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CIAO DATE: 04/03
Brazil Alert: Much at Stake for United States as Brazil Prepares for Elections
Michael Wilson *
Hemisphere Focus: 2001-2002
August 14, 2002
Overview
With their unprecedented fifth World Cup championship safely tucked away, Brazilians have turned their attention and emotions toward the political field of play, namely the fast-approaching general elections to choose a new president, and new governors, federal deputies, and local officials across the country. The vote, which will be held on October 6, almost certainly followed by runoffs on November 15, is an important milestone in the continued advancement of freedom and democracy in Latin America. It is important to remember that this round of elections marks only the fourth time that Brazilians have been eligible to choose their president via the popular vote since Brazil’s return to civilian government in the mid-1980s. More than anything, these elections will serve as an important referendum on the continuation of neoliberal economic reforms initiated, but hardly completed, during the presidency of Fernando Henrique Cardoso (1995-2002).
Given the high stakes of the election, the Bush administration and policymakers on Capitol Hill should pay close attention to developments in Brazil and begin to treat this regional power with the importance it deserves. Brazil is a nation of 175 million people and commands the world’s eighth-largest economy. It is a key ally in the war on drugs and terrorism and is increasingly playing a leading diplomatic role on the world stage. Possibly most important to the United States, Brazil has the potential to become a major trading partner and will weigh heavily on future prospects of creating a Free Trade Area of the Americas (FTAA) by the end of 2005, the Bush administration’s top foreign policy priority for Latin America and the Caribbean.
Economic and political freedoms in Brazil cannot be taken lightly. One only needs to look at Argentina, Colombia, Paraguay, and Venezuela to see how democratic systems can come under siege. In recent years, Latin America has seen the rising threat of populism, as embodied in the regime of Hugo Chávez in Venezuela. The region is also increasingly plagued by corruption, narcoterrorism, and embattled democratic institutions. Fortunately, Brazil has stayed the course and managed to distance itself from many of the political and security problems sweeping the region. This could change depending on the outcome of the vote.
The Campaign Heats Up
The electoral campaign, which officially got underway in July, has already provided a number of surprises. Until recently, most experts agreed that the race would come down to a contest between José Serra of Cardoso’s governing Brazilian Social Democratic Party (PSDB) and the leftist Worker’s Party (PT) standard bearer, Luis Inácio “Lula” da Silva, a firebrand labor leader who is desperately trying to moderate his image in what could be his last attempt at the presidency (he has failed in three previous runs). Serra, however, has not been able to excite the electorate and has helped shatter the governing coalition that Cardoso so adeptly created and nourished in order to remain in power.
Enter Ciro Gomes, a former PSDB governor of the northeastern state of Ceará and a one-time finance minister. Gomes, who managed to secure a respectable 11 percent of the vote for president in 1998, has now switched allegiances and aligned himself with the Popular Socialist Party (PPS), where he is running under the banner of the center-left Frente Trabalhista (Worker’s Front) coalition. To the surprise of many, a poll published on July 23 by the Ibope Institute showed Gomes leapfrogging into a solid second-place position with 27 percent of voter intentions, as compared to 13 percent for the slumping Serra. Some polls show Gomes technically tied with Lula, with momentum tracking in his favor. Rounding out the four main candidates is Anthony Garotinho, the incumbent Brazilian Socialist Party (PSB) governor of the state of Rio de Janeiro, with 11 percent of voter intention. Of particular interest is that the poll shows Gomes defeating Lula in a runoff election (47 percent to 40 percent).
Missing from the picture is the center-right Liberal Front Party (PFL), which withdrew from the race following a financial scandal allegedly involving its candidate, Roseana Sarney, then the governor of the rural northeastern state of Maranhão. Prior to Sarney’s resignation, many observers of Brazilian politics felt that she would be competitive in the elections and have the best chance of continuing the free-market programs launched under Cardoso. She was also a fresh new face who many thought would represent change and modernity, despite the fact that she is the daughter of former president and political boss José Sarney.
Furious with what they viewed as an underhanded effort to destroy Sarney’s candidacy, the PFL leadership withdrew its support from the governing coalition. They blame the Serra camp for “staging” the raid on her husband’s office where “illegal” campaign funds were allegedly discovered. Sarney’s withdrawal has forced many PFL leaders into the uncomfortable position of either supporting Gomes and returning to the Serra camp if a runoff is held against Lula, or sitting out the vote as has some have threatened to do. For now, the vast majority of the PFL leadership is backing Gomes, despite clear philosophical and ideological differences. The PFL will also continue to field its own congressional, gubernatorial, and municipal candidates, and could prove to be the true power brokers following the elections. Regardless of who wins the presidency, the PFL should retain the largest voting bloc in the National Assembly, and will significantly counterbalance any efforts to turn back the clock on market initiatives.
The Lula Threat
Brazil’s traditional center and center-left parties are weak and tend to serve as vehicles for personalities, rather than broadly supported ideological or issue-based platforms. This plays to Lula’s advantage. Of Brazil’s numerous political parties, only the PFL (which is not fielding a candidate) and the PT have the kind of strong party discipline, nationwide organization, and ideological backbone characteristic of parties in mature democracies. Consequently, governments in Brazil have been forced to form what are more often than not unwieldy coalitions of divergent visions for the country. That has certainly been the case under both Cardoso administrations. The result: internal disagreement over policy matters, paralyzed leadership, poorly articulated programs, and stalled government initiatives in congress.
Given the candidates and the parties they represent, one would think that nothing much would change after the elections. Of the three candidates challenging Lula, not one is known for his commitment to free-market principles and all have relatively strong populist and/or left-wing leanings. Some would argue, however, that both Serra and Gomes are realists and understand that Brazil must remain engaged in the global economy, expand its lagging export potential, modernize its infrastructure, and attract much-needed foreign investment. Lula, on the other hand, has many Brazilians and international observers worried.
Some Brazilians fear that a PT government could turn back the clock and water down, impede, or even undo the modernization efforts started under Cardoso. Brazil is already suffering from one of its most severe economic crises in recent history, and there is concern that Lula will exploit the economic turbulence and call for an end to Brazil’s free-market experiment. Lula will be tempted to dramatically increase social spending, which, in turn, could trigger a default on Brazil’s delicately balanced $250-billion public debt, despite recent pledges to honor the debt obligations.
The threat of a Lula presidency, and to a lesser extent a Gomes presidency, has sent jitters down the spines of investors and has further exacerbated economic turbulence in Brazil. Many analysts blame the threat of a Lula presidency for the Brazilian real’s loss of more than a quarter of its value against the dollar this year, plummeting bond prices, and a bearish stock market. The Brazilian and multinational business community, as well as the Brazilian media, are also beginning to show alarm over an increasingly possible Lula presidency. The private sector and Brazil’s growing middle class fear his populist rhetoric, which has included threats to increase regulation, levy new taxes, and put a stop to Cardoso’s economic liberalization program. This has played into the hands of Gomes, who many Brazilians seeking change view as a safer alternative to Lula. Gomes’ strategy has been to portray himself as the pro-business, yet anti-government candidate.
In an effort to quiet these concerns, Lula recently launched a “goodwill” campaign designed to moderate his image and portray himself as a changed man. During a July visit to New York and Washington, D.C., PT president and federal deputy from São Paulo, José Dirceu, argued that a Lula government in Brazil, “will not mean any breach of contract, but will mean a change of economic policy.” In another effort to calm fears, the PT formed an alliance with the relatively small Liberal Party (PL), a party that was originally established to promote a neoliberal program, but has since evolved into an eclectic mix of diverse interests. As part of the deal, Lula selected Minas Gerais senator and textile magnate, José Alencar, as his running mate in what was clearly an effort to add some balance to his ticket. Despite strong opposition from PT stalwarts and clear ideological differences between the parties, Lula managed to bring Alencar onto his ticket with the promise that the PL would play a role in a Lula government.
Despite Lula’s efforts to remake his image, the United States should realize that a Lula presidency almost certainly means the death of the FTAA and probably less cooperation in the war on terrorism and narcotics trafficking. Lula said, “If the poor and downtrodden in Brazil elect me to the presidency, I will no longer allow our country to be an economic colony of the rich Western world.” Lula has also characterized the FTAA as an attempt by Washington to “annex” Brazil and the rest of Latin America.
It should also be noted that Lula has traveled frequently to Cuba and is surrounded by a number of senior advisers who lived there in exile during Brazil’s military government. The PT leader has close ties to Cuban dictator Fidel Castro and has courted such international terrorist states as Iraq and Libya. He has also said that if elected, he will emulate the populist, anti-United States agenda of Venezuela’s Chavez-a leader who has become a source of grave concern and embarrassment for the inter-American community. In a post-September 11 global environment, this could prove problematic for Lula if confirmed.
Fortunately for Brazil and the rest of the Western Hemisphere, if Lula were to become president, he would have a hard time forcing the country into a socialist mold should he attempt to do so. Brazil is a very large, complex, and diverse country that cannot easily be changed. It has what many would consider the most advanced and modern media in the developing world, a large and thriving multinational business community, an educated population, strong and competitive interest groups, and a conservative military that has never been sympathetic to Lula’s leftist bombast.
The 2002 race will surely be Lula’s best chance to win the long sought after presidential prize and, possibly, his last. His negative numbers have sunk below 50 percent for the first time ever, and he is wildly popular among Brazil’s urban poor. While Lula does have a history of leading in the polls early on and then fading toward the end of the race, this time could prove different, as his numbers have remained surprisingly steady. For Lula to pull it off, however, he will probably have to win in the first round where his opponents will be fragmented and competing against each other. Should he be unable to secure more than 50 percent of the vote on October 6, he will have a tough rode ahead in a runoff with either Gomes or Serra. As has happened in the past, a second-round vote could coalesce Brazil’s anti-Lula forces into a temporarily united bloc to ensure his defeat.
A Priority for the United States
While the Bush administration cannot publicly pick favorites in Brazil’s elections, it remains quite clear that a Lula government would present risks. The Brazilian people must decide whether they want to continue on the path toward modernization and growth, or whether they want a government that would possibly distance Brazil from the United States, isolate Brazil from the global economy, and undo many of the reforms launched over the past eight years.
Either way, Brazil’s elections will make for an interesting several months for the Latin America hands in the Bush administration and Brazil watchers in Congress. For far too long, U.S. officials have largely ignored Brazil, as crises in other parts of the hemisphere and the world have demanded resources and attention. This may be changing. The Bush administration seems to understand that Brazil holds the key to the FTAA and to real regional stability and prosperity. During a recent speech at the Center for Strategic and International Studies (CSIS), Assistant Secretary of State for Western Hemisphere Affairs Otto J. Reich, fresh from a visit to the Southern Cone, stressed that Washington is very much “engaged” with Brazil and that the Bush administration has a “strong commitment” to the bilateral relationship. Ambassador Reich added that the United States is looking forward to assuming cochairmanship of the FTAA negotiations alongside Brazil in October of this year and sees the relationship with Brazil as a top priority for the administration.
This positive attitude, however, is not shared by all, and tensions have flared between the two countries in recent months. The Brazilian daily O Estado de São Paulo even went so far as to say that relations were approaching an all-time low, and Brazil’s ambassador to the United States, Rubens Antonio Barbosa, has repeatedly castigated the Bush administration and Congress for what the Brazilians claim are unfair trade practices related to their agriculture and steel industries. This culminated with President Bush’s signing of a farm bill that sharply increases support to U.S. growers, thereby making Brazilian exports less competitive in the United States and on the world market. These disagreements, combined with an 18-month delay in replacing the U.S. ambassador in Brasília and perceived indifference on the Argentina crisis, have done little to help the bilateral relationship-a relationship that must be strengthened if the United States has any hopes of implementing a successful Latin America policy.
The fact remains that the two largest countries in the Americas share an enormous common ground of values and vision. And the Brazilian elections will help refocus attention in Washington on a country that is often overlooked. This should prove helpful and, hopefully, broaden the understanding of the mutual interests shared by the two countries. If the twenty-first century is truly going to be the “Century of the Americas,” as envisioned by President Bush, then Brazil and the United States will have to work as genuine partners in advancing the cause of democracy, rule of law, economic freedom, and security in the region. As recently stated by Donna Hrinak, the newly appointed U.S. ambassador in Brasília, “Brazil is our number one partner” in creating a prosperous and secure hemispheric community.
Endnotes
Note *: Michael Wilson has a master’s in international relations from the University of Texas at Austin. He is a multilingual international relations, public affairs, and public policy expert with over 15 years of experience working for some of the world’s leading non governmental organizations, corporations, and think tanks. During his career, he has both lived and worked in Brazil. Most recently, Wilson served as the Director for Latin America and the Caribbean at the International Republican Institute. Back.
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