On October 6 Brazilians will go to the polls to elect a vast range of officials at all levels of government. The key issue, however, is who will be the country's next president. On the outcome of the race at the top of the ticket much depends--not just Brazil's future direction, but also the prospects for hemisphere-wide free trade agreement, not to mention the broader perception of Latin America by the international financial markets. Because Brazil is the world's eighth-largest economy, the impact of its potential departure from economic rationality and political stability cannot be underestimated.
To be sure, even at this relatively late date the election presents many imponderables--not merely who is likely to win the race, but what the outcome may mean in terms of concrete policies. The task of the analyst is made more difficult still by the fact that all of the candidates in the race advocate one sort of soft-populism or another, while at the same time some are attempting to reassure the business, banking, and investment communities at home and abroad.
Lula's Prospects
Let us begin with the obvious. If he fails to win outright on October 6, Luiz Inácio "Lula" da Silva, the candidate of the leftist Workers Party (PT) will certainly win the largest plurality of votes and therefore go into a run off scheduled for October 27, by coincidence Lula's fifty-eighth birthday. This will be Lula's fourth try for the presidency, presumably--if he loses--his last. This time, however, he benefits from a number of advantages he did not have in 1989, 1994, or 1998. The most important of these is that after eight years of moderately conservative government by President Fernando Henrique Cardoso, a nominal Social Democrat, the Brazilian electorate seems more willing to vote for a candidate from the Left--if not Lula, then a rival. The cumulative score of all left-leaning contenders has never fallen below 60 percent in the past, and this year is closer to 70. Some of this unquestionably is due to the recession into which Brazil plunged at the beginning of 1999, forcing a devaluation of the currency. Ironically, however, this election in some ways is a plebiscite on economic reforms that have only been proposed, not actually enacted, since during President Cardoso's second term most of his initiatives have been stalled in the Brazilian congress.
One might well ask why, if the generic score of the left in Brazil has been so high in past contests, have the people there failed to elect Lula before? The answer is that in the last three elections the center and the right have come together to support a common candidate. But this year the alliance between Cardoso's Brazilian Social Democratic Party (PSDB) and his former coalition partner, the conservative Liberal Front (PFL), has collapsed. More than that, former President José Sarney, leader of the PFL, has actively endorsed Lula for the presidency and loaned him a running mate in the person of José Alencar, a textile magnate who is also a senator from the state of Minas Gerais.[1]
In addition to a more favorable arrangement of party alliances, Lula also benefits from the fact that, after ten years of active participation by the Workers Party in democratic government in Brazil and in the administering of some states and municipalities, his movement is now seen by many Brazilians as a settled, establishment force that has mellowed and is no longer to be feared. (Lula's negatives, which have always been unusually high, have this year for the first time slipped below 50 percent.) One final advantage is the fact that unlike most Brazilian parties, which tend to be either groupings around a single individual or expressions of regional interests, the Workers Party has a truly national organization, counts on disciplined cadres, and possesses a genuine ideology.
To be sure, many Brazilians have not forgotten the positions Lula has taken in the recent past. During the nineties he opposed root and branch all Cardoso's economic reforms, particularly privatization of large utilities, questioned the validity of Brazil's external financial commitments, and manifested a generally unfavorable attitude toward global capitalism. He has suggested on more than one occasion that Brazil should attempt to create a new coalition of "have-not" countries, which would tie it to India, China, Russia, Iraq, and Iran. Even now he refers to the Free Trade Area for the Americas project as an attempt to "annex" Brazil and the rest of Latin America to the United States, and promises if elected he will "no longer allow the country to be an economic colony of the rich Western world." He makes no bones about the fact that his closest friends in the hemisphere are Fidel Castro and Hugo Chávez.
If many Brazilians seem unconcerned about the possibilities of a president of this type, the international financial markets see things rather differently. Since June the growing prospect of a Lula victory--either on the first or second round--has battered prices on the Brazilian stock markets, and caused foreign banks to lower the country's credit rating and hike its risk index. It has also precipitated a sharp drop in the value of the currency, so sharp in fact that in the same month Lula felt obliged to deny that he had any intention of making radical changes, at least for the moment. He also sent his party president, Congressman José Dirceu, to Washington and New York to assure investors that Lula will respect the country's outstanding obligations. But at the same time Dirceu could not help adding that a PT government "will mean a change of economic policy."
Other Candidates Battle One Another
Quite apart from the fact that he lacks charisma or telegenic qualities, the man Cardoso handpicked to be his successor, Health Minister José Serra, 60, has an almost impossible task. He must promise Brazilians both continuity and change--all at the same time. In some ways this should not have proven difficult. Most Brazilians have come to appreciate the relative financial stability of the last eight years and historically have shown themselves cautious about leaping into a void. An economist trained in the United States and Chile, Serra has also served as minister of planning and has shown a considerable grasp of the hard realities of day-to-day government.
On the other hand, given that the vast majority of the electorate is found somewhere left of center, he cannot help getting in a bidding war for the support of those who feel they have not benefited, or at least not benefited enough, from Cardoso's policies. His program is a wish list of uncosted promises, including a universal public health system; a fully public social security and pension system; high quality, publicly funded secondary schools; and plans to build 30,000 houses and raise the minimum wage. Indeed, its expansive terms have been so heavily criticized that in mid-summer Serra's staff was busily redrafting it.
If the race all these months had been a two-headed affair, pitting Serra against Lula, it is just possible that the government candidate could successfully exploit the predisposition of many Brazilians to vote for the devil they know. But the presidential race has been drastically altered by the presence of a third candidate, Ciro Gomes, 45. Scion of an old political family from the northeastern state of Ceara, Gomes entered politics at the tender age of twenty-five, winning election to his state's legislative assembly. Gomes has (rather typically for a Brazilian politician) spent time on almost all points of the political spectrum. He began his career with a right-wing party, quitting to join Cardoso's Social Democrats. In 1994 he became President Itamar Franco's finance minister, replacing Cardoso, who had resigned to run for the presidency. After Cardoso's first election he went off to Harvard on a Ford Foundation grant. Returning to Brazil in the mid-1990s, he found his route of ascent blocked by Cardoso's decision to alter the constitution and run for a second consecutive term, so he joined the Popular Socialist Party (PPS), a recycled version of the old Communist Party. As its presidential candidate in 1998, he received 10 percent of the vote. He is running again this year as the candidate of the so-called Labor Front, a coalition of former Communists, independent leftists, and a group of non-ideological (patronage-hungry) machine politicians.
Gomes has everything Serra does not--relative youth; the right to claim at least partial success of the Real Plan, which brought an end to hyperinflation in Brazil; and an attractive wife who, in addition to being a popular soap opera star, has won widespread admiration for her battle against breast cancer. He has also benefited from some polls that show that he could beat Lula in a hypothetical second round.
The one advantage Serra enjoys over Gomes is that, thanks to public financing of campaigns based on the performance of a given party in the last election, the Social Democrats have been allocated roughly twice the amount of money for television time as the Labor Front. And Serra has not been slow to make use of it, hiring the country's most talented political consultants and ad agencies to hit his rival--and hit him hard. One particularly telling spot shows Gomes telling an unfriendly questioner that he is an "idiot," followed by another in which the abused citizen announces he no longer plans to vote for Gomes. Gomes has hit back with ads of his own, taking Serra to task for his promises. For example, one of his ads makes fun of Serra's pledge to create eight million new jobs: "How can he accomplish in four years what he has failed to achieve in eight?"--a reference to Serra's ministerial activities in the Cardoso government.
In effect, the real excitement in the run-up to October 6 has been a no-holds-barred struggle for the right to face Lula in a hypothetical second round. This time instead of having to defend himself against charges of Marxist extremism or dark plans to turn Brazil into another Cuba, for most of the campaign season Lula has been able to stand aside, preaching "peace and love" while Serra and Gomes try to destroy each other. Among other things, this means that whoever wins the right to compete in the second round will have a tough time, to say the least, attracting the votes of those who voted for his defeated rival. For Lula it seems a "win-win" situation.
Indeed, there may not even be a second round this time. The latest poll (released on September 21), shows Lula steadily gaining; he now stands at 44 percent of the electorate, with Serra hovering between 17 and 19 percent and Gomes fading to 12 percent. This has caused Serra to suddenly switch targets and unleash a full-scale campaign against Lula, or rather, the "old" Lula from previous electoral cycles. He has also made much--perhaps too much--of the fact that Lula is by the standards of Brazil's elites a poorly educated man. This may or may not work; Lula's people are already claiming that Serra has belatedly borrowed a page from the playbook of Fernando Collor de Melo, who came out of nowhere to defeat Lula in 1989 but was subsequently discredited in a corruption scandal during his brief presidency. At the very least, this campaign is bound to leave bitter feelings on all sides, making Brazil difficult to govern regardless of who wins.
Implications of a Lula Victory
In some ways this election resembles the Chilean race of 1970, with a Marxist--in that case, Dr. Salvador Allende--facing a conservative, former President Jorge Alessandri, and Radomiro Tomic of the traditional centrist Christian Democrats, with the latter candidate staking out a position somewhat more radical even than Allende's. Throughout that campaign, Tomic spent most of his time abusing Alessandri rather than laying out his differences with Allende, which in fact were not very great. With the center and right deeply divided, the Marxist candidate was able to squeeze through with a plurality of 36 percent--less than two percent ahead of Alessandri. (The Chilean system did not then possess, as it does today, provision for a second round of voting.) The election was the prelude to three years of deepening polarization, near civil war, an exceptionally bloody military coup, and the end of Chilean democracy for nearly a full generation.
To be sure, 2002 is not 1970, and Brazil is not Chile. It is a very large, very complex, and very sophisticated society with deep-seated vested interests that, as President Cardoso himself has discovered, do not readily lend themselves to drastic transformations. Indeed, if elected, Lula's main problem may be how to govern at all given the unreasonable expectations he has raised among Brazil's poor. Like Venezuela's Chávez, he may discover that the collective strength of established interests--in the labor movement as well as the business community, the media, and the middle class, not to mention the armed forces--is far greater than he imagined. Moreover, unlike Venezuela, Brazil is not a relatively simple society rich in energy resources that provide its leaders with a built-in cushion for demagoguery and hair-brained experimentation. And despite all his oil revenues, even Chávez now seems to be discovering limits to his writ.
Lula's election--if it takes place--will be widely interpreted as a major setback to U.S. policy throughout the region. No doubt it would be. There would be no Brazilian support for the war on terror, for the campaign to eradicate drug trafficking, or for any of a dozen or so major U.S. foreign policy initiatives. On the other hand, on these and similar issues one could hardly expect a more cooperative attitude from Serra. With Lula, however, one can expect some dramatic confrontations. One can easily anticipate a very different kind of rhetoric coming out of Brasilia, at least in the early months, with unlovely pronouncements that make those of Germany's chancellor or Canada's prime minister seem relatively benevolent by comparison. Presumably Fidel Castro would be a big beneficiary of whatever resources Brazil can spare. A new axis of bombast and mediocrity--Brasilia-Caracas-Havana--might well come into being, at least for a time.
But the parlous consequences would be felt first and primarily in Brazil itself through a massive flight of liquid and human capital, quickly spreading to Brazil's immediate neighbors, with deleterious effects on investment flows from the United States and Europe. (The bankers and business tycoons who have been heedlessly pouring billions into Brazil over the past decade should not say they were not warned long in advance.)
Unlike the United States, Western Europe, or even parts of Latin America, Brazil has never had a "sixties" from which to recover. While Chile had Allende, Bolivia and Peru their "socialist" generals, Argentina its return of Peron, and Uruguay its urban guerrillas, Brazil languished under military rule from 1964 right up to the early 1980s. The country seems poised to pick up the threads cut at the outset of that period when President João Goulart was deposed and sent into exile, and along with him, thousands of radical young people (including Serra). To be sure, the world is a different place today, and it is by no means certain that Brazilian history can simply be resumed where things left off almost four decades ago. The essential point to grasp, however, is that Lula is not merely a political but a cultural phenomenon. Regardless of the outcome of these elections, he and what he represents will continue to shape politics in Latin America's largest, and by some constructions, most important country.
Notes
1. Emblematic of the contradiction here is the fact that when Alencar was introduced at the PT convention, many old-line militants booed him.
Mark Falcoff is a resident scholar at AEI.
