Brazilian elections - The perspectives for a PT government

In a week's time the second round of the Brazilian elections are to be held. In the first round Lula, the candidate of the PT came first by a large margin and looks set to win the second round. In this article Dario Castro analyses the results of the first round and looks at the situation a PT government will be facing, with the mounting debt and the huge pressure it would face both from the bourgeois on the one side and the workers on the other.

The first round of the elections was held in Brazil on October 6. The President of the Republic, the members of the national and state (regional) assemblies were up for re-election. There was also a partial election of the Senate. The most important of course were the Presidential elections where the PT, led by Lula, scored a historical victory and the candidate of the government, Jose Serra, went down to a major defeat. The two will now be standing against each other in the second round, which will be held three weeks after the first. It is highly likely that Lula will get an even bigger majority in the second round.

The Spanish (and international) bourgeois press have shamefacedly attempted to play down what has actually been a spectacular shift to the left. One example was the following: "For the fourth consecutive time Lula has failed to win the first round of the elections." But the figures are there for anyone who wants to see them. The PT candidate received 39.4 million votes (46.4%), twice as many as Jose Serra, who received 19.6 million votes (23.2%).

The shift to the left in Brazilian society is even more marked if we take into account the fact that the third and fourth placed candidates, Garotinho (17.9%) and Ciro Gomez (12%), mounted a campaign, in words at least, in many ways to the left of Lula. Together, these two candidates got 25 million votes. Thus the total number of left votes cast in opposition to the government of Fernando Enrique Cardoso was 70% of the total.

This result shows that there is a burning desire for change among the overwhelming majority of Brazilians, and it marks the end of an era. People are completely fed up with the policies of privatisation and cuts in social spending that have led to a worsening of the miserable living conditions without in any way solving the structural problems of the Brazilian economy such as the huge foreign debt.

The elections have highlighted the deep political crisis the ruling class has entered into. This is due to its inability to offer any way out of the disastrous economic and social paralysis facing the country. The degree to which the bourgeois parties have been discredited is quite clear from the results.

When Cardoso became president in 1994 these parties plundered the state coffers as if there were no end to the party. Even Serra has tried to distance himself from the present government in an attempt to avoid the inevitable: i.e. an absolute electoral disaster.

One needs to analyse the Brazilian elections within the context of the Latin American and world situation. Throughout Latin America we have seen the masses, in one country after another, reject the capitalist model of society. The victory of the PT expresses on the electoral front, the same determination of the masses to change things as we have seen in Argentina and Venezuela (the two most significant examples). In these two countries the process has been far more violent, but it is all part of the same process, albeit at different tempos.

The PT in Brazil was born out of the struggles of the working class in the industrial belt of Sao Paulo against the dictatorship in the 1970s. The fact that such a party exists in Brazil, in spite of all the attempts of its leaders to water down the programme and make it acceptable to the bourgeois, means that it is seen clearly by the overwhelming majority of the masses as a left alternative. That explains why in this initial stage of the process all the anger of the masses has been channelled through the electoral front. We have seen this process repeated many times over in history. To change things through the electoral road seems more practical and easier than direct participation in the struggle. But experience will show that this is not enough, that it is necessary to go beyond the electoral front. However, for now, the presidential elections are seen as a serious opportunity to change things and not merely as a routine succession of parties at the top.

The victory of the left is part of the same process that the whole of Latin America is going through. At the same time it is also a powerful stimulus for the workers of the whole continent. Inside Brazil itself, a PT government would mark the prelude to the reawakening of the mass movement. Joao Pedro Stedile, leader of the MST (movement of the landless peasants) expressed this same idea, in an interview shortly before the elections:

"A Lula victory would have a symbolic value that would lead to the reawakening of the mass movement. The Lula campaign is saying this to the people: Vote Lula; Lula's day has come. Very well, we will vote Lula. But as of January the Brazilian people will say: our day has come and then social mobilisation will begin, in which the Sim Terra (Landless) and the public sector workers will struggle for the changes that Brazil needs." (El Pais, October 5, 2002)

The PT campaign

During the election campaign the PT leadership has turned even more towards a classical social democratic position, something they had been pushing for some time. This also is nothing new. We have seen this kind of thing take place in many parties that in the past had a very leftist sounding phraseology but never actually adopted Marxist. As the leaders of these parties get closer to taking office they suddenly develop a strange feeling in their stomachs, a feeling that is also common to the bourgeoisie itself. The bourgeois develops this feeling as it senses that the workers' party is about to achieve a massive victory and it understands the dangers that this poses for its own rule. The main emphasis of the PT campaign has been to minimise the idea that a Lula victory could in any way imply a deep transformation of society. This has two aims in mind. On the one hand it is aimed at making the party more "acceptable" to different layers of the ruling class. At the same time it is an attempt to stop the workers and peasants from drawing dangerous conclusions, i.e. that an electoral victory opens the road to their taking into their own hands tasks such as land reform and the renationalisation of the privatised companies, etc. With this aim in mind, Lula formed a coalition with, and chose as his candidate for vice-president, a big capitalist from the textile industry and a member of the Liberal Party, a party which has hardly any social or electoral base.

What has this coalition added to Lula's strength? Absolutely nothing. It does have a role, however. If Lula's victory were to be achieved without an alliance with bourgeois parties then it would be more difficult to justify a policy of social contract with a wing of the bourgeoisie. A victory without these parties would have clearly demonstrated both the weakness of the Brazilian bourgeoisie and the enormous strength and weight of the Brazilian working class. In spite of these attempts to hide the real situation, the latest elections have clearly confirmed this anyway. The fact that the Brazilian ruling class is forced to govern through a workers' party is an indication of its weakness. It is an indication of its own lack of support among the population and of the fact that it can no longer continue to fool the masses through its own political parties and leaders.

The fact that the PT could win the presidential elections was already evident a few years ago. An anticipation of what is happening today could be seen in the 2000 municipal elections. The weakening of the parties in government was clear to all and there was a general feeling that the "neo-liberal" road of the government had led the country up a blind alley. In this context, some sections of the bourgeoisie (including some "heavyweights" within the oligarchy, such as the ex-presidents Jose Sarney and Itamar Franco), decided that the best option was to abandon ship before it sank. And after having weighed up the various options they decided that the best one was to "support" Lula. It is quite clear that this kind of "support" is in actual fact a way of making sure the PT keeps to a moderate line and at the same time it allows the bourgeois to control the masses indirectly through a workers' party. Their plan is to use the party now and throw it away later. They plan to use the authority of the PT to do their dirty work for them, and once this has discredited the PT they can then blame the left for all the past, present and future ills of Brazil.

All this, however, only serves to underline the huge political crisis the Brazilian ruling class is in. It has very little room for manoeuvre, and even this is only thanks to the concessions that the PT leadership is prepared to make.

As everyone was clearly expecting a PT victory, and with the present level of social unrest, any attempt at vote rigging would probably have had the opposite effect to that which the ruling class would have desired. Rigging the vote would have been perfectly possible with the new electronic voting system that has been introduced, as there is no possibility of physically checking the votes cast. The programme that runs the system is kept secret and is under the control of the Brazilian 'Inteligencia', a body which was set up by the past military regime. There was no fraud (or at least no big fraud), but it is still an ace that they have up their sleeves for the future.

The economic situation

The second round is going to be even more complicated for the right wing. The most likely outcome is that all of the left vote will be concentrated on Lula. Serra will find it very difficult to increase his overall number of votes. Now he has announced that in the second round he will present himself as the man of the present government and this will prepare an even bigger defeat for him.

Lula will become president as of January 1. Between now and January a lot can happen in Brazil, especially in the economy. In spite of the fact that the IMF is trying to avoid worsening the situation, it cannot be ruled out that the underlying economic crisis could turn into a crash. As this article is being written the exchange rate of the Real to the dollar has reached the record level of 3.9. The much quoted "nervousness of the markets" is not only due to the political situation but also to the economic paralysis facing the country and the general international economic crisis.

When Argentina's economy collapsed, the Brazilian and international economic strategists hurried to reassure everyone that "Brazil is different", that there was "no danger of contagion" and so on. Now events are showing that this is false, as we predicted at the time. The Brazilian economy has not only been hit by the fall in exports to Argentina (8% of the total), but also by similar contradictions to those facing Argentina and which have brought the economy to the edge of the abyss. It is true that in Argentina the currency had been pegged to the dollar whereas the Brazilian Real was not. But that is not the end of the story. In Brazil, in order to stop capital from fleeing abroad, the interest rate is 18%, one of the highest in the world. And a large part of the debt, both national and foreign is denominated in dollars. Therefore every time the Real falls there is a proportional increase in the debt. The debt, both in absolute and relative terms, is bigger than what it was in Argentina before the collapse. There has also been a sharp fall in loans and foreign direct investment as a result of the general decline in the world economy. Since the beginning of the year there has been a fall in Brazil's industrial production and this downward spiral has not yet reached its limit.

The economy is extremely volatile. At the end of July panic gripped the so-called world of finance. In just one month the Real had been devalued by 22% and a total of 5.3 billion euros had been withdrawn from investment funds, bringing the total for the year to 14 billion euros. In August private sector indebtedness to foreign lenders had reached 1.7 billion dollars and El Pais commented that "it is becoming practically impossible for these companies to renegotiate terms and conditions". Rumours that Brazil might be about to default on its servicing of the foreign debt were spreading like wildfire. In an attempt to avoid an even worse scenario the IMF finally decided to grant Brazil a new loan of 30 billion dollars. But only 6 billion will be released this year; the remaining 24 billion will be released next year and are strictly linked to very tight fiscal targets that will be reviewed on a quarterly basis. The recent IMF loan to Brazil had two aims: to stop Brazil sliding down the same slippery slope as Argentina and at the same time to condition the economic and social policies of a future PT government. Even Cardoso himself had to admit in a recent official gathering that Brazil "has nothing left to squeeze" (El Pais, August 11, 2002). In the same article the author added, "It is difficult to imagine that the successor to the present government will voluntarily accept a much tighter fiscal policy than that which already exists."

The nature of the PT government

This is the situation that the Lula government will inherit. The pressures of imperialism and the bourgeoisie on the one side, and those of the workers and poor on the other, will be enormous and will play a decisive role in determining the nature of the PT government.

In general the 1990s were a decade of retreat on the part of the labour movement, especially if we compare it to that of the 1980s when there was a massive wave of strikes. Over the last few years it was the MST, the powerful organisation of the landless peasants, that kept alive the flame of the class struggle. Over the same period, in the context of growing unemployment and casualisation of labour, and with the shift to the right of the leaders of the PT and the CUT, the labour movement was maintaining a low profile. Even the recent general strike in March 2001 against the attacks on workers rights did not get the same support all over the country thanks to the lack of serious organisation on the part of the leaders of the CUT. We have seen this phenomenon before. When the workers see no way out on the trade union front they turn to the electoral and political front. That is what is happening in Brazil now.

These elections mark the beginning of a new stage in the class struggle. Inevitably there will be an initial period of illusions on the part of the workers. "We cannot sort out in a couple of days what has been ruined over such a long period of time"; "One must be patient"; "We have to take care not to break the alliances that have allowed us to come to power". This way of thinking will have an effect on the people of Brazil for a period. It is difficult to foresee how long this honeymoon between the masses and the government will last. There could even be a movement of the workers thinking they need to "help" the government in its conflict with the more reactionary layers of society.

Whichever will be the case, the coming to power of a PT government coincides with a deep crisis of capitalism on a national and international scale. This means that there will be no room for reformist policies based on a social contract. In which direction will a Lula government go? Largely, this will be determined by the class struggle in Brazil, the political situation throughout Latin America and by the crisis of world capitalism.

What is clear is that Lula will not be able to serve two masters at the same time. His initial plan is to build a big social contract "to take Brazil forward". But he will face his first problems immediately after taking office. How will he deal with the payment of the foreign debt? How will he deal with national and international financial speculation? What will he do when his plans to revive the Mercosur come into conflict with the plans of US imperialism? What will he do when the foreign investors abandon Brazil? In theory his idea is to reach agreement with everyone: imperialism, the bourgeoisie, the landlords, the workers, the peasants, the middle classes… but this is impossible. He may possibly end up applying a similar policy to that of the previous government. But the nature of the PT, its social base, has nothing to do with that of the bourgeois parties. There is a clear link between the CUT, the MST and the PT. Adopting a policy of confrontation with the masses would provoke a severe internal crisis of the PT, the results of which are difficult to predict. Could this government turn to the left under the enormous pressure of the masses faced with a severe economic crisis? This cannot be ruled out. This turn to the left could even be dressed up in a confused, left nationalist rhetoric. Such a government, in conflict with imperialism and the oligarchy, could become a point of reference for the workers in their struggle to transform society and it would definitely become an incentive to struggle on the part of the masses.

Whichever of these two roads is taken we must stress the need for a Marxist programme to put an end to the power of the capitalists in Brazil. It is necessary to draw the lessons from the experience of the Allende government in Chile. Without a revolutionary programme, a programme of workers' power with democratic workers' control and management of the factories, the banks and the land, together with socialist economic planning, the capitalists could regain firm control of the situation. This is what is beginning to happen in Venezuela.

Whichever direction the process takes place, one thing is certain: Brazil, the biggest country in Latin America, with its powerful labour and peasant movements, has taken its first big step. It is about to add its enormous weight to the revolutionary wave that has been moving from one country after another in the whole of Latin America.