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Life After Lula

Meet Dilma Rousseff, Brazil's first woman president.

Dilma Rousseff

Brazil elected its first woman president on Sun., Oct. 31, when Dilma Rousseff, 62, received 56 percent of the vote in a run-off against Jose Serra, a longtime rival of her Workers’ Party. This is the second time Serra, the São Paulo state governor—home to the third-largest city in the world—has lost a presidential election. The first was a clobbering back in October 2002 by current two-term president Luiz Inacio Lula da Silva, and now this one, by Lula’s chief of staff, Dilma.

Even a playbook that Serra’s campaigners pulled from the American right couldn’t save him. Attempts to instill fear of Dilma’s pro-abortion stance and Marxist past were not enough to send him to Brasília, the nation’s capital. Brazil’s voters mainly vote their pocketbooks, not their Catholic faith. The national news media are not overburdened by pundits spouting dramatic “he said, she said” vitriol, especially the kind funded by political action committees. Brazil has its independent and opinionated anti-Dilma and anti-Lula pundits, but it lacks the US-style echo chamber that would get everyday Brazilians spinning like a top. The mainstream concern of politics in Brazil is keeping the economy growing and keeping the crime in big cities like Rio de Janeiro in check.

The poorer north and northeast voted for Dilma, while the richer south and big agricultural states voted for Serra,

Dilma was radicalized in the late 1960s in Minas Gerais, a large state roughly the size of Texas about an hour’s flight north of Rio. Most of her ideological positions were influenced in her late teens and early 20s by the anti-capitalist political movements of Europe—Karl Marx, Vladimir Lenin, and Rosa Luxemburg. She trained in the left’s counter-military insurgency and intelligence, she has said on record, but never shot at any officials or military personnel during her time with the National Liberation Command, or Colina.

The poorer north and northeast voted for Dilma, while the richer south and big agricultural states voted for Serra, partly out of a suspicion that Lula’s party will expropriate farms from landowners and give the land to peasants. Lula never did any such thing, but perception is greater than reality. The rich, educated south has always been anti-Lula, as if he somehow embarrasses them on the world stage. It’s hard to see how that could be, when leaders around the world and from ideologies as vastly different as Presidents George W. Bush and Barack Obama have all spoken highly of Lula.

So what is it they are trying to avoid, exactly? Dilma’s side of history won. She was correct about the oppressive military government of her youth, as history has shown us. She was never accused of any violence against the government, despite her undercover activities to oust the regime. In the process, she was arrested in 1970—caught up in the global cold war between Washington and Moscow—and was high-profile enough to be labeled the Joan of Arc of the anti-government movement. After her 1972 release from prison Dilma moved to Brazil’s south, where she and her then-husband launched a small labor party. She became treasury secretary of Rio Grande do Sul and later its energy minister.

Dilma was taken on as Lula’s energy minister in 2003 and became his right-hand woman after a scandal led chief of staff Jose Dirceu to resign. Over time, Dilma’s Marxism had moved to a Lula-esque form of pragmatic capitalism. That doesn’t make her a sellout, and it certainly doesn’t make her someone the corporate and financial elites should fear.

Dilma will take over a country vastly changed over the past eight years under Lula. The elites have benefited, but so has nearly everybody else. Judging by Lula’s outgoing popularity polls, the majority would agree with the changes the country has gone through. It’s a new world and a new country.

Remember the Washington Consensus and its prescriptions for Latin America? That narrative of privatization and open markets has been relegated to the trash can and deleted from the ether. The International Monetary Fund can no longer push Brazil around. In fact, Brazil is a creditor nation and now helps fund the IMF. Its loans from the fund were paid back in full in 2004 under Lula, who did as he always promised: kick the IMF out of Brazil, which has become one of the most important of the rising economic and diplomatic powers, along with China and India.

Brazil weathered the greatest housing and derivatives bubble and crash in history, partly because Brazil’s banks, which are tightly regulated, were not highly leveraged like their US counterparts.

It’s because of Lula that Dilma is now Brazil’s first female president. A year ago Serra was considered the favorite, and it didn’t help that Dilma had to take time out of the campaign to battle lymphatic cancer. But, despite the fact that Dilma has never held elected office, Lula’s blessing sealed her victory. When you’re leaving the presidency with an 80 percent approval rating and an economy growing at 7 percent, your handpicked successor is not entirely a hard sell.

Lula’s celebrity alarms some, but it is the same crowd that never liked the grungy Workers’ Party anyway. They complain that Lula is running a Hugo Chávez-lite dictatorship. But while Chávez’s Venezuela has 25 percent inflation and is expecting no growth this year, eight years of Lula’s leadership have given the most popular president on the planet major credibility even for naysayers. What the market cares about most—making money—has been largely assured over the past few years. When Lula’s finance minister, Guido Mantega, talks, people listen and take him seriously. Central Bank president Henrique Meirelles has kept the markets happy and inflation in check with high but stable interest rates. Brazil has nearly $300 billion in cash reserves, and the net percentage of debt to gross domestic product is shrinking.

The City that Ended Hunger
Belo Horizonte, photo by Leah Rimkus
Belo Horizonte, Brazil did—and it wasn't that hard.

Critics once charged that the early Lula years were easy because the world economy and China were growing. But Brazil also weathered the greatest housing and derivatives bubble and crash in history, partly because Brazil’s banks, which are tightly regulated, were not highly leveraged like their U.S. counterparts. The country’s Ibovespa stock exchange reached all-time highs last year, and the government has recently used an arsenal of tax and interest-rate cuts to keep industry cranking out automobiles and selling refrigerators to an expanding working class nationwide, instead of just in the south. During the crisis, the government announced billions in new home loan subsidies for low-income developers and buyers. Builders are happy because they are making homes. Labor is happy because people are working. And buyers are happy because rates are affordable and long-term for the first time in decades. The securities market is so hot the government has had to slap taxes on foreign investors just to keep them from the government bond market.

But what matters most, on the ground, is that for the first time in Brazilian history, the poor are getting richer.

But what matters most, on the ground, to people, is that for the first time in Brazilian history, the poor are getting richer. According to the census bureau, in 2008 the middle class surpassed the poor to become 51.8 percent of the nation’s population. And it hasn’t been because of government handouts, according to the Getulio Vargas Foundation, a business school and think tank in São Paulo. It’s been earned from labor in a country that will be home to the 2014 World Cup and, if Dilma is as lucky as Lula has been, will be a country still governed by a woman when Rio hosts the 2016 Olympic Games. Those numbers are something Lula, and all Brazilians, should be proud of.


Kenneth Rapoza covered Brazil for Dow Jones and the Wall Street Journal between 2005 and March 2010. Before that he covered the nation’s politics for the Boston Globe and The Nation magazine.

Copyright © 2010 The Nation—distributed by Agence Global.

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