THE ROVING EYE The day Obama dreamed of being Lula
By Pepe Escobar
SAO PAULO - In his wildest White House dreams, United States President Barack
Obama swoops like an angel over the Jon Stewart/Stephen Colbert "Rally to
Restore Sanity" that brought at least 200,000 people to the Mall in Washington,
DC, this Saturday; he makes sure that "sanity" wins over "fear" - as it did,
with a lot of swing and swagger; and then he soundly falls asleep, knowing in
his heart that his Democratic party will overcome all shades of fear in
mid-term polls and keep his presidency on track.
Ooops. Wrong script. In fact "sanity" was what Brazilian, not American voters
chose on Sunday as they elected Dilma Roussef, of the governing Workers' Party
(PT), as the country's
first female president, with 12 million votes over her competitor, the
social-democrat turned tropical version of the Tea Party Jose Serra - or "Serra
Palin". Globally, Dilma's 56 million votes is the biggest victory of any
left-leaning coalition (11 parties) anywhere in the world.
This Brazilian presidential campaign was as ugly and nasty as the American
mid-terms - complete with interference from millions of powerful evangelicals
and even the Roman Catholic Church surreptitiously asking people not to vote
for Dilma because she favors legalizing abortion (personally, she said she
doesn't). Not to mention swift-boating techniques such as dubbing her a
"terrorist" because she fought against - and was tortured by - the Brazilian
military dictatorship in the late 1960s.
Obama's jaw must have dropped at the sight of the most popular political leader
in the world (over 80% approval rate), outgoing Brazilian President Luiz Inacio
Lula da Silva, whom he calls "the man", not only winning two elections in a row
(2002 and 2006) but managing to see the election of his chosen successor, a
hardworking but relatively faceless bureaucrat who until recently no taxi
driver could even name. Dream on, Barack. Well, not really, as the alarm in his
iPhone rings and he awakes to face the full extension of the debacle awaiting
the Democrats this Tuesday in the US.
Was it a vision, or a waking dream?
It's the economy, stupid. Obama could only dream of surfing the economic
indicators of the Lula years; per capita income growing by 23% from 2002 to
2010; unemployment at a record low of 6.2%; the minimum wage, adjusted for
inflation, growing by 65% - not to mention more than 20 million people lifted
from poverty and becoming middle class (compare to 40 million Americans been
plunged into the poverty line). As much as the American Dream is in Emergency
Room, the Brazilian Dream feels like Camelot remixed as a telenovela (with a
happy Hollywood ending). Who are these new South American dreamers who voted
Dilma? Essentially the urban working class, the sub-proletariat of the poor
northeast region, the new lower middle class and some substantial, progressive
portions of the classic middle class.
The Brazilian financial elite, concentrated in Sao Paulo, and directly linked
to Wall Street, obviously did not vote Dilma (nor did the City of London, via
the Financial Times; nor did the four families who control Brazilian corporate
media; nor did the Washington foreign policy establishment for that matter; the
list is endless). The neo-liberal financial elite are the people who actually
set Brazil's economic policy. One of Lula's touches of genius was not to mess
with them - as well as not having them mess with him.
But major trouble lies ahead. As Brazil maintains absurdly high real interest
rates, no wonder it's raining US dollars like there's no tomorrow. And still
Brazil is not growing as fast as the other fellow BRICs - Russia, India and
China. As much as millions of Brazilians this Sunday may have caressed the
illusion they were electing a project for the country, Brazil still badly lacks
a sound development strategy that really reflects the aspirations of the
majority of the population.
Time is running fast. In Lula, Dilma will have a certified globally respected
wise man with an invaluable baggage of 35 years of hardcore negotiating. For
his part, Lula in theory will now be free to conduct delicate political and
union reform and try to reorganize the complex Brazilian political chessboard.
Meanwhile, it's crash course time; Lula is taking Dilma with him to introduce
her to world leaders at the upcoming Group of 20 meeting in South Korea.
There are three possible ways ahead; Lulism without Lula; Lula running for
president again in 2014; or post-Lulism, with himself at the helm of the Union
of South American Nations (UNASUR) or even as secretary general of the United
Thus a hefty degree of schizophrenia will be in play – but that's very
Brazilian anyway. Dilma will bet heavily on Mercosur (Southern Common Market)
and South America's political integration - via UNASUR - while at the same time
aligning with the Western powers at the World Trade Organization.
The influential (and heavily demonized) Brazilian landless peasant movement
(MST) - a concept that should materialize in China would send the Communist
Party into a tailspin - officially supported Dilma in the run-of against Serra.
At the same time, Dilma will continue investing in controversial hydroelectric
projects accused of being eco-disasters.
Dilma will bet heavily on macro-stability and control of inflation - but at the
same time, as she already said, she won't cut social spending; won't cut
corners in upgrading the country's disastrous infrastructure; and won't waste
away the economic bonanza associated with the new offshore oil wealth found by
energy giant Petrobras in the pre-salt layers.
The key problem for Brazil is indeed to tweak this so-called "model" of
exporting a tsunami of iron ore, crude oil, soybeans and chemical wood pulp to
China, Brazil's biggest trading partner after it overtook the US. And all this
while manufacturing exports go down. Lula told Vale - the world's top iron ore
producer - to build steel mills. He told Petrobras to build refineries. But
still that's not enough.
To talk about Brazilian de-industrialization would be too early - because the
country's manufacturing base is very large. But China already all but killed
two very competent Brazilian industries - textiles and footwear (and look what
happened to the de-industrialized US). Just exporting commodities is not
enough; the game is to go for high added value, South Korean-style.
For this to happen, Dilma would have to do what even Lula would not dare; turn
Brazil's Byzantine tax system upside down. She has to go for hardcore
structural reforms - political, fiscal and agrarian. Lula couldn't do it
essentially because he did not have a strong-enough political base. Dilma may
have a shot at it.
Fiscal reform is essential because as in the US the wealthy get away with
murder while the salaried classes pay the bill. But the most complex issue is
arguably agrarian reform.
It depends on how one defines agrarian reform. Essentially, it is a state
policy to democratize land ownership. This never happened in Brazil. The local
bourgeoisie allied itself with landowners to basically export commodities. In
the process they expelled masses of peasants to the big cities. They could
always rely on an industrial reserve army; and the salaries they paid were
pitiful anyway. This process in a nutshell explains the rise and rise of urban
violence in Brazil.
What's needed now, as the MST argues, is a new type of agrarian reform, dubbed
"popular agriculture"; agro-ecology for the internal market, not for export,
and part of a new development model, with less foreign capital controlling
agro-business. If Dilma pulls it off, God will be known worldwide as a
As respected Brazilian theologian Leonardo Boff argues, there's no question
Brazil will be an essential player in the new, multipolar global chessboard
because the country holds all the key ecological factors which may be able to
re-calibrate the dilapidated Earth-system.
But it's too early to tell whether Dilma will be able to keep her eyes in the
Big Picture. With the not irrelevant add-on that the current Brazilian
trajectory may be leading to the formation of the first tropical global power.
Would it be just sub-imperial? Would it be just cordial? Or would it be a new,
mutant, unpredictable species of benign sub-imperialism?
Obama took time out of his ultra-hectic, pre-election schedule this Monday to
call Dilma, offer his congratulations and invite her to visit the US. At least
for a moment, he could indeed dream he was acting like "my man" Lula.