At first glance, the first year of Lula’s third term as President of Brazil seems to have been a success: the largest country in Latin America now enjoys political and economic stability, the entourage of radical right-wingers around former president Jair Bolsonaro is on the defensive, and Brazil has regained its status as an authoritative presence on the international stage.
Andreas Behn directs the Rosa Luxemburg Foundation’s São Paulo Office.
This success, however, is volatile. Brazil’s Congress is dominated by conservatives who are limiting the ruling Workers’ Party (PT) and constantly forcing Lula to make compromises, especially when it comes to economic and social policy. Maintaining this balancing act between progressive aspirations and liberal realpolitik is costing him political support and could turn the tide in the favour of the Right.
When Luiz Inácio Lula da Silva took office on 1 January 2023 after a narrow election victory against Bolsonaro, it was by no means a foregone conclusion that the first year of his presidency would be net positive. Just one week after the election, a mob stormed the government district in the capital city of Brasilia and unsuccessfully tried to prevent the democratic transfer of power. The scenes of this destructive rampage cost Bolsonaro and his party a great deal of popular support.
The subsequent legal prosecution, which included long prison sentences for some of the ringleaders, combined with a steady stream of new revelations about the corrupt machinations of the Bolsonaro clan, have kept the extreme right somewhat in check to this day. Despite the fact that this extreme right has maintained its positions in Congress and its staggering influence via social media, it has failed to win back the momentum that enabled it to work alongside the traditional right wing to impeach Dilma Rousseff in 2016. Following Rousseff’s ousting, the long-time parliamentary backbencher Bolsonaro was crowned the election winner in 2018.
The alliances and divisions within the Right are pivotal not only for Brazil’s future, but also for radical right-wing experiments in other countries, such as the one now underway in Argentina. In 2016, Rousseff’s impeachment was initiated by the traditional, business-friendly Right. Their aim was to return the country to a strict neoliberal path after 14 years of social democratic policies implemented by the PT. The mainstream press pursued a smear campaign which centred around charges of corruption, and the Supreme Court judges approved Rousseff’s removal from office and later Lula’s imprisonment. However, things turned out quite differently than expected: the neoliberal Brazilian Social Democracy Party (PSDB) only received 5 percent of the vote in the 2018 election, leaving the far-right Bolsonaro to claim victory.
All in all, pragmatism prevailed in the first year of Lula’s third term in office. The new, old president reversed many of the worst mistakes of the Bolsonaro government, including several laws which made it easier to own guns or which granted political privileges for the military.
Shocked by the Bolsonaro government’s blatant hostility to democracy, these same constitutional judges would later overrule many of the decrees and anti-democratic politicking he and his party had implemented — some of which was no doubt legally questionable. When Lula took office, the law started to come down hard on right-wing extremist activities. In 2022, faced with the choice between Bolsonaro and Lula, even the majority of the press that had formerly opposed the Workers’ Party came to side with democracy.
In this context, Lula managed to forge a political alliance between a wide range of parties, from the Left to the far right. This tenuous arrangement, which is unique in the Latin American context, enabled him to win the election by a narrow margin.
The complexity of this starting point explains why Lula’s hands are tied in terms of politics and executive leadership — something which distinguishes this term from his first two terms in office from 2003 to 2010. His government alliance includes strong right-wing forces that reject any strengthening of the welfare state. Alternatively, they embrace clientelism, which means their ideology does not hinder them from snatching up state sinecures for the benefit of their own electorate.
Furthermore, in day-to-day politics, clear lines of separation have not been established with the equally strong radical right-wing opposition, which includes the influential segment of the conservative Evangelical churches. In practice, the outcome of all this is that instead of signalling compromise, every concession made by Lula leads to new demands from the right wing.
Doing What’s Necessary
The Left has also been unable to regain its previous strength, and remains mired in the tensions playing out in the aforementioned constellation of powers. After realizing that it would be necessary to form a broad, right-wing alliance in the lead-up to the presidential election, many concluded that being overly critical of Lula’s compromises was likely to play into the hands of the extreme right. In the face of this threat, the progressive spectrum adopted governability as a guiding principle.
Nevertheless, many sense that there has been a significant increase in the potential for grassroots politics. Instead of focusing on mobilization and protest, social movements and left-wing organizations are working to develop a new agenda they hope will help modernize the rather conventional programme of Lula’s PT. Some of the most important components of this agenda are modern urban policy, anti-racism, socio-political approaches that extend beyond redistribution and aid payments, and finding new ways to organize workers in the platform economy beyond the traditional models of trade union organizing.
All in all, pragmatism prevailed in the first year of Lula’s third term in office. The new, old president reversed many of the worst mistakes of the Bolsonaro government, including several laws which made it easier to own guns or which granted political privileges for the military. On top of that, Lula reinstated measures like the quota system at universities and the successful Bolsa Familia social welfare programme, along with establishing councils which facilitate a broad participation in political decision making within civil society.
Renewed state policies protecting minorities have been put in place, deforestation in the Amazon region is declining for the first time in a long time, and a tax reform that had been frozen for 30 years has even been passed — albeit without any increase in taxes on the rich. Inflation is under control, economic growth is measuring at a considerable rate of around three percent, and the absurdly high interest rates have been lowered. The privatization of large state-owned companies has been stopped in its tracks, and the national minimum wage has risen substantially.
The Power of Agribusiness
Overall, the number of gains outweighs the setbacks of the past four years. However, this belies the fact that the Lula government is powerless to act on many important issues.
For example, the president recently had no choice but to sign a law approving the use of pesticides, many of which are banned in the EU. The agribusiness lobby was able to have its way because it exerts substantial influence over the right wing in both the opposition and government camps.
Something similar happened in the dramatic tug-of-war over the so-called Marco Temporal (“Time Frame Thesis”), a legal theory arguing that indigenous peoples are only entitled to the demarcation of their traditional lands if they inhabited them before 1988. Although Brazil’s Supreme Court had ruled the theory unconstitutional, Congress overturned this ruling and enshrined it into law — an affront to the judiciary, the government and, above all, the indigenous people who have been fighting for the rights to their land for decades.
It must be considered his personal success that upon taking office, Lula was welcomed everywhere as a long-lost partner who could be taken seriously.
Within the current constellation of power, Lula stands no chance against agribusiness, the majority of which is a stalwart ally of Bolsonaro. As a result, there is a stalemate on issues such as the extremely unfair distribution of land, environmental and climate policy in rural areas, as well as on subsidy policies. In any case, the state is injecting more capital into agribusiness — ostensibly the most dynamic sector of the Brazilian economy — than ever before.
The situation is similar when it comes to government spending and the welfare state. Finance Minister Fernando Haddad has only been able to partially revise the Brazilian version of the debt brake, which interim President Michel Temer implemented in 2017, putting a cap on government spending on health, education, and social welfare. As a result, the government has little room for manoeuvre in terms of social policy, state investment, and a demand-based orientation in economic policy. Unfortunately, precisely this focus was and is Lula’s recipe for success, and it would also allow him to maintain his grip on power and a high approval at the polls, especially among the poorer majority of the population.
The neoliberal consensus that dominates throughout the right-wing spectrum is forcing Lula to focus on the rather conventional goal of economic growth in order for him to be able to have the slightest hand in shaping a redistribution policy. As a result, the fight against hunger — which became a pressing issue in the country after Bolsonaro and the pandemic — has been put on the back burner, corporations have managed to strengthen their influence on economic policy, and Lula’s already waning commitment to environmental and climate policy has been curtailed. This is why it comes as no surprise that the 78-year-old is pushing ahead with the development of new oil reserves in the Amazon region.
Multilateral Foreign Policy
The only area in which Lula can be said to have a free hand is foreign policy, something that is hardly given much attention by the balance of forces in Brazil, given its continental significance.
It must be considered his personal success that upon taking office, Lula was welcomed everywhere as a long-lost partner who could be taken seriously. The fact that his positions on the wars in Ukraine and the Middle East have been met with incomprehension in the West is primarily due to the ignorance that prevails there: Brazil has always insisted on an independent foreign policy and regards itself more as a mediator than an arms supplier.
Nonetheless, global polarization also indicates dangers in this regard. For almost 15 years, China has been Brazil’s most important trading partner and, as a member of BRICS, Brazil represents a multipolar world order, despite its close cultural ties to the West. If there is increased pressure to choose sides, Lula would lose a vital source of international support.
The likely failure of the negotiations on a free trade zone between the EU and the Mercosur states will also drive a wedge between the two regions that extends far beyond all criticism of the draft of the liberal economic treaty. For his part, Lula has advocated in favour of the agreement, despite his reservations.
Although Brazil explicitly backed South Africa’s genocide allegations against Israel in January, it can be assumed that at the international level, the Lula government will continue to focus on contributing to a balance between forces rather than polarization. However, this has yet to succeed at a domestic level. Politics and society are still divided, and there is little to no rapprochement between the two camps.
Lula cannot be blamed for this, as it is widely acknowledged that this polarization benefits the Right in particular. That said, a balance sheet of Lula’s first year back in office must take note of the fact that he has not yet solved this challenge.
This article first appeared in nd.aktuell in cooperation with the Rosa Luxemburg Foundation. Translated by Hunter Bolin and Bradley Schmidt for Gegensatz Translation Collective.