Dilma’s Victory In Brazil: People Reiterate Against Neoliberalism
By Farooque Chowdhury
03 November, 2010
Countercurrents.org
The undecided class antagonism in Brazil has reiterated its verdict: People stand against neoliberalism, people-oriented macroeconomic policies are the preference. Dilma, the former Marxist guerrilla turned newly-elected President of Brazil, now stands with the standard of people’s verdict under the shadow of Lula. The election result is the expression of people’s unfulfilled dreams in the backdrop of conflicting class interests storming the biggest economy in Latin America.
About 136 million voters pushed Dilma to second round for putting her to presidency of the world's eighth (ninth on the basis of another methodology) largest economy. Running to the second round of the election carries significance. Dilma of Partido dos Trabalhadores (Workers’ Party / PT), had the energetic support of Lula, who led efforts to pull up more than 20 million people over poverty line.
Dilma has promised to carry on Lula’s tasks: the social welfare programs including bolsa família that benefits 15 million families (more than 25 percent of the population) having positive impact on their human security. Lula has changed the pension system, doubled the minimum wage in real terms, created scholarship program benefiting more than 200,000 students, and reduced taxes on food and cooperative construction projects. One of Lula’s major achievements is the creation of 12.5 million formal jobs outpacing informal job growth by a three-to-one ratio.
Lula's presidency made significant progress: cumulative per capita GDP growth of 23 percent, as compared to just 3.5 percent during the Cardoso, the president preceding Lula, years (1995-2002), considerable drop in measured unemployment, from over 11 percent when Lula took office to 6.9 percent today. From 2003-2008, the poverty rate fell from 38.7 to 25.8 percent. (UN Economic Commission on Latin America, quoted in Mark Weisbrot, “Who Will Allow Brazil to Reach Its Economic Potential?” MRzine, 29.08.10) According to the United Nations’ Millennium Development Goal (MDG) Monitor, Brazil has already achieved four of the goals: eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, and combat HIV/AIDS, malaria and other diseases. The rest four goals, reduce child mortality, improve maternal health, ensure environmental sustainability and develop a global partnership for development, are considered very likely to be achieved.
“Rising formality in Brazil … is significant not only for future policy design in Brazil and larger debates within the country about the role of government, but also because it can shed light on several other debates in economic development”: 1. “what economic model is best for economic growth and job creation”; 2. “whether growth in and of itself is sufficient for improving working conditions, or whether government intervention is also needed”; 3. “the neoclassical claim -- that labour market regulations impede job creation.” The rural pension benefits 8.3 million rural workers. Another program benefits 3 million elderly poor and disabled. Fifty-two percent of Brazilian households are now considered to be in the “middle class”, a growth of 22 percent over 2004. Brazil under the leadership Lula has showed the important role government policy plays in ensuring workers’ gains from economic growth, domestic-demand-led growth, wage policies fuelling demand, wage increases creating jobs, social safety net, need for micro-level policy interventions, and a labor force aware of its rights that helps change actions. Formal workers in Brazil enjoy important benefits and protections, pension, sickness, disability and death benefits, paid annual leave, parental leave, restrictions on working hours and a guaranteed minimum wage. But informal workers are not guaranteed those rights. They are to negotiate with employers. (Janine Berg, “Lula's Labor Legacy” TripleCrisis, October 4, 2010) Lula initiated the growth acceleration program (PAC) for improving decaying infrastructure with plan for further investment of $500bn over the next five years.
With a young, increasingly affluent population Brazil is now one of the world’s hottest emerging markets as more than 30 million have joined the middle class. The success of the Lula’s strategy is reflected in the Great Financial Crisis’ mild effects in Brazil that Lula jokingly described a marola, a minor ripple. These form one aspect of the perspective that has made Dilma victorious.
The other aspect of the perspective is: still reigning poverty, class inequality in a sharply stratified society, socioeconomic apartheid, and the Landless Rural Workers Movement (MST).
The age-old power-relations, and increasing aspirations of the new urban middle class will stand as blocks to move forward. Essential needs in the margin of the society, and the immediate requirements to widen the path to progress will act fundamentally in Brazilian politics. “A big question”, as Mark Weisbrot, co-director of the Center for Economic and Policy Research, in Washington, D.C. asks, “would be who is going to take the country forward and adopt the policies necessary to achieve Brazil's economic growth potential? Who will stand up to the powerful private interests that oppose such changes -- especially the financial sector, which favors high interest rates, slower growth, and an overvalued currency -- and most of the major media?” (“Who Will Allow Brazil to Reach Its Economic Potential?” MRzine, 29.08.10)
The outcome is still unknown. However, Weisbrot provides an answer: “This will be no easy battle – but the outcome will have an enormous impact on the living standards of the vast majority of Brazilians.” Dilma will be part of that battle, and PT will play a significant role there.
These actions and reactions to the actions will be reacting with each other in Brazil in a Latin America, which is now far away from the famous/infamous Monroe Doctrine and the Roosevelt Corollary, which is now going through a process of transition, where neoliberalism has lost legitimacy, where “in virtually every election the peoples voted for anti-neoliberal candidates” … creating three types of governments: “a left-wing group — Venezuela, Bolivia and Cuba — a moderate group in transition from neoliberal policies and confronting U.S. policies — Brazil, Argentina, Uruguay, Peru and Ecuador — and a group of faithful allies of the United States — Chile, Paraguay and Colombia.(Rosa Maria Marques and Paulo Nakatani, “The State and Economy in Brazil: An Introduction”, Monthly Review, Feb. 2007) Dilma now stands there, on the soil of that continent, with the burden of justified aspirations of a people deprived of rights to a decent life.
Political realities, which are actually manifestation of class power equation in a society, will determine her acts, and the acts will show that whether those are compromises without principle in the name of pragmatism or compromises without forgetting principles. Realities are not mere desires and good wishes. Marta Harnecker elucidates: “[W]e must be very clear about what they cannot do, not through lack of will but because of objective limitations.” (Latin America and Twenty-First Century Socialism, Inventing to Avoid Mistakes) “[T]he balance of forces,” she adds, “institutional mechanism, and economic circumstances that would allow the Brazilian government to operate in a manner similar to that of the Venezuelan government do not exist.” Dilma cannot escape this reality that Marta described while discussing Lula government.
Brazil’s standing, especially in international arena, has changed significantly since Marta penned her book. Lula’s, jointly with Turkey, uranium-swap agreement with Iran last June showed his effort to take independent position in global arena. Brazil has formed alliances – BRIC, IBSA, G-4 – with China, Russia, India and South Africa. Lula emphasized on South-South trade, and strengthened relations with Africa and the Middle East. In Latin America, ALBA is significant despite its limitations and pulls and pushes. Brazil is in ALBA. These reflect Brazils’ efforts to make a shift from US-dependence to independent position. Its domestic economy is pushing it to resort to these moves in foreign policy. Dilma now is part of this legacy of Lula. Economic interests dominating her politics will determine her moves in geopolitics now quite unstable.
Changes going on in Brazil are still not solid. But they raise hope in countries searching for alternative to business as usual that deprives the majority, the people. The efforts there for a just and decent life for the majority have already exposed the fallacies dominating economic theories always propagate: least possible role of state, discard state’s responsibility in providing basics of life to people, put on sale everything including healthcare and education and let people buy these from private capital.
In the area of foreign policy, Brazil has also shown alternative that poor countries can consider for their survival space and to create new opportunities.
Alternative steps help people live a better life. People, on the contrary, de-legitimize a system if the system appears non-responsive to people’s aspirations. Brazil thus stands as an example to countries struggling with poverty.
Farooque Chowdhury, a Bangladesh-free lancer
contributes on socioeconomic issue
