What About Lula? Why Brazil's Economic Mess Isn't All Dilma's Fault
Lula da Silva spent liberally when the Brazilian economy was booming, leaving Dilma Rousseff to face the deferred impact of the global recession. His personal popularity aside, the country's current woes are largely his fault.
Whatever the exact figures, the March 15 protests in Brazil were among the biggest in its history. There were anti-government demonstrations in no fewer than 65 cities and 17 states. Those not protesting presumably included the 40 million Brazilians who receive "Bolsa Familia"benefits — about $35 a month for every member of a poor household — which previous President Luiz Inácio Lula da Silva boasted had ended poverty.
His tenure was marked by prosperity and easy money, neither of which describe today's Brazil. Lula's strategy was to give fish to the poor, without bothering to teach them how to make their own catches. The annual cost of this subsidy is around $11.5 billion. What would happen if the government of President Dilma Rousseff were to start making cuts there? Best not to think about it. The government has committed for now not to touch those benefits even though money is not something it can simply print at will, as Lula's successor and precarious election victor is discovering.
What would Lula say? Almost two years ago, at the time of the 2013 protests, Lula wrote a piece in The New York Times offering his support for the protests and saying the country needed major political reforms. These would be the reforms he had not undertaken as president, when he enjoyed throwing money around and keeping his party's voters. Yet in 2013, he gave his blessing to all the young people demanding cleaner, more transparent institutions.
Today, the young and not so young are making some very specific demands in their protests. They are calling not just for Rousseff to go but also the Workers' Party that Lula founded. Some protesters even carried placards calling for a return of the military. All protesters are demanding punishment for those responsible in the Petrobras scandal, in which it is estimated that some $4 billion was siphoned off to pay the Workers' Party and opposition politicians.
The Petrobras case has overshadowed the 2005 "mensalão" scandal, in which the Lula administration was accused of buying congressional votes. That led to the conviction of José Dirceu, Lula's right-hand man and cabinet chief, and several other senior Workers' Party officials. But nothing happened to Lula, and he's not facing any heat now with Petrobras or in the protests, even though he was president when all this began.
March 15 anti-government protest in Rio — Photo: Fabio Teixeira/Pacific Press/ZUMA
"The thing is, in Brazil they see Lula like some kind of god who never does anything wrong," a Brazilian colleague told me.
Yet they vent their fury on Rousseff, the president fighting corruption and paying the price for the fact that money was spent in such a frivolous, irresponsible manner during the good times. Lula was regarded as some kind of a miracle worker, and Rousseff is left with the bill: rising inflation, tax hikes, gasoline and electricity bills, cutbacks, a stagnating GDP, an imminent trade deficit and a more expensive dollar.
People are protesting, refusing to accept that the problems are caused from outside the country. There is an element of truth to this: The demand bonanza came from abroad, until it stopped coming. The problem is that measures weren't taken in time to anticipate a recession.
Since people weren't told the truth in "good times," but were instead promised World Cups and Olympic Games and told they had the world's biggest oil reserves, they're not buying now the idea that problems are coming from elsewhere.
They've not yet realized what Lula's share of the responsibility is, and that he certainly was not the god he had the Brazilians and many others believe.