The end of the road for Lula?

    

Jonathan Power International Herald Tribune

THURSDAY, JANUARY 19, 2006
SÃO PAULO For the best part of 30 years, Luis Inácio Lula da Silva, now president of Brazil, was a rising star in the Brazilian firmament. From the days when he led the metalworkers of the car industry of São Paulo out on a strike against the military government, he has been a darling of the workers, the Catholic Church, and the liberals. In those early days, Chancellor Helmut Schmidt of Germany and Prime Minister Adolfo Suarez of Spain came to seek him out, partly to bolster his stature against the generals and partly to attempt to discern where mighty Brazil, then far ahead of China and India, might be heading.
 
I found him at the time living in a small worker's house in one of those less than awe-inspiring suburbs on the outskirts of this immense, smog-filled city. He was, as I discovered when interviewing him for the International Herald Tribune, wise beyond his years. At the age of 34 he dealt with my probing about the attractions of Marxism and violent revolution with intelligent disdain, and concluded by observing, "There is no point whatsoever in demanding unrealistic things. I think it is better to go forward one millimeter, but one down-to-earth millimeter, knowing that we won't have to go two millimeters backward later on."
 
Soon after, he was imprisoned for a time by the military, but as the regime liberalized he emerged as the leader of a fast-growing new political movement, the Workers' Party. Three years ago Lula finally won the presidency and his supporters believed the moment of pure, untarnished, selfless government had begun.
 
Brazil is the world's ninth economic power, but has the worst distribution of income among major developing nations. With Lula's rise to power, the poor thought they would finally find their reward. Announcing his "zero hunger" campaign, Lula - who grew up in destitution himself - promised that every family would be fed adequately every day.
 
But life in a major industrial power, with the capital markets watching one's very move, is never so straightforward. The day that Lula became president was the day he had to hang up the hat of his militant reforming zeal.
 
For 25 years, from the outside of the political establishment, Lula had been the major force for social change, bringing the pressure of his oratory, charismatic leadership and political muscle to bear on governments of various political hues. Gradually the income distribution of Brazil improved. Schools and health clinics were built in the poorer areas.
 
But in power Lula has become a different persona, to the anguish of many of his supporters. On the one hand, he has pursued economic and fiscal policies of the most conservative type. This has saved Brazil from going through another bout of skyrocketing inflation and loss of investor confidence. The economy is stable, exports are zooming, inflation is down and interest rates are falling. Economic growth is steady, at about 3 percent to 3.5 percent, although this is disappointing given the other benign factors.
 
Lula the social reformer has taken second place. His Bolsa Família program has extended cash transfers to millions of the poorest - as long as they send their children to school - but it is merely an upgraded version of a program begun by his predecessor, Fernando Henrique Cardoso.
 
Even more disillusioning is the fact that Lula's government has become immersed in two successive scandals, involving illegal contributions to the Workers' Party in return for favors and, worse, the buying of votes in Congress. Even if, as he claims, Lula wasn't involved in these shenanigans, he should have known, and perhaps did know, what his trusted chief of staff - who was forced to resign - was up to. This has lost Lula his important middle-class support and perhaps doomed his presidency.
 
A poll published this week shows that José Serra, now mayor of São Paulo, will beat Lula comfortably in October's presidential election. Serra, a close political ally of Cardoso and his former highly successful minister of health, is a policy wonk and a hard-driven, effective administrator.
 
Serra says he has the credibility with the international financial community that Lula had to earn the hard way. This, he told me, "will enable me to be less orthodox and to drive the rate of economic growth above 5 percent." He will also, he maintains, as he has in São Paulo, "cut out the enormous waste of Lula's maladministered government and get results that will immediately benefit poorer people".
 
Serra, also a political opponent of the generals who had to flee the country, is as progressive in his social thought as is Lula. The difference is that he could deliver what Lula has only promised.
 
(Jonathan Power is a freelance writer on foreign affairs.)