Will Lula's Downfall Kill Social Democracy in Brazil?
Lula da Silva needed the backing of big business interests to continue in politics, and his recent conviction shows they may have turned their back on his social-democratic model.
One of the many sayings attributed to the former, now-jailed, Brazilian president Luis Inacio Lula da Silva shows his eminent pragmatism and the political stance that ultimately characterized the two governments he led: "If you know a very old member of the left, it's because he must be having problems," he said. "People change halfway along the way... those firmly on the right, and on the left, tend to move toward the center."
Now facing a long prison term, the longtime head of the Workers' Party PT must be suffering less from that predicament than the frustration of having failed to convince the establishment that he could be the leader to rescue Brazil and recover its former rates of economic growth. Lula appears convinced that the major economic players that had decided he must be removed had manipulated the judiciary into acting against him. He had long repeated in private how strong the economy was during his two mandates, where some 34 million Brazilians joined the consumer middle class during his time in office.
Those were the arguments he'd already used as he tried to save the government of his successor, Dilma Rousseff, when the country's growth began faltering year after year. After her difficult reelection in 2014, it was Lula who pressed for a shift toward pragmatism, just as he had imposed on his governments free-market minded figures to head the Economy Ministry and the Central Bank, the latter still acting as Finance Minister Henrique Meirelles.
The PT had become a medley of opposing tendencies
Like a magic trick, Lula picked the orthodox economist Joaquim Levi, a campaign adviser to Rousseff's electoral rival Aecio Neves, to place him in her cabinet in a bitter political moment, and implement policy rectifications against the clock. But Rousseff's declining standing and credibility prevented this progress while the PT had itself become a medley of opposing tendencies, corruption crises and had lost its ideological direction.
In addition, and not without a dose of cynicism, Brazil's legislature opposed these adjustment, robbing the executive branch of its initiative. The former president then boldly came forward to become Dilma's cabinet chief —or prime minister — which would effectively put him in charge of running the country and especially its economy. He failed in that bid.
Big business and finance in Sao Paulo, which Lula had worked hard to seduce during his governments, were now spurning him. A hardline sector of this powerful segment of society saw an opportunity to strike hard at the PT and its social-democratic ways, and advance the model of wealth concentration that is imposing itself around the world, with certain authoritarian, if not militaristic overtones. Parliament's sacking of President Rousseff was part of that strategy. She was impeached without any charges against her except the minuscule political power she was wielding against a big crisis.
The country pursued its downfall, and economy shrank almost 10% in three years, which is an exceptional loss of wealth. The experiment continued with Dilma's successor, the former vice-president and historical PT ally, President Michel Temer, who represented hopes of changes from above. Some corrective measures were taken and expenditures curbed, and Temer did this with parliament's backing in contrast with his predecessor, in spite of cabinet splits in horse-trading in both legislative chambers. Yet he had minimal public backing for undertaking this necessary economic surgery.
Lula had a wide lead in polls ahead of the upcoming presidential elections scheduled for October 2018. Beyond the campaign speeches, there was little doubt that his Economy Minister would still be Meirelles, and that the former trade unionist would pursue Temer's adjustment policies. But Lula failed to convince the big money interests whom he needed as allies. Jail is the reply he has received for his proposal to continue adjustments and spending controls.
There is a paradox at the end of the day. Lula is the only centrist politician in Brazil with some power in a country where people's trust in politicians has plummeted. The PT should not take comfort from this, since this dissolution has clearly hurt the party and its leadership, which is aware of the relative backing the former president had won in Sao Paulo. Lula will have a lot to think about in jail — but others will too.