agriculture secretary for the state of Sao Paulo during the government of Luiz Antonio Fleury Filho, known among others for its high degree of corruption. Besides his qualities as an academic, Roberto Rodrigues is a big real estate magnate in the region of Ribeirao Preto (state of Sao Paulo) and in the region of Maranhao. Rodrigues has always insisted on the export role of agriculture and on its importance for unleashing a surplus in the Brazilian balance of trade.

It is at the side of such a minister that Miguel Soldatelli Rossetto is named responsible for "agricultural development", that is, for agricultural reform. Rossetto is a member of the official left of the PT (the Socialist Democracy current). A trade union leader who was elected a federal deputy in 1996, he then found himself, from November 1998, in the post of vice-governor of the state of Rio Grande do Sul on the PT list, at the head of which was Olivio Dutra. The latter has also been given a portfolio, Minister for Towns, in the Lula government...

The simultaneous nomination of Furlan, Rodrigues and Rossetto is described in the Brazilian press as the expression of the existence of a future "plural government" in the Brazil of Lula. However, questions are already being asked. Indeed, the minister is supposed to carry out agrarian reform. In order to do it, it seems quite logical that he should ally himself with the sectors of small peasants and landless peasants, represented among others by the Landless Workers Movement (Movimento dos Trabalhadores Rurais Sem Terra (MST)).
However, the minister of agriculture Rodrigues is behind a proposal that was adopted by the FHC government aimed at denying agricultural reform in areas occupied by the agricultural workers organised by the MST. Something to make the minister for agricultural reform Mr Rossetto reflect. For such a law seems to be a sort of war on poor Brazilian peasants... more numerous than the great agro-exporting landed proprietors.

From compromise to renunciation?

The desire for change in the face of the social disaster caused by the neo-liberal policies of FHC is at the root of Lula's election victory. In the months to come - beginning with a series of concrete decisions relating among other things to the minimum wage and agricultural reform - several options are outlined: are we heading towards significant structural reforms (among others, in the areas of wealth distribution, of land ownership, of the model of exports), or are compromises with international financial institutions and the big private concerns and transnationals going to leave their imprint on the politics of the Lula government?

It is in this general framework that the following question poses itself for the "PT left": is hanging on to "positions of trust" (whose trust?) in the government compatible with participation, at the forefront, in the social movement? The latter is the only guarantee - in the shape of the inevitable social confrontations - that can initiate real changes, that is, the achievement of basic dignity for the large majority of the Brazilian population. The "governing core of the PT" has already embarked on one path. The "PT left" is at a crossroads, and sliding. Driving in a controlled skid is very tricky, especially when one does not have good tyres or control of the steering wheel.

Translation by Vicki Morris.
Charles-Andre Udry is a leading member of the Fourth International (United Secretariat), to which the Socialist Democracy current in the Workers' Party is also affiliated.

* Mercosur: attempt at a "common market" of Argentina, Brazil, Paraguay and Uruguay, with Chile and Bolivia as associate members

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