‘MY GOVERNMENT will be for the excluded, the discriminated, the humiliated and the oppressed.’ Those were the words of Brazil’s new president, Luiz Inacio ‘Lula’ da Silva, who took office this week.
No wonder millions of people in Latin America’s largest economy were hoping that Lula’s presidency heralded change for the better. But Lula’s key ministerial appointments, and his insistence on working within International Monetary Fund (IMF) imposed policies, have already set his government on a course likely to dash such hopes.
Lula won the presidential election last October with 61 percent of votes. It marked a huge change in a country where politics has always been dominated by rich bankers and businessmen, or by the military. Lula made his name as leader of a huge strike wave in the late 1970s and early 1980s.
He became leader of a new party, the Workers Party (PT), which emerged from those struggles. Both Lula and the PT have moved a long way from their origins. The PT, though, retains a real mass base and a very significant left wing, and is open to pressure from wider social movements with which it has strong links. Lula moved sharply to the right in the run-up to the presidential election.
He dropped previous radical pledges, such as to refuse to pay Brazil’s $211 billion foreign debt. He also insisted he would honour a harsh agreement made by the outgoing government with the IMF.
Lula appointed tycoon Jose Alencar as his vice-presidential running mate. He has appointed Antonio Palocci as his finance minister. As the PT mayor of the city of Ribeirao Preto he became famous for pioneering the privatisation of public services.
Lula’s other key appointment is Henrique Meirelles as governor of the central bank. Meirelles is the former head of global banking at the US FleetBoston bank. Both IMF managing director Horst Koehler and US president George Bush have stressed that they can work with Lula. There are other pressures on Lula. Brazil is an important economy.
Neither Lula nor much of Brazil’s ruling class are happy about subordinating themselves to the US. Lula is likely to resist US pressures to go along with Bush’s Free Trade Agreement of the Americas plan, a neo-liberal scheme to benefit US business interests.
Lula backed a decision by outgoing president Cardoso to send a huge shipment of petrol to Venezuela in recent weeks. The shipment was to help the country’s president, Hugo Chavez, who is hated by the US, face down right wing opposition. The most important factor that could upset the bankers’ plans for Brazil is the pressure from millions of Lula’s supporters.
Such pressures appear to have been behind the breakdown of a planned government coalition of the PT and the PMDB centre-right party. The ministries earmarked for the PMDB went to people associated with the left of the PT.
The Financial Times commented, ‘This was an attempt to placate the PT’s radical left wing supporters.’
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