President
Luiz Inácio Lula de Silva, known popularly as “Lula”, was elected president in October of 2002, taking office in January 2003. His victory was the first for the left in Brazil in some 40 years. Lula had little formal education as he was raised in abject poverty and eventually found employment as a metal worker as a teen. By the 1970s he had become active in the 100,000 strong Metal Workers Union, and was elected their president in 1975. Brazil was under a military regime during these years, and Lula was even jailed for a short time for his union activities. In 1980 Lula was one of the founders of the Workers Party (PT), under whose banner he ran for president. Lula campaigned on prioritizing pro-poor policies and bringing grassroots organizations into the decision making process, as well as rooting out corruption.
Economic and Political Background
Like the rest of the region, Brazil experienced a long period of stagnant growth throughout the 80s and 90s. From 1980-2000 Brazil’s per-capita GDP grew by a total of just 8 percent, in contrast to the 20 previous years that saw 123 percent growth in per-capita GDP.[i] In addition Brazil has one of the most unequal distributions of wealth in the hemisphere. A key contributor to this lack of growth has been extremely high interest rates, which has made credit expensive and has pushed up the value of the currency. These policies are a result of an over-emphasis on inflation targeting, long a stalwart of the IMF’s economic policies.
Although promising a new direction for economic policies in Brazil, during much of Lula’s first term in office he followed the neoliberal agenda of his predecessors, and the stagnant growth continued. When Lula became president the country was in the midst of an IMF agreement, but he slowly moved further and further away from the Fund. By 2005 Brazil decided not to renew its agreement with the Fund for the first time in six years, and by December of 2005 had paid of its $15.6 billion debt to the Fund entirely. Brazil now has a record $200 billion in international reserves.
Although interest rates remain comparatively high, Brazil has recently had a period of sustained growth. Per capita GDP increased nearly 17% between 2004 and 2009. In addition, Brazil has implemented policies aimed at reducing poverty and increasing social spending; the most well known of which is the “Bolsa Familia” (Family Grant) program. This is a cash transfer program where families get cash with specific conditions attached, such as putting their children in school, going to health clinics and receiving immunizations. More recently the government has started the “Minha Casa, Minha Vida” (My Home, My Life) project. The $18 billion program aims to build at least a million homes for low-income families.
Independent Foreign Policy
Although Lula only slowly moved away from neoliberal economic policies, he was quick to show an independent foreign policy stance. At the meeting of the World Trade Organization (WTO) in Cancun in 2003, Brazil was a leader against making more concessions to rich countries before they in turn made cuts to their agricultural subsidies. Two months later, Brazil was also a key vocal critic of the proposed Free Trade Area of the Americas (FTAA); the FTAA was ultimately and resoundingly rejected at the Mar del Plata Summit of the Americas in 2005. Lula’s government has also generally supported the government of Hugo Chávez in Venezuela, and denounced attempts at isolating the country in the region.
During the Honduran coup last year Brazil played a key role in defending democracy and standing up for ousted President Manuel Zelaya. Brazil was one of the fiercest critics of the coup d’etat, and denounced human rights violations perpetrated by the coup regime. The Brazilian embassy in Honduras gave refuge to President Zelaya when he returned to Honduras and Brazil has continued to forgo recognition of the Honduran government without conditions.
Lula has also recently been one of the most outspoken critics of the U.S.’ campaign to impose sanctions on Iran over its nuclear program. Lula has defended Iran’s right to a peaceful nuclear energy program, and pointed out that harsh sanctions could hasten a military conflict such as occurred with Iraq.
The Landless Workers’ Movement
With over 1.5 million people, the Landless Workers’ Movement (MST in Portuguese) is Latin America’s largest social movement. . The MST works to carry out land reform by peacefully occupying unused land and building cooperatives, housing, schools and farms. In Brazil, as noted above, income inequality is extremely high and as of 2007 60 percent of the best farmland was held by just 3.5 percent of landholders, with just one percent going to the poorest 40 percent. The MST has often been met with repression and outright violence from both the authorities and private landholders. The MST has had a close relationship with Lula’s party, the PT, however in recent years the MST has spoken out about issues such as the effects of ethanol production on deforestation and the environment, even though ethanol production is strongly promoted by the Brazilian government.
Participatory Budgeting
The participatory budgeting process was initiated in the Brazilian city of Porto Alegre in 1989 has been extended throughout many cities in the country and the region. The process allows communities and individuals to have a direct say in the allocation of funds. In addition to prioritizing allocations, the budgeting assemblies propose future government projects and elect delegates and councilpersons to work on the issues that are set forth.
Deforestation, Climate Change and the Amazon
As Brazil is home to the most of the Amazon rainforest, the country plays a unique role in the global climate change debate. The Amazonian rainforest is home to 1 out of 10 of the species on earth and produces an estimated 20 percent of the earth’s oxygen. Deforestation, however, has been a long-term problem for Brazil. Driven by commercial interests and often poor enforcement by authorities, the deforestation of the Amazon could lead to an ecological disaster. An increase in soy crops and cattle farming has been one of the largest causes of deforestation in the Amazon. Recently, however, the government has had some notable successes.
Prior to the Copenhagen climate summit, Brazil announced that between August 2008 and July 2009 deforestation dropped by some 45 percent, the largest drop in 20 years. This has been a positive side effect of the economic crisis, which certainly played a role in the reduction. However deforestation has been steadily declining for the past five years, due in part to recent government action. Starting in 2008 the government increased its policing of illegal logging and cracked down on those contributing to illegal deforestation. In addition, a long-term program, “Operation Green Arch” was recently implemented. The program supports the increase in police and federal agents tasked with monitoring deforestation, but combines those efforts with social assistance programs.
Resources:
Online:
Mark Weisbrot, “Brazil’s Differences With Washington Are Unavoidable, And Positive,” Folha de São Paulo, November 28, 2009. Republished by the Center for Economic and Policy Research.
Books:
Lula of Brazil: The Story So Far
By Richard Bourne. University of California Press: 2009.
Film:
“Beyond Elections: Redefining Democracy in the Americas”
[i] Mark Weisbrot and Luis Sandoval, “Brazil’s Presidential Election: Background on Economic Issues.” Center for Economic and Policy Research. September 2006. Accessed April 22, 2010.
