Continuity Is Not Lack of Change

Introduction

The ascension of Dilma Rousseff to the presidency of the Federal Republic of Brazil is extraordinary. Inaugurated on 1 January 2011, President Dilma is the first female president in a country where machismo is still prevalent. She is the first Brazilian president to have been a member of the armed left that opposed the military dictatorship of 1964–85; captured and tortured in 1970, she spent almost three years as a political prisoner. She was personally selected and groomed for succession by her predecessor President Luiz Inácio ‘Lula’ da Silva (2003–10), after serving as his minister of mines and energy and then chief of staff, in a trajectory that revealed the personal power of the President (Lulismo) over the collective power of the party he led, the Partido dos Trabalhadores (PT) or Workers’ Party. Without having ever contested an election before, Dilma won the second round of the presidential election on 31 October 2010 with 56 percent of the valid vote, compared to 44 percent for her opponent José Serra. She lacks her own personal political base, and must preside over a fractious coalition of 14 parties in Congress.

How is Brazil faring under President Dilma? How will Dilma’s government cope as it attempts to preserve and extend the accomplishments of President Lula, and face the challenges of a new decade? While continuity of personnel and policies between Lula and Dilma is the watchword of the new government, it has become obvious that continuity is not and cannot be synonymous with a lack of change. Given the evolving circumstances of the country, the Dilma administration has chosen to take quite different positions from its predecessor in a number of areas. The articles on Brazil in this issue of Critical Sociology are dedicated to a preliminary analysis of some of those changes, as well as continuities. The range of issues examined is eclectic and broad, and all of our contributors provide a roadmap to the remaining years of the Dilma administration in their particular area. This issue therefore goes beyond an evaluation of President Lula’s legacy, and includes a preliminary analysis of the character of the new government, as well as the nature of the country that it is attempting to govern. ¹

Lula’s Legacy

The two terms of Brazilian President Lula (2003–10) are a hard act to follow. Lula and his PT-led government achieved both economic stability and growth and the reduction of poverty and income inequality. This is a rare combination in the annals of Latin American politics. It is also remarkable in that it was achieved in the contemporary period, in which globalized capitalist markets generally favour ‘the rich over the poor, capital over labour, and finance capital over industrial capital’ (Chang, 2010: 3; see also Fasenfest, 2011: 717). Lula retained the orthodox economic policies of his predecessor, paying off an IMF loan early and maintaining good relations with the business community, especially key financial and business interests based in São Paulo. However, this economic continuity was complemented by a major commitment to boost the living standards and opportunities of the poor. The Lula government thus transcended the limitations often ascribed to so-called ‘pink tide’ governments in Latin America and crafted popular and sustainable ‘post-neoliberal’ redistributive policies (Barahona, 2011: 894–895).

Lula’s government adapted Bolsa Escola (School Allowance) to create Bolsa Família (Family Allowance), a conditional cash transfer programme that now covers over 12 million families, or more than 40 million people. Bolsa Família requires recipient families to keep children in school and have them receive immunizations in return for small monthly stipends. The stipends vary between R$32 (about US$18 at current exchange rates) and R$242 (US$137), depending on the family’s monthly income and number of children. ² The Lula administration also increased the real value of the minimum wage by 66 percent between 2003 and 2010 ³ and introduced a subsidized mortgage programme (Minha Casa Minha Vida, or My House, My Life) that made home ownership affordable to many low-income Brazilians. Another programme, Pro-Uni, provided scholarships to private universities for more than 700,000 low-income students. ⁴

Brazilians’ access to credit also expanded dramatically. Credit available to individual consumers rose from R$83b (roughly US$48b) in 2001 to R$502b (or US$288b) in 2010, a six-fold increase (Cucolo, 2010). Partly as a result of these developments, poverty fell significantly under the Lula administration. Whereas 49.5 million or 28.5 percent of the total population in 2003 lived under the poverty line, this figure was only 29 million, or 16 percent of the population, in 2008. Equally important, income inequality, while still very high, also fell (Pereira, 2010: 12). From 2001 to 2007, the Gini coefficient declined at an average rate of 1.2 percent per year, declining to its lowest level in 30 years in 2007 (Barros et al., 2010: 134).

The commodities boom, spurred in part by increasing demand from China, helped the Brazilian economy during the Lula presidency. The commodities boom helped the country recover from the 2008 financial crisis, and the Brazilian economy grew in 2009. In the same year, China replaced the USA as Brazil’s leading export market, and Brazil now exports roughly a third of its exports of iron ore and soy to China. While its average annual GDP growth has been slower than that of other BRICs in the last decade, the rate jumped to 7.5 percent in 2010, President Lula’s last year in office (the economy grew at a slower rate, around 2.7 percent, in 2011). ⁵ Formal sector employment increased by roughly 15 million new jobs during the Lula administration’s two terms in office, fuelling the expansion of the domestic market. Foreign direct investment (FDI) in the country also surged, buoyed by a wave of mergers and acquisitions. From 2006 to 2010, annual FDI in Brazil averaged US$34.6b per year, representing about half of all the foreign direct investment entering South America as a whole. ⁶ Perhaps even more significant, outward foreign investment by Brazilian firms and individuals exceeded inward investment in 2010. Brazilian multinationals such as Petrobras, Vale, Oderbrecht, Gerdau, Embraer, Perdigão, Sadia, and Votorantim have become major global players. Their expansion is sometimes helped by the Brazilian government’s national development bank, the Banco Nacional do Desenvolvimento (BNDES), which loans more money on an annual basis than the World Bank (Pereira, 2010: 13).

Other aspects of the Lula government’s foreign policy also attracted attention. The emphasis on South-South dialogue reflected Brazil’s changing export portfolio, and especially the rise in importance of Asia. BRICS summits and meetings of the IBSA group (India, Brazil, and South Africa) were examples of Brazilian willingness to work with partners in order to push for a broader multilateralism and greater role for the South in international relations. In Honduras in 2009 (during the crisis after the removal of elected President Manuel Zelaya), and in Iran in 2010 (when Turkey, Brazil and Iran attempted to negotiate a deal on Iran’s nuclear power programme), Brazil became a protagonist in issues normally claimed as the reserve of ‘great powers’. Closer to home, Brazil pushed for greater South American economic and political integration, with mixed results, in the realization that its global aspirations depended to some degree on peace and development in its own neighbourhood. ⁷

Any preliminary assessment of Brazil under Dilma will be influenced by the various and conflicting interpretations of the Lula administration. At least four major perspectives on the Lula period can be identified. ⁸ For supporters of the prior administration of Fernando Henrique Cardoso (President from 1995 to 2002) and his Partido da Social Democracia Brasileira (or Brazilian Party of Social Democracy, PSDB), Lula embodies a regressive Latin American populist tradition. For this reason, Cardoso dismissed Lula’s rule as a kind of ‘sub-Peronism’, in reference to the politics of Argentine president Juan Domingo Perón (1946–55; 1973–4). In this view, Bolsa Família is a manipulative and authoritarian form of assistencialismo (welfarism), keeping the poor dependent on government hand-outs and turning them into submissive voters for the PT and its allies.

From this perspective, Lula’s rule is also seen as a continuation of the tradition of Brazilian dictator Getúlio Vargas (unelected President from 1930 to 1945, then elected in 1950 and serving from 1951 until his suicide in 1954), who was characterized by some of his supporters as the ‘father of the poor’, benevolently bestowing benefits on the working class from above in a system that was ultimately conservative, authoritarian, and quite limited in terms of the degree of redistribution and genuine popular mobilization that it allowed. This line of criticism often makes comparisons between the Lula administration and other populist experiments in Latin America, such as the hegemony of the Partido Revolucionario Institucional (or Institutional Revolutionary Party, PRI) in Mexico or the rule of Hugo Chavez in Venezuela. While somewhat implausible, these comparisons underline liberal anxiety about the PT’s alleged authoritarian tendencies and the personalism, patronage, and clientelism that the PT – while critical of these practices in opposition – seems to have adopted in power. They also reflect the relative decline of the party compared to the growth of Lula’s personal political power. ⁹

A second influential interpretation of the Lula years is that they represent a realignment and a ‘new deal’ comparable to the 1932 and 1936 elections in the USA. The political scientist André Singer is most closely identified with this view. Singer sees the 2006 election in Brazil as pivotal, because in that election Lula appeared to lose most of the middle class but gain the votes of the majority of the poor, unorganized members of the working class, a segment of the population until that time generally unavailable to the PT, whose previous base rested primarily on the unionized working class and the progressive middle class.

For Singer, the 2006 election will come to be seen as a long-term realignment in favour of redistribution, poverty alleviation, and the reduction of income inequality in Brazilian society. Singer argues that Lula’s economic orthodoxy, which included maintaining the macroeconomic policies of his predecessor, was crucial to winning the support of the poorest sectors of the population. These sectors had been most negatively affected by the high inflation of the 1980s and early 1990s, and preferred economic stability to radical experiments. ¹⁰ Lula was able to appeal to this desire for stability while presiding over the expansion of the domestic market and an increase in consumption of the poor, thereby forging a multi-class base of support that included bankers and industrialists as well as poor residents of favelas and the countryside. While some have praised these outcomes as the development of a ‘middle class’ society, Singer (2010) points out that it might be more accurately characterized as the growth of a newly enfranchised working class, a segment of the population previously outside the ambit of formal sector employment and bank credit. ¹¹

A third interpretation of the Lula presidency comes from the left, and reflects the frustrations and disappointments of those supporters of Lula who hoped for a more transformative and radical experience in power. The sociologist Chico de Oliveira, for example, sees the Lula administration as representing the rise to power of a ‘new class’ of former trade union leaders who have become elected officials and bureaucrats of a powerful party-state machine in control of billions of reais of pension funds and government budgets. This new class depends upon and dispenses patronage. Many of its members were appointed by President Lula to federal ministries. (Brazilian presidents have the power to make roughly 20,000 appointments to the top layer of the federal bureaucracy, compared to about 4000 for their US counterparts). For De Oliveira, the Lula presidency represents a betrayal of the aspirations of the founders of the PT, because Lula’s government presided over the consolidation of a financialized and globalized capitalist system that offered few genuine prospects of democratic citizenship and progressive social change to its supporters. De Oliveira points out, for example, that while the PT government doled out R$14b to the poor via Bolsa Família during Lula’s two terms in office, bond holders who financed the Brazilian government’s internal debt made US$200 billion during the same period (De Oliveira, 2011: 34). For this reason many social movement activists, such as some of those in the MST (Movimento dos Trabalhadores Rurais Sem Terra, or Landless Rural Workers’ Movement) became disillusioned with the Lula government.

The corruption scandal of 2005, the so-called mensalão (or big monthly payment), reinforced this criticism of the Lula government as being more about the ambitions of a cadre of party-state machine politicians than the realization of a project of grass-roots political movements. The mensalão scandal involved allegations that the Lula administration had regularly paid members of its allied parties in Congress to vote for government bills. The mensalão was seen as reflecting the logic of coalitional presidentialism, in which the president’s own party does not enjoy a majority in either house, and the president has to stitch together a multi-party coalition using a variety of inducements and promises. This scandal was especially demoralizing for those supporters of the PT most attached to the party’s ethical stance against the cronyism, patronage, clientelism, and opportunism of traditional Brazilian politics. This stance had been strongly articulated in the PT’s first decade of existence in the 1980s, when it was largely a party of opposition, but lost its resonance once the PT gained power at the national level. For De Oliveira, the trajectory of the PT is similar to that of other mass parties originally committed to an original and creative programme of social change, such as the British Labour Party and South Africa’s African National Congress (ANC). In De Oliveira’s perspective, these parties became vehicles to power for a small group of politicians and increasingly lost touch with their mass base. They formed governments that perpetuated sharp class inequalities, social exclusion, and plutocratic if not kleptocratic networks of patronage and cronyism at the top of the state apparatus. ¹²

A fourth perspective on the Lula presidency deserves mention. This is that it was a government of projects and not reforms. ¹³ In this view, the hard work of readjusting the Brazilian economic and political system to the realities of globalized capitalism and coalitional presidentialism was done by the government of Fernando Henrique Cardoso. It was President Cardoso who privatized many state-owned industries, changed the constitution to allow for re-election of presidents, governors and mayors, and cleaned up public finances by passing a Fiscal Responsibility Law in 2000 that enabled the Federal Government to rein in excessive public spending by the states. President Lula merely inherited this favourable conjuncture and rode the commodity boom to economic growth and political popularity.

In this interpretation, Lula will be judged harshly by future historians because he did not spend his enormous political capital on needed reforms that he might have been able to achieve. Reform of the cumbersome tax system, for example, so long talked about, was never achieved. The pension system (previdência), hugely unjust and not properly funded, was also not overhauled. The poor quality of public education and lamentable state of Brazil’s infrastructure (ports, railways, roads, and electrical energy grid) were also not addressed. In this view, the Lula administration’s principal failing was not latent or overt authoritarianism but laziness and complacency, a tendency to tell the Brazilian public what it wanted to hear about the historic new achievements of the country. In this view the Lula government missed an historic opportunity to force Brazilians to confront their society’s shortcomings and start to fulfil, in a realistic manner, the promise of greatness inherent in Brazil’s immense territorial size, natural resource endowment, and human talent.

These are some of the powerful categories and concepts to thinking about the Lula years: a regressive ‘sub-Peronist’ regime representing the worst traditions of Latin American populism or caudillismo; an historic state-society pact offering a long-term ‘new deal’ to previously excluded members of Brazil’s working class, and the harbinger of a progressive and bounteous future; the arrival in power of a corrupt ‘new class’ of bureaucrats and politicians eager to betray the aspirations of the PT in order to enrich themselves, their hangers-on, and their financial backers; and a complacent government of projects rather than reforms, eager to flatter and deceive the Brazilian public into believing that its hour of redemption and recognition had arrived. That only one of these portraits is attractive should not escape our attention. Many other variations of these themes exist in the popular press and scholarly analyses of President Lula’s eight years in power, but these four narratives are probably the most representative and influential of those in circulation, and will inevitably inform any assessment of the Dilma period. Assessing the impact of the Dilma administration on Brazil, and the influence of Brazilian society on the Dilma government, depends to some extent on which interpretation of the Lula years the analyst has in mind. It is beyond the scope of this introduction to evaluate the merits of each interpretation. However, it is important to be aware of them as one reads the other articles in this issue.

Continuity and Change under President Dilma

How has the Dilma administration taken the legacy of the Lula years and used it to advance its own project of continuity and change? In what areas of policy have shifting circumstances led the new government to deviate from the trajectory laid down by the Lula administration? Each of the authors of the articles that follow wrestles with these questions in her or his own particular policy area, with results that are sometimes surprising and usually complex.

Lecio Morais and Alfredo Saad-Filho begin our exploration by looking at economic policy under Dilma. They argue that Dilma’s government is more vulnerable than Lula’s for several reasons. First, Dilma lacks the charisma and popular political base of her predecessor, so that even a minor scandal, fully exploited by the opposition and its allies in the media, could destabilize her government. Second, political reform is unlikely to occur, meaning that the transactional costs of maintaining the government’s support base will remain high. Third, the international environment is likely to be less favourable for Dilma than it was for Lula. Like Lula, Dilma is overseeing hybrid economic policies that combine neo-developmental with neoliberal policies. An economic hiccup could expose the contradictions in these two approaches and undermine the coalition that provides her with support.

In the second article in the collection, Mahrukh Doctor looks at the challenges of trade policy under President Dilma. Despite the strong economic growth rate in the year before she took office, Dilma inherited an increasing trade deficit in manufactured exports from President Lula. During her trip to China for the BRICS summit in April 2011, she emphasized Brazil’s desire to increase the export of higher value-added products to China, a goal dutifully repeated in the BRICS communiqué, without any binding commitment required on China’s part. According to Doctor, Brazil has responded to its declining position in manufactures, especially the perceived threat of Chinese competition, with increasing recourse to anti-dumping measures and local content requirements. Several Brazilian studies have indicated that deindustrialization, provoked by the loss of market share in key export markets such as Argentina, Mexico, the USA, Africa, and the Middle East, has accelerated in recent years. It is difficult to tackle this problem due to the strength of the currency, the real, itself partly a product of loose monetary policy in the USA and currency manipulation in China. Doctor’s analysis reinforces Morais and Saad-Filho’s insight that the international environment faced by President Dilma is less favourable than the one navigated by President Lula.

Juliana Bertazzo examines military and defence policy in Dilma’s Brazil. She describes the new defence white paper and the ongoing effort to reduce military prerogatives, such as its control over civilian aviation. While Dilma initially retained Lula’s Minister of Defense, Nelson Jobim (in much the same way that US President Obama retained Robert Gates at Defense when he began his presidency in January 2008), she has overseen some important changes in civil-military relations. One of these was the banning of military celebrations of the coup of 1964 in 2011, a symbolic but significant shift that was noted throughout the military. The commemoration of the 1964 coup had been an annual, self-congratulatory ritual in military clubs throughout Brazil in the first 25 years of post-1985 democracy, and its abolition represents an important shift in civil-military relations and perhaps the end of an era in Brazilian military and political life. This decision also demonstrates President Dilma’s apparent determination to control the armed forces. She further put her stamp on defense issues by replacing Nelson Jobim as Minister of Defense with Celso Amorim, Lula’s Foreign Minister, in August 2011.

The military still retain an important role in domestic public security policy, and the latter is the subject of Fiona Macaulay’s article. Violent crime is one of the most pressing problems in Brazil, and public security policy is hotly debated. Macaulay seizes on small but potentially significant new developments under the Dilma government that point to possible improvements in this area. One is a presidential decree establishing guidelines for the use of lethal force by the police. This apparently innocuous decree could represent a step forward in making the police accountable for their actions. Summary executions by the police are a significant portion of all homicides in many Brazilian cities, and most police forces have previously operated without any explicit guidelines on the use of force. The building up of the Federal Police and its deployment in place of the Army, and the shifting of the counter-narcotics portfolio from the Ministry of Defense into the Ministry of Justice, are two other promising developments. For Macaulay, public security is likely to remain a challenge for the government throughout President Dilma’s term, especially because Brazil will host two high-profile events in the coming years: the soccer World Cup in 2014 (to be played in 12 Brazilian cities) and the Olympics in 2016 (which will take place in Rio de Janeiro). However, some progress in making policing more accountable to the public and in diminishing overall levels of violence might occur.

Par Engstrom turns to another contentious policy area for the Dilma government, human rights, focusing on both the domestic and international spheres. In the domestic sphere, Brazil has long remained an outlier with regard to transitional justice in South America; while its neighbours Argentina, Chile, Uruguay, and Peru have all initiated broad packages of reforms, including truth commissions, to address the human rights abuses of the authoritarian past, Brazil has stood out by the absence of such initiatives, with the exception of an extensive reparations programme for the families of the killed and disappeared and compensation for those who lost jobs and/or were tortured and imprisoned. Therefore the decision by President Dilma, herself a victim of torture, to approve the creation of a truth commission to investigate past human rights abuses, is significant. In the international sphere, Dilma declared in December of 2010, before taking office, that her stance on human rights would be slightly different from – and more pro-active than – that of the Lula government. In one sense she has been true to her word. Brazil voted in favor of the appointment of a special rapporteur to investigate human rights abuses in Iran in the UN Human Rights Commission in March 2011. This decision was condemned by former Foreign Minister Celso Amorim, and is contrary to the Lula government’s prior stance on Iran. However, it remains to be seen whether this shift amounts to a wholesale reorientation of Brazil’s human rights diplomacy or a singular action designed simply to reset relations between Brazil and the USA. Engstrom weighs the persuasiveness of each approach to this question.

Brazil has come to occupy a central place in international debates about the environment and climate change, and Anthony Hall and Sue Branford turn their attention to this aspect of the Dilma government. The PT has sometimes been accused of harboring an old-fashioned view of the environment as an obstacle to economic development, and these accusations have resurfaced in the polemics surrounding the Belo Monte hydro-electric project on the Xingu river in Pará. The government proposes to build a set of dams in and around Belo Monte that will flood a large swathe of rainforest and displace more than 20,000 people. Pitting environmentalists and indigenous people against government planners and large construction and power companies, the conflict over Belo Monte has dragged on for years. Hall and Branford point to the dilemma that the conflict represents for the Dilma government; the government needs continued economic growth in order to maintain popularity, but it has also pledged to be a responsible environmental player on the global stage. Hall and Bradford argue that the Dilma government’s neo-developmentalism has trumped its environmental commitments in the ferocity with which it is pursuing the completion of the project, and that accountability mechanisms that are supposed to protect the environment and the rights of the indigenous have failed in this instance.

The media played a controversial role in the 2010 presidential elections, with some important outlets such as the Folha de S. Paulo newspaper, Veja magazine, and TV Globo news being accused of being biased against President Lula. The perception of media biases reinforced calls that were already being made for regulation of the media, which is concentrated in the hands of a relatively small number of powerful conglomerates and politicians. Carolina Matos examines this topic in the penultimate article in this issue. Matos points out that the struggle over a new regulatory framework for the media has been going on since the end of the military dictatorship in 1985 and the approval of the 1988 Constitution, but these became more intense during the Lula presidency. Matos argues that although the media have become more professional, and the public media have been strengthened, Brazil’s media landscape has not been significantly changed since the end of the dictatorship. The new regulations proposed under Dilma’s government have the potential to democratize Brazil’s media, but are likely to be fiercely resisted by the powerful vested interests that control much of the television, radio, and newspaper market in the country. By comparing the media in several different countries, Matos highlights the distinctive challenges of media democratization in Brazil.

Paul Heritage concludes our survey by looking at culture and the controversial policies of the Ministry of Culture. President Dilma’s appointment of Ana de Hollanda (the sister of renowned singer-songwriter and novelist Chico Buarque) as Minister of Culture was initially interpreted by some as a reversal of some of the major policies of her predecessors Gilberto Gil (2003–8) and Juca Ferreira (2008–10). According to Heritage, this argument about reversal is simplistic, and there are strong continuities across the Lula and Dilma governments. For example, Heritage highlights the National Plan for Culture, the concept of cultural citizenship, and the vale cultura (culture voucher, or funds distributed to low-income citizens for them to use to consume cultural goods) as threads that link the two governments. These policies reflect the PT’s commitment to the democratization of culture as well as politics.

Dilma’s Brazil is thus a country riding high on a wave of self-confidence and newly won international visibility, but also one struggling with problems and contradictions. In government, President Dilma has had to respond to a number of crises. Perhaps the most serious of these have involved allegations of corruption. In June 2011 President Dilma weathered the government’s first corruption scandal, when her chief of staff Antonio Palocci resigned due to the controversy surrounding his money-making activities as a consultant prior to taking office. In the ensuing eight months, the Palocci incident was followed by other allegations of personal and party corruption in the Ministries of Transportation, Agriculture, Tourism, Sports, Labour, and Cities. These scandals led to the resignations, in the second half of 2011 and the beginning of 2012, of the Ministers of these Ministries. In some cases, lower-level officials were also investigated and dismissed (Fleischer, 2012).

These revelations of corruption were not the result of a systematic sweep by the Dilma government. They came about due to media investigations. However, by responding to them quickly and decisively, President Dilma was able to enhance her popularity. In late 2011 her approval rating hovered around 70 percent, higher than that enjoyed by President Lula at a similar point in his presidency. The scandals also allowed Dilma to rebalance the complicated coalition that supports her in Congress. Many of her ministers had been given their jobs by Lula – it was Lula who constructed the alliance that brought Dilma to power. The departure of some of these ministers allowed Dilma to replace them with people more to her liking. However, there is probably a limit to the benefits that Dilma can extract from further corruption scandals. Continued allegations of corruption and the departure of more government ministers might eventually reduce, rather than increase, President Dilma’s popularity, because Brazilians could eventually begin to question the judgment of the President herself, and the overall quality of her government.

Economic growth is central to Dilma’s chances of success, yet growth is not assured in the current global climate of recession and sovereign debt crises. If the Dilma government achieves growth commensurate with recent history and Brazilian expectations (about 4–5% per year), maintains inflation below the Central Bank’s ceiling (about 6.5% per year), and further reduces poverty and inequality, her chances of success will be high. A well-managed World Cup in 2014 could pave the way for her re-election. But it is by no means certain that this will be the destiny of her government. Politics is a fickle business, luck is sometimes as important to good results as skill, and some of the long-term structural challenges facing the government are daunting. In particular, in culture, media regulation, environmental policy, human rights, defense, public security, trade, and the macro-economy there has been a continuation of the mildly progressive reformist legacy of the Lula years, but also the emergence of new problems. There will be much to watch for in the coming months, before Brazil’s mayoral elections in October of 2012 and until the presidential election of 2014.