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Implications of Lula's
failure to triumph in
Brazil's election



Jonathan Power
TFF Associate since 1991

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October 4, 2006

LONDON - It was the late president of France, Charles de Gaulle, who famously said, “Brazil has a great future, and it always will have.” With the first round of the Brazilian election over with the favourite to win, President Luiz Inacio Lula da Silva, coming under increasing scrutiny for corruption - the seemingly eternal Brazilian political disease - many observers seriously wonder if Brazil can ever unlock its enormous potential.

Brazil has long lived out its personal fantasy of the archetypal relaxed, tolerant and gregarious country with Copacabana beach, the samba, the carnival and a great deal of sexual freedom, but all this has come at a price - the lack of discipline in both personal and public morality. The ingrained privileges of those who have already made it, together with the manipulative corruption of the established political class, make it difficult for Brazil to engage in the economic surge forward that should be at its beck and call. If ever a country has needed the somewhat mythical “Protestant ethic” it is Brazil.

Brazil once appeared to have everything - a nation of vast dimensions, the size of Europe, bounded by the steamy tropical rain forests of the Amazon to the north, and the cool, temperate, munificent, prairies to the south. No other country in the world offers such geographic contrasts, or probably such an abundance of raw materials and raw opportunities. But for the best part of four centuries too much of this has been squandered- the Amazon raped, the poor exploited and the rich indulged.

Despite all this Brazil has had periods of sustained growth. For the first 80 years of the 20th century it was, along with Taiwan, the fastest growing economy in the world.

But the Brazilian middle and upper class, riding on the subjugation of both the indigenous Indians and the descendants of black slaves, became corrupted by their own greed. By the 1980s the country had ossified into separate societies- one poor and often quite terribly violent (Sao Paulo is the most violent city in the world). The other cosseted and privileged and prepared through their political representatives to use very devious means to stay on top. Too many politicians are beholden to special interests- the self-important, slow moving, judiciary, the powerful landed class, inept and often brutal police forces, the public sector workers with their 100% state pensions and the well to do students who get a disproportionate share of state handouts while working class children are unable to afford a university education.

Hence an interlocking system of privileged that has made it difficult for Lula to break through. Tragically, the impasse has led to his senior party officials, in an attempt to break the stranglehold of an opposition that is powerful enough to stymie many of his parliamentary initiatives, to engage in the same underhand tactics. Although so far Lula has escaped being held to account, successive scandals have claimed the scalps of senior members of his administration. It is quite on the cards that before the second round of this election in a month’s time the opposition and the press will succeed in exposing Lula’s own complicity.

Brazil is the most unequal country in Latin America, and Latin America the most unequal region in the world. “There is increasing evidence that inequality adversely affects economic growth, undermines social cohesion and increases crime,” observes a World Bank report.

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Lula has done his upmost to change this situation. If he does win the election it is in large part because his programme, the Bolsa Família, which gives a small handout to poor families who promise in return to send their children to school has been a magnificent success. The poor have also benefited from the low inflation engineered by Lula’s economic team and the economic stability, marked by current account surpluses, achieved by both his administration and that of his immediate predecessor, Fernando Henrique Cardoso. Thanks to this discipline food prices have actually fallen and the government has had the money to spend on making primary education and basic rural health services almost universal.

But for the country to make the next big step forward and sustain the advances in poverty reduction it needs to increase its annual growth rate from under 3% to over 5%. This it can only do if Lula can break the back of entrenched interests and that he can only do if his party his strong in Congress and if he himself has a strong enough mandate to push through what he and his most intimate advisors know they have to do. With Lula now being forced into a second round this now looks unlikely. It is a sad day for Brazil if de Gaulle got it right.


Copyright © 2006 By JONATHAN POWER


I can be reached by phone +44 7785 351172 and e-mail:


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