Lula’s Workers Party Faces Growing Dissension

by Daniel Bensaïd

The following article is from the October 2 issue of Rouge, the weekly newspaper of the French Ligue Communiste Révolutionnaire. It summarizes fairly concisely much of the information we have posted in several recent articles on the Labor Standard web site, especially “Nine Months of the Lula Government” by João Machado.

The translation of Bensaïd’s article, edited for Labor Standard, is from the November 2003 issue of the U.S. monthly paper Socialist Action (SA). (For a one-year subscription to SA, send $8 to 298 Valencia St., San Francisco, California, 94103.)

As the editors of SA point out, this article seeks to sum up the experience of the Workers Party government in Brazil since it took office in January 2003. They add that “Socialist Action did not support the candidacy of Lula in the 2002 elections because he ran in a coalition with the capitalist Liberal Party. On the same principled grounds, we believe that socialists must not participate as ministers in the Workers Party/Liberal Party government.”

Almost a year has gone by since Lula’s victory in the 2002 Brazilian presidential election. While the overwhelming majority of the population still thinks that this government is theirs, they are seeing its policies less and less as theirs.

In the 2002 presidential campaign, through his “Letter to All Brazilians,” Lula gave guarantees to reassure the financial markets, the International Monetary Fund (IMF), and the U.S. government. When he formed his new government, these commitments were confirmed by the appointment of the former director of the Bank of Boston as head of Brazil’s central bank and by the appointment to the ministries of economics and finance of a team that was more neoliberal than social.

The official line is clear. The first step is to get a grip on inflation and reassure the financial markets. Only then, according to Lula’s involuntarily humorous formula, “the growth performance will begin.”

In the meantime, the Brazilian economy is dying on the vine. The proclaimed “transition” has been put off indefinitely. Reversing Lula’s campaign slogan, the sociologist Chico de Oliveira considers already that “fear is triumphing over hope.”

In order to attract foreign investment, the government has committed itself to unfailingly paying the interest on Brazil’s foreign debt, cash on the barrelhead. It has set astronomical interest rates (over 26 percent). It is sticking to the unreasonable objective of achieving a 4.5 percent budget surplus, at the expense of social services and public investments but also of private investment.

As a result investment spending dropped by 12 percent just in the first half year. Unemployment is climbing, and the jobs situation in the Sao Paulo region has not been so bad since 1995.

“Pension Reform”

The “reform” of the retirement benefits system adopted by the parliament in August, under the pretext of combating privilege, fits in faithfully with the demands of the World Bank and follows the model being applied in several countries. It increases by seven years the amount of time that civil servants have to pay into the pension fund before they can collect benefits. This amounts to a major cut in retirement benefits for most workers, especially for women, because of interruptions in their work life for family reasons.

The new law also opens the way for so-called public pension funds, the administration of which will be turned over to private banks. Partial privatizations of public services are also being considered.

“Goodye, Mr. da Silva! Lula, Come Back!”

The first visible consequences of this disastrous course are doubly negative.

In the first place, the “show” of announced reforms is breaking down.

The “Zero Hunger” campaign should have been incorporated into an overall social project including fiscal reform, an employment policy, and the development of public services. For lack of means, it is being reduced to a public charity campaign with little effect.

Likewise, the credits allotted to agrarian reform, which the government is still proclaiming is a priority, are pathetic. Moreover, signs of disillusionment and discontent are multiplying in the social movements.

This can be seen first of all among civil servants, who were the victims of the pension reform. They mobilized massively in July and August and invaded the parliament in order to protest during the debate on the bill.

Government workers are an important component of the PT vote in the big cities. And if the government continues its present course, the 2004 municipal elections could result in punishment for the party.

On May 1, a series of personalities (including the former bishop of São Paulo, figures associated with liberation theology, and the singer Chico Buarque) sent a public letter to the government asking it to state its position on the Free Trade Area of the Americas (FTAA), which would create a big Latin American market dominated by the United States.

On June 10, a statement of alarm was published, signed by numerous prestigious intellectuals, most of them members or sympathizers of the PT. On May 30, 30 out of the 90 deputies in the PT parliamentary faction signed a document criticizing the central bank’s monetary policy. On June 12, several hundred well-known economists [most of them PT supporters] published a critique of the economic policy being pursued by the government.

At the beginning of June, the congress of the United Confederation of Workers (the CUT, with 80 percent of the 2,700 congress delegates belonging to the PT or other parties in the government coalition) reflected the worries of many trade union leaders. On the question of the pension reform, the CUT congress proposed three amendments, which were not included in the bill.

Also, the congress of the National Union of Students was marked by the advance of critical left currents.

Land occupations have tripled since the beginning of the year, and clashes are multiplying daily between the members of the landless movement (MST) and the “rural militias” of the landowners.

In August, a new coordinating committee was formed by various movements (the World Women’s March, the MST, the CUT, the student movement, associations of unemployed and homeless, various Catholic unions, and movements of artists and intellectuals). It worked out alternative proposals to the three reforms announced by the government—affecting social security, taxes, and education. This coordinating committee, already involved in a campaign against the FTAA, decided to launch a national initiative against unemployment and for the right to a job.

There are more and more numerous criticisms of the government, but Lula’s approval rating remains at a peak in the polls, around 80 percent. A large part of the working people considers this government as its own but supports its policy less and less. Some signs that appeared in the public workers’ demonstrations summed it up well: “Goodbye, Mister da Silva! Lula, come back!”

The government’s social and economic policy represents a fundamental choice. There will therefore be no significant change in orientation without crises and breaks in the PT or in the government.

The critical “Group of 30” [PT representatives in parliament] divided on the vote on the retirement system. Twenty-four resigned themselves to vote for it out of “discipline.” Seven abstained in the final vote, saying they did not want to vote either against their party or against their conscience.

Four, including our comrade, Walter Pinheiro, a deputy from Bahia, voted against it. Three of them are in the process of being expelled and are considering joining the PSTU [United Socialist Workers Party, which ran its own candidate against Lula]. Our comrade, Senator Heloisa Helena, is also the target of an expulsion procedure.

Strong Resistance to Becoming “Bossa Nova Blairism”

The meaning of this disciplinary offensive, which goes against the pluralism that has given richness to the PT, is clear. The party has to choose between being the political representative of the workers or a transmission belt for the government’s measures. What is at stake is the future of a class-struggle party, which was the reflection of a massive radicalization of social struggles since the 1970s.

Its transformation into a “new PT,” a sort of “third way,” a bossa nova version of Blairism, will not be accomplished in the coming months without strong resistance from the historical constituencies of the PT. In fact, the government’s policy is a gross violation of discipline with respect to the resolutions of the last congress of the PT, held in December 2001.

The Brazilian question will therefore occupy a central place in the debates of the left. This is true first of all in Latin America. If, in the subcontinent’s most powerful country, a left government can do no better than to submit to the demands of the IMF and the World Bank, what conclusions should the people’s movements in Ecuador, Bolivia, and Uruguay draw?

It is possible, however, to oppose the international creditors and the FTAA projects with a united front of debtor countries, along with Argentina and Venezuela.

Internationally, the bankrupt Social Democracy is taking the “Lula” experience as its banner, counterposing the snail’s pace and broad alliances of the “Brazilian model” to the alleged “precipitate advance” of the Chilean Unidad Popular [in 1970–73], which is supposed to have facilitated or provoked Pinochet’s coup d’état.

Without a rapid and radical change in Brazil, there is going to be a very brutal disillusionment.