Wednesday, July 23, 2014
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Lula's Legacy

MEXICO CITY – The first round in Brazil’s upcoming presidential elections, scheduled for October 3, may turn out to be the only round. For outgoing President Luis Inácio Lula da Silva’s hand-picked successor, Dilma Rousseff, is very close to winning an outright majority of the vote.

Rousseff's main opponent, São Paulo Governor José Serra, has not gained traction with voters, owing to his inconsistent stances – ranging from withering criticisms of Lula’s foreign policy to outright support for his social policies. According to some polls, Serra is more than 20 points behind.

Lula leaves office with astonishing popularity for a two-term Latin American president. The economy is growing at a double-digit rate, and the 2014 Soccer World Cup and 2016 Olympics are on the horizon. Under Lula’s stewardship, millions of Brazilians emerged from poverty, and the middle class has become a majority – albeit a small one. Brazil has acquired an international stature worthy of its size and success, though perhaps not of its ambitions. Its democracy is thriving and vibrant, if not always effective or without corruption.

But there are grounds for skepticism about Lula’s legacy, and the fact that they are rarely mentioned does not diminish their significance.

First, economic growth continues to be essentially based on domestic consumption and commodity exports. There is nothing wrong with either per se, so long as they are sustainable in the medium term and viable in the long term. The problem is that Brazil’s overall investment rate remains around 16% of GDP, far less than Mexico’s or the Latin American average, not to mention China (40%). At that rate, the country’s infrastructure and competitiveness will inevitably decline.

Rousseff’s solution is massive state-funded investment, financed by the National Development Bank (BNDS), in key economic sectors (oil, meat-packing, construction). But that strategy will most likely reinforce the corruption that has been a fixture of Brazilian politics for decades – and which improved little under Lula.

A second issue is the highly touted Bolsa Familia, which began under Lula’s predecessor as Bolsa Escola, and was originally devised by the economist Santiago Levy under Mexican President Ernesto Zedillo. These “conditional cash transfers” were initially intended to stop inter-generational poverty by helping to ensure that children are properly fed, schooled, and kept healthy. But, under Lula (and under Vicente Fox and Felipe Calderón in Mexico, for that matter), they became a direct anti-poverty program aimed at the current generation of poor.

No one questions the generosity of this mutation, but it is far from clear that the nearly 15 million families receiving Bolsa Familia will maintain their current income level when the stipend disappears, or that it can be sustained indefinitely. Bolsa Familia has been a stunning electoral success, and undoubtedly increased bottom-of-the-pyramid consumption in Brazil. But there are doubts as to what it can achieve in the long run to eradicate poverty.

Third, Rousseff's rhetoric and origins as a militant leftist feed doubts as to whether she will pursue Lula's pragmatic, centrist economic and social policies. Her democratic credentials are as solid as his, but there are worries about her apparent enthusiasm for state intervention in the economy – she seems to believe in the virtues of Keynesian fiscal stimulus at all times – as well as her ability to control the Workers’ Party the way that Lula did.

Foreign policy has been the most criticized aspect of Lula’s tenure, and Rousseff will most likely make things worse. As an opponent of the military dictatorship that ruled his country years ago, Lula advocated respect for human rights, free and fair elections, and representative democracy. But he paid little heed to these issues in office, dismissing concerns about human rights and democracy throughout the region and elsewhere, particularly in Cuba, Venezuela, and Iran.

Lula accentuated the traditional Brazilian attitude of not meddling in Cuban affairs, to the point of traveling to Havana shortly after a hunger-striking dissident died in prison there. When asked what he thought, Lula practically blamed the hunger striker for his death. He also welcomed Iranian President Mahmoud Ahmadinejhad in Brasilia and São Paulo almost as a hero barely three months after Ahmadinejhad stole Iran’s presidential election in 2009, which resulted in a wave of violent repression. And, within a year of the vote, Lula traveled to Iran.

Lula also turned a blind eye to Hugo Chávez’s increasingly heavy hand in Venezuela, never protesting or questioning his jailing of opponents, his crackdowns on the press, trade unions, and students, or his tampering with the electoral system. Brazilian corporations, especially construction companies, have huge investments and contracts in Venezuela, and Lula has used his friendship with the Castro brothers and Chávez to placate the left wing of his party, which has never been comfortable with his orthodox economic policies.

Brazil’s ambivalent stance on human rights and democracy under Lula goes hand in hand with its attitude toward nuclear proliferation. A signatory in the 1960’s of the Tlatelolco Treaty, which banned nuclear weapons from Latin America, Brazil dismantled its enrichment process and research facilities during the 1990’s and ratified the Nuclear Non-Proliferation Treaty in 1998.

Then, in May of this year, Lula teamed up with Turkey in proposing a deal with Iran on its nuclear program, which the latter nominally accepted but the rest of the world did not.

Whereas Brazil and Turkey claimed that the arrangement had been accepted by the US and Europe, the US called for – and got, with the support of Europe – new and stronger United Nations sanctions, which only Brazil and Turkey opposed.

Brazil is on the cusp of sustained growth, higher international stature, and consolidating its middle-class status. But, until it develops a mature foreign policy that matches its economic aspirations – a foreign policy based on principled leadership, not heedless Third World solidarity – its global influence will be constrained.

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