BRAZIL: LULA STUCK IN NEOLIBERAL TRAP

By Joao Pedro Stedile and - - Reprint | | Print |

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SAO PAULO, Sep 1 2004 (IPS) - The government of Luiz Inacio Lula da Silva has been in power almost two years old now, and yet, intimidated by threats of speculation and every sort of blackmail, it has lamentably maintained an economic policy based on the same neoliberal precepts subscribed to by the previous government, writes Joao Pedro Stedile, national co-ordinator of the Movement of the Landless (MST) and a leader of Via Campesina. In this analysis, Stedile writes that the government\’s priority is the performance of financial capital, to which it transfers the nation\’s savings by running the budget surpluses advised by the International Monetary Fund in order to make payments on its debt. The results are predictable. The economy grew but there was no improvement in employment and education or in land and income distribution. The problem is that Brazil desperately needs to hold a debate on the creation of a new development plan. As long as there is no such plan for national development, the Lula administration will shuttle between growth and crisis, formulating short-term measures that time will quickly sweep away.

The government of Luiz Inacio Lula da Silva has been in power almost two years old now, and yet, intimidated by threats of speculation and every sort of blackmail, it has lamentably maintained an economic policy based on the same neoliberal precepts subscribed to by the previous government. In other words, its priority is the performance of financial capital, to which it transfers the nation’s savings by running the budget surpluses advised by the International Monetary Fund in order to make payments on its debt.

The results are predictable. The economy grew but there was no improvement in employment and education or in land and income distribution. The problem is that Brazil desperately needs to hold a debate on the creation of a new development plan. In effect, the country has been stuck in the same crisis since 1980 — a crisis of plans, a crisis of destiny. This is the sense of the historic moment we are living in.

Brazil is a young country. It was born under the mantle of the colonial expansion of commercial capitalism, which for 400 years imposed on the country an agro-export model based on slave labour. With its crisis, the bourgeois revolution came late, in 1930, ushering in a new economic model of dependent industrialisation — dependent on foreign capital and directed towards the tiny domestic market, which comprised no more than 15 percent of the population. Even so, this served as a model for national development and in only 50 years brought about the transformation of a rural country into an urban one, and an agrarian economy into an industrialised one.

Brazil’s social wounds remained open, however, because the new structure of production was based on a concentration of land and profits. In the 1980s, these limitations eventually triggered another crisis. Afterwards, the military dictatorship fell and opened the way to the restoration of electoral democracy –though not to a social democracy.

In response to this crisis, there was a flurry of plans in 1989 during the electoral campaign disputed among Lula and his rightist rival Collor de Melo, who emerged as the winner. Consequently, the popular plan that was formulated as the alternative model lost. As a result, the ruling classes abandoned the idea of a national plan and submitted meekly to the transnational corporations and the yoke of international financial capital, which introduced neoliberal policies into Brazil and the rest of Latin America.

This process took a very heavy toll. In the 1990s, the subcontinent sent the First World no less than 1 trillion dollars in the form of interest payments, amortisation of foreign debt, remittances of profits of foreign companies working in Brazil, and payments for royalties and services. Another 900 billion dollars flooded out of the country into private accounts of the local bourgeoisie in the First World.

Not even in the colonial era was so much wealth transferred to another region. All social indices fell. The people suffered financially and bodily and, after a decade of neoliberalism, voted against the neoliberal candidates.

It was in this context that Lula was elected president, in a vote against neoliberalism but without any debate of an alternative plan for national development.

In mid-September the Semco Foundation, a group of progressive entrepreneurs, brought together about fifty representatives from various segments of society to discuss these issues and the future of Brazil. During a three-day retreat, we attempted to identify the DNA of our country, raising questions like, What is our vocation? What is the best path to national development?

Despite the natural, and necessary, ideological plurality and the very different life experiences of the participants, there emerged consensus on certain matters. Brazil is a rich country with immense natural, economic, and social potential, but it is also unequal and unjust. How can it be made more socially just? Everyone agreed that the first step must be income distribution and education: access to education, wealth, and land must be democratised, and work must be guaranteed to the entire population.

The question is how to make this happen. Less than a proposal, what is called for above is the right of the Brazilian people. Here the need for a national plan became clear. It must be created with the participation of the people in collective effort that brings minds and hearts together around the same goal.

This should be Brazil’s number one priority, for as long as there is no such plan for national development, the Lula administration will shuttle between growth and crisis, formulating short-term measures that time will quickly sweep away. (END/COPYRIGHT IPS)