Despite the disastrous socio-economic results of the first year of DaSilva’s implementation of his neo-liberal agenda, he resolved to continue, extend and deepen these policies, both in domestic and foreign affairs. Da Silva’s foreign policy is an extension of his domestic policy, and his domestic policy is an extension of his foreign policy. At the […]
Despite the disastrous socio-economic results of the first year of DaSilva’s implementation of his neo-liberal agenda, he resolved to continue, extend and deepen these policies, both in domestic and foreign affairs.
Da Silva’s foreign policy is an extension of his domestic policy, and his domestic policy is an extension of his foreign policy. At the beginning of 2004 Da Silva announced plans to privatize Brazil’s infrastructure, deepen Brazil’s role as a commodity exporter, to increase Brazil’s dependence on overseas markets, to continue domestic austerity and high interest rates to accommodate foreign and domestic bankers and speculators, to approve a modified version of ALCA and to deepen Brazil’s role as a raw material exporter to China. In pursuit of these neo-colonial policies, the Da Silva regime embarked on a foreign policy which included sending 1500 Brazilian military forces to Haiti to protect the US puppet regime put in power by the US marines; the mobilization of 15,000 troops to the Colombian border in coordination with the terrorist Uribe regime, minimal diplomatic and political relation with the Chavez government in Venezuela and Castro in Cuba, and an «open door» investment policy to financial speculator in the US and Europe. In addition Da Silva increased ties with China based on imports of manufactured goods and exports of minerals and agricultural commodities.
Lula’s Economic Policies:2004
Lula reaffirmed the continuation of his neo-liberal policies, support for the IMF, and his unconditional backing for his neo-liberal economic team throughout 2004. He clearly and loudly rejected Joao Pedro Stedile’s and the so-called «Left» PT’s call for a «turn» to the left or change in his cabinet.
In the first four months of 2004 industrial production fell by 1.2% compared to the last quarter of 2003 despite more working days (January-March, 2004) than (October-December, 2003). Despite record low international interests rates, Brazil retains the world’s highest rates, over 16% — and threatens to go higher to attract speculative capital and cut off any possible recovery. While year-to-year industrial growth was positive, the sectors, which showed the greatest increase, were the foreign-owned utilities (electricity, telecommunications), which successfully pressured the Lula government to raise rates increasing profits to the multinationals and raising the costs to consumers. Electricity saw a huge rise in net income of 94% and telecommunications of 53.2% during the first trimester of 2004 over the same period in 2003, despite the decline in the number of telephone lines in service because of growing unemployment. Other sectors such as steel, chemicals and papers and pulp showed significant declines in net income even as raw material exports such as iron ore and soya continued to grow – until the sharp decline in exports from April (Financial Times, May 12, 2004, pp.6 and 21).
In large part Brazil’s continued stagnation, despite the boom in agro-mineral exports, was in large part a result of the freeze in public investments as Celso Furtado noted in a speech delivered on May 4, 2004. At the same time, the Da Silva regime earned the praise of the IMF as they renewed their agreement to continue following the restrictive monetary policies and open markets which allowed overseas speculators and bond holders «to receive the highest returns of any emerging markets in 2003» (Financial Times, March 29, 2004, p. 11). The prognoses for the rest of 2004 are not favorable: export earnings which rose 12% in 2003 may fall as the price of Brazil’s most important exports (Soya, orange juice and iron ore declines due to the slow-down in China’s economy and a 30% decline in prices. Global interest rates are rising in the US, Asia and Europe, putting pressure on the inflow of capital and the volatility of the oil markets and the energy crises are likely to lower world demand and result in Brazil tightening even more the austerity programs in order to achieve the budget surplus targets of the IMF. As Cesar Benjamin pointed out 2003 was not (as Lula apologists argue) a «crisis» year — it was an optimal year, for growth, and because of Lula’s neo-colonial-neo-liberal policies Brazil failed to take advantage. Given the decline of opportunities for export growth, and the continued weakness of the internal market, Da Silva can be expected to deepen the concessions to capital, cheapen the cost of labor, provide more tax concessions to investors, further de-regulate the exploitation of the environment, and negotiate an agreement with the US on ALCA.
The «lessons» that Lula draws from the economic disasters of 2003, is to move further to the right – to offer Brazil to the highest bidder not only in the US, but Europe, China and whoever is interested. In March, even the PMDB, Lula’s right wing coalition partner, attacked the government’s extreme neo-liberal restrictive monetary policy, lack of public investment and concentration of credit to big business exporters at the expense of local small business people.
In order to pay for Da Silva’s mass media electoral and publicity campaigns, Jose Dirceu, key adviser to the government was exposed as heavily involved in accepting bribes from criminal syndicates. In attempting to put a «moral varnish» on his regime, Da Silva outlawed bingo throughout the country – thus putting thousands of workers out of work and prohibiting one of the few recreational outlets for low-income workers.
Despite opposition from the entire spectrum of political parties from the Liberal Party, PSDB, PMDB, PTB, PCB, PS, the neo-liberals running the regime’s economic policy have Da Silva’s unconditional support: Paolocci, Dirceu, Meirelles (the head of the Central Bank) are a united team, united in present and future orthodox neo-liberal policy. This «government class unity» faced with continued opposition calls by the «left» PT («Left Articulation») and some leaders of the MST to replace Paolocci-Meirilles. These «appeals» have fallen on deaf ears because Lula is the self-proclaimed and forceful defender of neo-liberalism and that is why he backs Paolucci and Meirilles. Even the rightwing Sao Paolo State Federation of Industrialists criticized the regime’s pro-IMF extremist «tight money policy» and high interest rates pointing out that investors prefer to bank their funds rather than invest or spend it, at a time of high unemployment and low levels of consumption (Latin American Economy and Business, March 2004, p.11).
While inflation is declining, unemployment continues to grow: from 10.9% in December 2003 to 12% in February 2004. Throughout 2004 Da Silva traveled overseas with a huge entourage of big business executives looking for export opportunities and potential foreign investors to take over Brazilian assets. Data from 2003 demonstrate that the seven biggest privatized firms made record profits of more than R$14 billion (or little less than $5 billion USD in profits), much of which was remitted overseas instead of being re-invested in the country. High interest rates have been lucrative source of super profits for the foreign and domestic banking elites; high utility rates have increased profits for the gas, electrical and telecommunication industries. The rate of profit for the banking sector was 21% while the non-financial sector’s rate was 15.6%.
It is clear that the privatized banks and their new owners are the main beneficiaries of the Da Silva regime. Moreover, they provide the «class base» for Lula’s single-minded pursuit in 2004 for new foreign investors, more privatizations and persistent lowering of trade barriers. The results are an increase in overseas remittances, more dependence on volatile primary commodities and greater vulnerability to speculative investments. The problem is that as commodity prices declined in mid-2004, and US interest rates rose, speculative capital was disinclined to invest and the Brazilian «recovery» will not take place. Moreover with high debt payments there are few domestic and state resources to «ignite» a recovery. Brazil under the neo-liberal policies practiced by Lula and his predecessor (Cardoso) has declined sharply in comparative terms over the past 6 years: from the eighth to the fifteenth biggest economy in the world. Between 1998-2004 the height of Cardoso-Lula neo-liberal policy, Brazil’s average annual Gross Domestic Product was 1.4%, ranking 164 among 178 countries (Global Invest, May 2004).
In April the Da Silva regime announced a $5.1 billion (USD) investment and financing plan for big business. The plan – all supply side policies – calls for tax exonerations for industrialists who purchase new machinery, new state subsidies for research and development by private companies, state financed international marketing campaigns, greater deregulation for business including sharp cuts in government health and safety programs, environmental deregulation and control over imports. The regime also proposed additional funding for some pay increases for civil servants and land settlements for landless peasants – largely as a result of a massive land occupation movement. Nevertheless the implementation of this minimum program is highly unlikely to make much of an impact, since the Finance Minister Paolocci assured bankers that the government would maintain its primary budget surplus of 4.25% of Gross Domestic Product and maintain neo-liberal orthodoxy for the remainder of Lula’s presidency (Financial Times, April 1, 2004, p.2).
Brazil – China Relation: Expanding Subordination
The Da Silva Regime, its supporters and not a few «leftist»critics have hailed the deepening relations with China as a progressive step. Since 1998 bilateral commerce between the two countries has more than doubled. In 2003 Brazilian exports to China rose by 80% to $4.5 billion dollars. China is now Brazil’s third biggest trading partner (total bilateral trade in 2003 was $7.9 billion USD). Brazil had a trade surplus of $2.385 billion dollars in 2003. Yet the pattern of Brazil-China trade locks Brazil into a new cycle of dependence on raw material production further distorting development patterns. Iron, soya and meat account for nearly half of Brazil’s exports. The «new investments» that Lula seeks from China are mainly to finance roads, ports and railways to secure supplies of raw materials. The biggest beneficiary of the trade is the recently privatized iron ore company – Compania Vale do Rio Doce.
However the limitations of Lula’s agro-mineral strategy became evident in the first half of 2004. Between March and April, the price of soya and iron ores dropped nearly 20% as Chinese leaders slowed the overheated economy. Chinese importers reportedly are vastly oversupplied and are cancelling or renegotiating prices, even as soya shipments from Brazil sit offshore. In addition China suspended soya imports from four of Brazil’s biggest supplier (Noble Grain, Cargill Agricola, Irmaos Trevisan and Bianchini). Chinese authorities have refused to accept 59,000 tons of «red» soya for «health reasons on the grounds that it contains high levels of antibiotics, pesticides and other chemicals which may be harmful to the consumer». Lula is a big promoter of chemical agriculture. It is estimated that Brazil will suffer a loss of $1 billion dollars or more in trade due to China’s slowing economy.
While Lula plans a joint investment venture of $40 billion dollars with China to improve transport of raw materials to China, nothing comparable is planned to finance small farmers, cooperatives and agrarian reform in the domestic economy. It is ironic that when he was in China, Lula spoke of «food security» and «fighting hunger» while his own agricultural policies focused on agro-exports and his neglect of agrarian reform was creating food insecurity and inducing hunger among millions of peasants and rural laborers. The reality is that Lula traveled to China with 400 of Brazil’s richest capitalists – his visit is designed to serve their interests. Both agro-business and mining use little labor, and there is virtually no value added to the products exported. Lula’s strategy toward China typifies his entire economic strategy – and the internal stagnation and greater inequalities that it generates.
Brazilian workers are not likely to benefit from the sale of manufactured goods to China, as Brazilian industrial firms relocate production to China. EMBRAER, the fourth largest aircraft manufacturer in the world has joined with a Chinese firm to produce in China where wages are less than a third of those paid to Brazilian workers. Marcopolo, Petrobras and other firms are also looking to establish enterprises in China. The benefits of the China market will not «trickle down» to the Brazilian workers and peasants. On the contrary, the «soya craze» promoted by Lula, has led to the over-expansion of big agro-export production, deeper into the rain-forest, the expulsion of small producers and absorption of uncultivated land available for land reform which would otherwise benefit the landless rural workers.
Social Crisis Deepens
In the first quarter of 2004 Brazil had a trade surplus of $6.170 USD according to the Secretary of Foreign Commerce. This surplus largely went into the pockets of the agro-mineral elite and the overseas and local financial holders of Brazilian debt.
In contrast to the generous payments ($30 billion USD) to the foreign creditors during the first half of 2004, and the record super profits for the agro-mineral exporters, Lula proposed a 1% real increase in the minimum monthly wage from 240 to 260 Reales (3 Reales = $1USD), approximately $86 USD a month, one of the lowest in South America. Lula’s argument that the government could not «afford» a higher raise, was ridiculed by all the opposition parties and even by some members of his own party. Even the conservative parties proposed an increase to 275 Reales per month. Lula’s minimum wage policy makes a mockery of his promise to «double the minimum wage in four years.» In fact even with low-level inflation, the minimum wage will at best remain unchanged throughout Da Silva’s presidency, condemning over 4.5 million workers to near indigency.
Lula’s promotion of the highly mechanized, capital intensive «agro-mineral export strategy», the low level of public investment, the decline in living standards have weakened the domestic market and exacerbated unemployment. May 2004 registered the highest recorded unemployment figures – 13.1% according to data from the Brazilian Institute of Statistics and Geography (Instituto Brasile-ño de Geografia y Estadistica -IBGE). Worse still the rate of unemployment is worsening between 2003 and 2004. The IBGE also indicated that real average income in April 2004 was 868.50 Reales ($280 USD) a fall of 3.5% with respect to April 2003. The unemployment rate in metropolitan Sao Paolo has remained in the 20% range. An indication of the gravity of the unemployment crisis in Sao Paolo is found in the subway systems announcement of 30 job openings, to which 126,000 applied, more than 4,000 applicants for each position.
In a major speech during his visit to China, Lula called on the United Nations, the G-7 and countries to join in a crusade against hunger. Lula’s speech was typical of his «public relations» rhetoric to bolster his international image as a spokesman for the poor of the Third World. The Brazilian reality of growing hunger and food insecurity under his regime belies his speeches in the international forums. The lowering of living standards, the concentration of land ownership, the decrease in pensions, the high unemployment levels, the increase of the low paid «informal» employment, the rising food costs increasingly based on food imports have all lowered food consumption and reduced food security. Even if we accept the very questionable government estimates of 53 million Brazilian suffering «food insecurity» – malnutrition – Lula’s Plan Zero had not even provided food to one sixth of the population over the past 1 ½ years. The Plan is a total failure from the structural point of view, as it has not changed land tenure or the productive and distributive systems that create hunger. Da Silva’s Zero Hunger continue to be at best a «charity program» to control potential poor voters. Rather than eliminate poverty, the program Zero Hunger, has enriched its administrators, fostered corruption and reinforced traditional clientelistic patron-client relations.
Given the large trade surplus of R$20 billion and the surplus of R$41 in the social security fund for the first quarter of 2004, it is clear that there are ample funds available to substantially increase the minimum wage, to expand public investment to create jobs and to finance land distribution. The real problem is not «lack of funds» as Lula argues, but the political -economic strategy, the class interests which the Da Silva regime has embraced. Under Da Silva, the surplus is distributed to different sectors of the ruling class: the foreign and local financial interests, agro-mineral exporters and the giant foreign owned manufacturing and petro-chemical companies.
In 2002 labor received 50% of national income, in 2003 this declined to 36% as over two-thirds of income was further concentrated in profits, interest and rents reaped by the capitalist class.
The real cause of increased poverty is found in the increased concentration of wealth, which results from the «carnal relations» of the Da Silva regime and the capitalist class.
To maintain the dominance of capital, Da Silva proposes new legislation to weaken the capacity of workers to call strikes by making arbitration between employers and workers all but obligatory ( Financial Times, April 16, 2004, p.5 ). The anti-labor legislation includes greater «flexibility» for the capitalists in firing and hiring workers, employment on short-term contracts, lowering severance pay and other measures designed to increase the power and profits of business. The CUT and Forza Sindical the two major trade union confederations are in agreement, because they will be given greater authority to «manage» union pension funds, increased centralized control over unions, though they will lose the automatic deduction of union dues.
Lula: Destruction of the Rain Forest
The record rate of deforestation of the Amazon rainforest under former President Cardoso continues under the Lula presidency. Between May 2002 (under Cardoso) and May 2003 (under Lula) approximately 24,200 square kilometers of Brazilian rainforest was destroyed. Deforestation is closely tied to Lula’s economic strategy. The regime’s promotion of the expansion of soybean and meat exports to Asia and Europe has led to deep inroads into the Amazon. The reduction of environmental budgets and personnel due to structural adjustment policies has weakened enforcement of environmental regulation especially with regard to illegal logging. In order to avoid expropriating big latifundio owners, the Agrarian Reform Institute (INCRA) has been settling landless rural workers in or adjacent to rainforests. Under Lula over 3.5 million hectares of the Amazon has been deforested and the pace is likely to accelerate following Lula’s new trade agreements with China, which include boosting soya, sugar and meat exports. As one environmentalist noted, Lula will turn the Amazon in one big hamburger factory, referring to the growth of huge cattle ranches. There is absolutely no relation between Lula’s emotional declarations on «saving the rainforest» and his neo-liberal agro-export strategies premised on deforestation.
The Social Crisis, Crime and Militarization
As Lula’s neo-liberal policies deepen poverty, extend unemployment and increase the numbers working in the «informal economy» to nearly 50% of the labor force, so too does crime increase to record levels. Drug trafficking provides a livelihood directly or indirectly for millions of poor Brazilians, unable to live on a minimum wage of $80 USD a month.
Violence between gangs, large-scale assaults on beaches, and street crime are endemic. There are two approaches to crime: the conservative policy is to increase police repression, militarize the low income neighborhoods, longer prison sentences for offenders; the progressive approach is to invest and create jobs and housing, to raise income and provide access to livable wages as an alternative to crime.
Lula’s regime has increased police powers and in May 2004 militarized the major favelas of Rio de Janeiro (FT, May 5, 2004 p.2). The prisons are vastly overcrowded and riots are frequent as repression increases the rate of incarceration but fails to lower the crime rate.
Lula’s policy toward «alternative solutions» to unemployment is also totally inadequate. His regime proposed to create jobs via subsidies to employers (First Job Program). In the first 6 months of 2004 only 725 jobs were created (FT, May 5, 2004, p,.2). Secondly Lula plans to «conscript» 30,000 extra young men into the Army in an agreement between the Employment and Defense Ministry and business associations. Without adequate funds or experience the military cannot fund and train the new recruits for civilian jobs. Given the Lula regime’s commitment to meet debt obligations, there are no funds available for large-scale public works projects that could make an impact on the growing millions of unemployed young people. Ultimately Lula’s crime policy has only one direction – more repression, more violence and greater citizen insecurity.
Land Reform: Lula and the MST
The greatest failure of the Da Silva regime is in the area of Agrarian Reform. Despite repeated promises to the landless rural workers, the Lula regime has expropriated far fewer farms than his neo-liberal predecessor Fernando Cardoso. Between January and April 2004, the Da Silva regime provided land to only 7 thousand families against a promise to settle 115 thousand families for the year. Altogether for the first 16 months Lula had settled 21,000 landless families against a promise of 230,000. As a result of Lula’s false promises and unwillingness to advance the cause of 24 million of the most exploited rural workers, the MST (Rural Landless Workers Movement) launched a national land occupation campaign on March 27. By the end of April, 33,411 families occupied over 135 latifundios in 20 states. Pernambuco, on of the poorest states witnessed 32 land occupations involving over 8 thousand families (Data from MST reports). By the middle of May, another 14 haciendas were occupied in Pernambuco. By the middle of 2004, there are tens of thousands of families – some estimates say over 200,000 families – occupying land in the most primitive conditions, waiting for INCRA to expropriate the land and settle the families. INCRA follows Da Silva’s directives «to follow the law» and has refused to expedite the expropriation process. The reactionary judicial system has created innumerable legal delays as the landlords successfully block the process through continual appeals.
Da Silva has failed to realize an Agrarian Reform because it is incompatible with his agro-export strategy, and his links to plantation owners and agro-business multinational corporations. After eighteen months it is clear that there are five basic structural contradictions between the needs of the landless workers and the Da Silva regime.
The contradiction between the policy of concentrating and centralizing production in the hands of the agro-export elite and the demands of the landless for land redistribution and expansion of the domestic market.
The contradiction between concentrating financial and commercial credit, transport and technical assistance to agro -business and their denial to land reform beneficiaries.
The contradiction between privileging and legitimizing agro-business expansion and criminalizing social action and land occupation by the landless rural workers.
The contradiction between the regimes massive transfers of wealth to foreign and domestic bankers and the drastic reductions in social services and public investments for small scale producers, rural proletarians and indian and black communities.
The contradiction between the subordination of Brazil to the imperialist division of labor and the effort of landless workers, cooperatives and small farmers to deepen and extend the linkages to the domestic market.
Da Silva has deeply exacerbated the polarization within the Brazilian class structure and economy – between exporters and local producers, between financiers and manufacturers, between private owners of the means of production and the public employees. This polarization is most sharply evident in the countryside where agro-exporters receive 90% of the credit and major incentives to export and grow by 20% a year, while small farmers and cooperatives producing food for the domestic market are on the verge of bankruptcy and earnings are stagnating. Starved of resources, facing competition from subsidized food imports, the cooperatives resulting from the land reform are facing a disastrous future.
The problems for the agrarian movements – including the MST – are not merely the lack of progress in agrarian reform, but the agro-export centered policies, which threaten to reverse the progress of the past 20 years.
The Da Silva regime brings together the most formidable configuration of agro-business power in recent years, and they have his unconditional backing.
Da Silva’s support for ALCA («light», his signing of new trade and investment agreements with China are all indicative of a powerful strategic alliance with the agrarian classes most hostile to agrarian reform and small producers for the local market.
The problem of the agrarian movements (landless and small farmers) is eminently political: Lula’s regime represents agro-business and the popular rural classes have no political representatives or leaders. The strategy of the MST giving «critical support to the Lula regime» (Joao Petro Stedile Interview, Paris, 9/5/2004) has boomeranged. MST support of Lula has strengthened Lula in alliance with the agro-business elite while weakening the opposition social and political movements.
For nearly 15 months the agrarian movements stagnated, tens of thousands of landless workers were «camped» and waiting for Lula to respond to the «pressure» of the «left» PT and other «friends of the MST» in the regime (Betto, Rossetti). This is a time of suffering, waiting, disillusion and finally frustration, leading to a series of localized land occupation independent of the central leadership of the MST. The reliance of the MST national leadership on its «close ties» with Lula to secure positive changes was a tragic illusion with very negative results for all concerned. All around the MST there is growing rejection of Da Silva’s embrace of the ruling class, the IMF and foreign banks. Less than one-third of the population supported Lula’s economic policy by June 2003. The public employees organized strikes and 50,000 marched to Brazilia; thousands of long-term members of the PT abandoned the party. Dissident PT congress members expelled from the Party formed a new party in May 2004: The Party of Socialism and Liberty. The PSTU organized the «Coordinator of Popular Struggles». The MST did not participate in any of these new movements, whose policies they share. The national leadership remained tied to the impotent, opportunist «Left Articulation» fraction of the PT, unable to influence the Lula regime but certainly weakening the growth of a real progressive political movement capable of offering an alternative to the ultra liberal policies of the Da Silva regime.
It is difficult to imagine how the MST leaders, after 18 months of savage attacks on workers salaries, pensions, labor conditions, minimum wages, and land reform, can justify «critical support» of the most reactionary financial agro-business regime in recent Brazilian history.
The MST’s massive land occupation movement in April/May 2004 is a major step forward – a recognition that nothing progressive will come from the Da Silva regime. However even as the land occupation occurred, Da Silva completely ignored them: he was off to China with 400 bankers, agro-businessmen and industrialists signing agreements to expand their markets, their profits and offer lucrative deals to their Chinese counterparts. Da Silva plans to invest tens of billions of Reales for joint ventures with China to promote agro-mineral exports. He has yet to provide any meaningful funding for the uncultivated lands occupied by the MST activists.
The political problems facing the MST cannot be solved simply by social struggles – albeit that is far better than waiting for change via an elected neo-liberal politician. Social movements like the MST in Brazil cannot rely on electoral parties, particularly those so deeply embedded in the capitalist institutional establishment like the PT. Electoral politics has corrupted and co-opted every left party over the last 30 years – and the PT of Brazil is no exception. The political choice is not between becoming a partner or ally of an electoral party or remaining merely a social movement, but developing a political party-movement with revolutionary non-electoral politics for taking state power — prolonged, complex process.
The deeper problem affecting all the social movements in Latin America is how to move from sectoral or national social protests to a strategy for building a political party for taking state power. Lacking their own party and dependent on the electoral strategy of the PT, the MST has turned to what they do best, organize social struggles (land occupations) and social protest. However facing a coherent, determined regime bent on transforming Brazil into a neo-liberal «partner» of Chinese elites and an appendage of US and European imperialism the old militant tactics of «organizing the masses and pressuring the state» is not likely to have much effect on the global policies of the Lula regime.
Once again as is evident from our detailed survey of all aspects of the Lula regime (its structural links, policies and strategy) all «progressive» electoral regimes inevitably became integrated through subordination into the imperial systems. The result is that social movements and their members are blocked from even achieving their minimum goals. In Ecuador, the petroleum workers union and CONAIE, through its electoral arm Pachacutic allied with Lucio Gutierrez who, upon taking office, subsequently embraced privatization of petroleum, the IMF, ALCA and Plan Colombia, repressed the petroleum workers and ignored the social needs of the Indian movements. The result was a very weakened Petroleum union, a discredited Pachacutic, and a weakened base for CONAIE. In Bolivia, Evo Morales, the cocalero movement leader of the electoral party, the Movement to Socialism (MAS), after some electoral advances, turned to the right. Evo Morales was absent from the urban uprising of October 2003, supported the pro-imperialist, neo-liberal regime of Carlos Mesa and plays a major role in dividing and attacking any large-scale mobilizations in favor of nationalizing petroleum. Evo Morales is influenced by his quest to win Presidential elections in 2007 – and has copied Lula’s strategy of embracing the MNC’s and the neo-liberal political model.
The MST has not suffered the same debacle as CONAIE largely because only a few members were in the government and it kept sufficient autonomy to maintain the loyalty of its members. The MST, unlike the cocaleros, is not dominated by a single electorally ambitious personality, and had sufficient grounding in class politics to avoid becoming a tool of the bourgeois state. But the MST’s confidence in Lula and ties with the «Left» of the PT, undermined its opposition to Lula’s reactionary attack on pensions, minimum wage, the IMF pact and military support of US colonial occupation of Haiti.
The danger is that by continuing to give «critical» support to Lula’s regime, especially now after 18 months of government, the MST will suffer the same political discredit as the PT.
As a result of Lula’s blatant strategic alliance with the agro-export, financial and manufacturing capital, all the polls show a steady but continual decline in popularity. A poll by the Institute Sensu showed a decline in support from 45% to 41% between February and March 2004. Another poll in March 2004 indicated that 46% of the public thinks that Lula is taking the «wrong road». By the end of June, it was clear that Da Silva could no longer dominate congress, as corruption scandals and several measures affecting the election of Senate leaders, and the outlawing of bingo demonstrate. By June only one third of the electorate supported Lula’s economic policies. By the end of the year it could be closer to zero. The impotent «left PT» demonstrate its total commitment to accompanying the Lula regime to the bitter end in part because they are integrated into the state apparatus and have no serious political alternative. The big question is whether the MST will continue to ignore the majority of public opinion, most of the unionized public employees, the 21% of unemployed of Sao Paolo, the 200,000 landless rural workers camped on highways and the alternative leftwing political parties (the Party of Socialism and Liberty and the PSTU) which support a radical agrarian reform. Up to now the national leadership of the MST persists in arguing that the problem is Paolucci, the Minister of Finance, and that if he is forced to resign Lula will be more «responsive» to the MST. This reveals a refusal to recognize the large-scale structural links between Lula’s regime and finance capital and the ruling class. To point to a personality (backed by Lula) is not class analysis. To make Paolucci responsible for reactionary, monetary, investment, trade, budget, debt, land and labor policy is patently myopic. The problem is the regime and until the MST returns to its roots in class politics, it is likely to oscillate between successful militant social mobilizations and failed political initiative. Many of us hope that sooner, rather than later, the MST will break with the pro-imperialist Da Silva regime and make a major contribution toward building an alternative extra-parliamentary political party with millions of unemployed workers, landless peasants, workers and public employees disenchanted with Lula.
Conclusion: Opulence in the Midst of Misery
In mid-June 2004, President Da Silva met with his close ally, multi-billionaire Fernando de Arruda and 15 other big capitalists to plan the states’ economic priorities. A few days later, Fernando celebrated his birthday with 8,500 guests, 300 of whom flew in their private airplanes to his estancia. In late June, Da Silva rejected attempts to raise the minimum wage from 240 to 275 Reales (from $77 to $88 USD) a month. He defended a real increase of 1.5% to $83 USD, arguing that the extra $5 USD a month for the impoverished, hunger working poor was against his fiscal austerity.
Nothing symbolizes Da Silva’s obscene servility to the festive super-rich like Fernando de Arruda who can squander millions of Reales for a birthday party and the President’s arrogant contempt for the poor struggling to survive on $2USD a day.
Every month of Da Silva’s regime provides more evidence that his policies are widening inequalities: in 2003-2004 the number of millionaires grew from 75,000 to 85,000 while the vast majority of workers saw their living standards decline by 12%. To further the pillage of Brazil’s national resources, Da Silva is preparing on August 15 to auction off to foreign capital petroleum regions with known reserves of 6.6 billion barrels of petroleum (as determined by the state petroleum company, Petrobras), amounting to 50% of the proven reserves in what will surely be remembered by historians as the «Great Petroleum Robbery». Cesar Benjamin asks: «What adjectives does a government merit which acts like this?» We can suggest many: «Sell Out», Entrequista, but even the worst epithet can not match this unconscionable act of betrayal of many future generations of Brazilians.
June 25, 2004