The Workers' Party and Political Crisis in Brazil: Lula at a Crossroads?
— Gianpaolo Baiocchi
IN JUNE 2005, the first allegations of a rogue politician in a rightwing party in coalition with Brazil's governing Workers' Party (PT) seemed spurious enough. The politician himself, Roberto Jefferson, had a long history of allegations of corruption, and of narrowly escaping indictment in Brazil's last corruption crisis in 1993. According to celebrity magazines, he had had a makeover, including plastic surgery, before coming forward with the allegations of a "payment for votes" scheme in congress in which the ruling PT doled out a monthly allowance for sympathetic politicians in congress.
The allegations seemed so absurd, and so at odds with the image of the Workers' Party as a party of ethical political outsiders, that the first reaction by many inside and outside the PT was to denounce Jefferson and the media as organizing a conspiracy and attempting a coup against the people's president. This was an effective strategy until corroborating testimonials started to come in.
What developed over the next six months in Brazil strained credulity. Fact after fact appeared to corroborate some of the allegations, and the crisis grew to embroil many important players in the PT. Allegations extended to malfeasance in the running of the national oil company, national telecommunications and post office, as well as claims to the existence of secret accounting mechanisms by which the Workers' Party had used to circumvent election campaign laws. The political theater that followed included hours of live televised debate of the Congressional Inquiry Commission. Streets emptied as they do when the national soccer team plays.
It was the worst crisis of the administration, and the low point of the history of the PT. The evaluation of the administration sank, and the media began to tout the beginning of the end of the party, sounding the death knell for Lula's "adventuresome" years in office and his meteoric career from dissident labor organizer in the late 1970s to president of the world's ninth largest economies. The crisis compounded the humiliating defeat at the 2004 municipal elections, which threw out of office several important PT administrations; and all this followed the crisis leading to the expulsion of four parliamentarians in 2003 as a result of an internal fight over pensions and the country's economy.
Six months after the first corruption allegations, the crisis began to dissipate. Lula himself appeared to emerge relatively unscathed, not directly connected to allegations of corruption. Congressional inquiries, in the end, did not find documentary evidence of the most serious allegations of bribery, even if the PT faced some losses: four parliamentarians were expelled from Congress, the head of the civil house, José Dirceu resigned, and a few members of the party (including its treasurer and president) lost their posts.
PT insiders admitted to a parallel accounting mechanism to circumvent campaign finance, which will result in fines. As a result of the crisis, the party also lost its dominance in congress, faced some additional publicized defections, and suffered, perhaps, its greatest casualty: it lost its image for many Brazilians of all classes and all ideological orientations as an ethical party and as a party of outsiders. This trump-card had for many years carried the PT to victory in local and state elections and was central to Lula's victory, as it made a party of formerly "bearded radicals" palatable to middle-class and elite Brazilians who would tolerate some redistributive policies as long as it was part of good, clean, governance.
Lula's government returned to the levels of popular approval prior to the crisis, and projected election results show Lula comfortably beating most of the possible opposition candidates (Bloomberg.com, June 2 issue, reports that a first-round victory for Lula in October seems likely though not certain. The deadline for announcing candidacies is July 5 - ed.). But what is different about the current scenario is that now, unlike a year ago, sympathies for Lula have become more polarized. Lula's strategists realize this, and the administration has begun to make explicit overtures to the country's poor majority, where Lula's support is the strongest.
Among the poor half of the country's population, approval for Lula and his administration remains high; among wealthier segments, support drops off. The internal balance of power within the PT has also shifted to the left with the discrediting of the centrist groups within the PT closest to the administration and to the allegations of corruption. The balancing act of the Lula administration up until now, based on implausibly broad coalitions with center and right-wing parties in congress, appeasement of powerful business interests and delivering little but pleas for patience from his organized and increasingly impatient base of support, appears to have outlived its electoral usefulness.
The Origins and Evolution of the PT
It is an accepted fact that Lula's national victory in Brazil's presidential elections of October of 2002 marked a turning point for Brazilian democracy. The election of a militant labor leader and political prisoner of humble origins was in many ways unprecedented and was met with great expectation, especially from the country's poor majority who helped propel one of their own to power.
For PT activists this marked the end of a long quest for national power that had eluded them in 1989, 1994 and 1998, and included years of grassroots organizing and two decades of managing local administrations of all sizes. Shortly after the election, Lula received a genuine hero's welcome at the World Social Forum in January of 2003, talking before thousands of adoring activists from the Global North and South.
Two years later, at the next Forum, when Lula spoke again, the reception was very different. PT activists had to pack the stadium to prevent hecklers, and Lula was constantly interrupted by the audience. The Forum also featured the visible presence of well-known dissidents who had abandoned the party in the previous two years, including some of its founders such as well-known intellectual Chico de Oliveira, and members of the new PSOL, The Party of Socialism and Liberty, founded by defectors from the PT as a direct result of conflict over the administration's "pragmatic" economic policies. Before that it faced national strikes by civil servants over pension reforms, and continual strife with landless peasants.
Much discussion in Brazil today revolves around Lula's own "about-face" and the seductions of power, or about the impossibility of doing much in the current global moment. It is true that the PT's platforms have in recent years steadily moved away from mentions of socialism, and that the threat of capital flight is real. But rather than comparing the national administration to the militant rhetoric of Lula or the PT's founders in 1979, if we consider the practices of the PT in executive power in recent years, a different contrast emerges.
What is distinctive about the national administration is not so much economic pragmatism, but the abandonment of one of the hallmarks of the PT in power, its creative forms of empowered popular participation that accompanied an admittedly growing economic pragmatism. A careful look at the PT in the last few years shows its transition, defined not so much by moving to the ideological center, nor by its set of economic policies per se, but by its rupture with the principle of direct, popular input into decision-making in such matters as the federal budget or national economic priorities.
Instead, Lula's administration has been forced to seek broad parliamentary alliances on one hand, even while it came into increasing conflict with organized sectors in its base of support - the very social movements that played such an important role in bringing the PT to national power in the first place. Early administrations of the PT found themselves in insoluble dilemmas, having to seek parliamentary alliances and distort the party's goals in order to carry out a modicum of effective governance. For early administrators the choice was between governance or social justice, essentially a choice of how to be voted out of office. Popular participation proved a temporary alternative.
From its founding in the late 1970s the PT's ideology embraced sometimes contradictory elements like workerism and class-consciousness, a participatory democratic ethos, a commitment to social movement autonomy, and a "vocation to govern" - social movement demands for better access to government services. If what drew attention to the PT in the 1980s was its novelty as an internally democratic leftist party that did not seek to dominate social movements, what emerged in the '90s was its model of local governance.(1)
This model, enshrined as the "Democratic Thesis" in the 1999 party congress, allowed local level PT administrations to govern without having to succumb to excessively broad legislative alliances or to excessive infighting among its bases of support. The PT administrators crafted in the 1990s a model of participatory governance that managed to harness the creativity of civil society while continually expanding the party's bases of support and its arenas of concern.
Early attempts at governance in the 1980s and in the early 1990s often ended in a series of endemic problems: splits between party factions; conflicts with organized bases of support; the inability to govern with a minority in local legislatures; and a distrust from segments of the population who only experienced the resulting failures of governance, such as week-long bus strikes. Some administrators, as in the city of Santos or in Porto Alegre, nonetheless successfully implemented participatory programs as a strategy for negotiation of demands and legitimation of platforms with the population at large in ways that helped avert some of the conflicts. In best-case scenarios, participation provided solutions to some of these dilemmas of "radicals in power."
Successful programs like Participatory Budgeting in Porto Alegre created settings where claimants themselves could be part of the negotiation of demands; in terms of governance, this generated legitimacy for strategies of governance, if not improving governance directly.(2) By bringing conflict to be resolved into participatory settings, administrators found ways to generate consensus around redistributive platforms, and helped prevent conflict against the administration. Participatory Budgeting in time became a widely applied form of the "PT way of governing."
Little Participation, Much Conflict
In an atmosphere of festivity that dominated Brasília in early 2003, Lula marked the beginning of his administration with a series of symbolic acts. One was to institute the Council for Economic and Social Development, thereby enshrining popular voice in the national administration. In addition, a consultative process on national budget drew on veteran local PT administrators with participatory experience in prominent places in the administration.
These and other efforts, however, have been marred by administrative inconsistency, lack of clarity about the role of popular input, and the relegation of ultimate decision-making to the administration itself. Instead, the national administration found itself seeking support in broad coalitions with parties from the center and from the right. In doing so, it doled out posts and compromised on policy and legislation, yielding a national administration that is not only difficult to comprehend as a PT administration, but that also lacked coherence. Some ministry posts were occupied by conservatives from outside the PT, and others by radicals from within.
The results: stalled and contradictory policies. The national administration has made tremendous advances for Black and Human Rights causes, bringing issues to light, such as the fate of maroon (runaway slave) communities, that no politician in Brazil has been willing to touch in over a century.
The contradictions are visible in the very functioning of the supposedly participatory CDES. The CDES was set up to create a state-civil society dialogue to foster a "new social contract."(3) Roughly modeled on similar national councils in social-democratic countries, the CDES includes representatives from government, business, trade unions, and civil society, in addition to the presence of twelve ministers. Headed in its first year by Participatory Budget architect Tarso Genro, the CDES was heralded as an "important instrument" for making debate surrounding policy questions more democratic.(4)
Unlike instruments like the Participatory Budget, however, the CDES is not vested with decision-making power and participation in it is limited to a few civil society representatives, and has been criticized for allowing little room for participant-initiated agenda items.(5) In addition to allowing the administration to articulate a coalition to support its structural reforms, however, the CDES has accomplished little. For example, after a series of meetings in 2003 on macro-economic policy, the council proposed "reducing interest rates and increasing public investment"(6) but most of its economic proposals were not taken up.(7)
Similarly, the PPA - Plano Plurianual, or Multiyear Plan - held for some the prospect of creating a participatory process on national investment priorities. A process of consultation with civil society took place in all 27 states, and culminated in a proposed PPA in August of 2003. The PPA was extensively modified by both the executive and by congress, resulting in a final document that privileged certain exporting industries such as mining and agroindustry, and includes dam construction projects heavily criticized by civil society watchers.
The executive branch in fact submitted a 2006 budget to congress unrelated to even the modified PPA. Like the CDES, the PPA process invoked the language of participation, but had an unclear mandate as far as linking that participation to decision-making. Like the CDES, it became a process that included consultation but mystified "technical decisions" such as interest rates or budgetary priorities as the exclusive realm of government technocrats.
The first three years of Lula's administration were a high-wire balancing act, with external constraints and national-level compromises limiting the government's agenda. Part of the balancing act has been to allay "investor confidence." The country risk rating that had shot up with Lula's first gains in the polls in 2002 was eventually lowered, and foreign investment in Brazil has continued apace after a relative decline in the first months of the administration.
The "Argentina Scenario" was thus averted, there has not been a return to inflation, and the real has held steady against the dollar. Brazil continues to make its debt payments, and already in the end of 2004 there were some signs of the recovery of some economic growth. But as the administration's critics have been quick to point out, the policies carried out by the PT government are essentially indistinct from the previous regime's, and at odds with the party's social movements base of support or its programmatic goals of redistribution and social justice. They have done little to ameliorate social problems, with little reduction in unemployment or much increase in real wages since Lula's election.
The government's overhaul of an outdated pension system as a means to balance the books was certainly viewed with suspicion by some of the left, as was its controversial decision to exceed the target primary budget surpluses set forth by IMF requirements. As a result the first three years were characterized by limited government investment in the national economy, let alone social spending on health, education and housing. Many PT activists found themselves disappointed with the scope of national social programs, such as the one on land redistribution that were part of the campaign platforms.
It is not surprising that the national administration has had its share of difficulties with its base of support. From March of the first year the Landless movement, MST, launched a wave of land invasions and occupations of government offices to signal that its "wait-and-see" attitude toward Lula's promises of agrarian reform would be coming to an end. The MST has become impatient with Lula's slow pace in actually implementing land reform.
After the MST invaded an 800-hectare piece of land that was 40 km from the presidential palace in Brasilia, Lula sped up his calendar to meet with the MST to July 2, 2003. At that meeting, Lula agreed to look over the MST's 19-point program, which among other things demanded that 120,000 campesino families be settled that year, and that land be given to one million campesino families by 2006. Those demands were not met, and in early 2004, the MST gave Lula another six months to implement his campaign promise of land reform, and in 2005 it organized the National March for Land Reform.
In response, in May 2005 the administration announced a National Plan of Land Reform, which among other things promised to settle a total of 400,000 landless families by the end of 2006. At the time of this writing, the administration claims it has settled a total of 250,000 families, a figure vigorously contested by MST leaders who claim the actual figure is closer to half that number. And while this would still be several times the number of actual families settled by the previous administration, it does little to seriously alter the overall pattern of land concentration in Brazil.
Similar ambiguity marks the relationship of other social movements to the administration. The National Coordination of Social Movements, for example, was founded in 2003 bringing together over one hundred movements like the MST, National Student Union (UNE) and CUT. It held its first demonstration in September 2003 in conjunction with a continental day of action against the FTAA and the WTO. The movement is in "favor of national sovereignty, development, jobs, income distribution, and social inclusion." It has organized "public hearings" on FTAA, and carried out several actions in favor of a change in the national political economy, in favor of an audit of the national debt, and asking for a voice in the national administration.
One of the Lula administration's responses has been increasing expenditure on income redistribution programs throughout 2005. By the end of the year, over 8 million of the country's poorest families were receiving direct cash transfers, a program that in itself reduced the number of families in direst poverty by several percentage points.
Early on in the administration, party leaders passed a resolution that bound all PT representatives in the Congress and Senate to supporting the Lula administration's economic policies. The "radical wing" of the PT nonetheless fought the pension and tax reforms, and has consistently criticized the policies of the central bank. These issues came to a head in July and August of 2003 over the struggle to pass the administration's pension reforms.
Four parliamentarians who voted against the administration were expelled by the end of the year, while eight others suffered sanctions. The expulsions not only led to the founding of a splinter party, the PSOL, but tainted the party's image of internal democracy. Shortly after the expulsions, a group called "Workers Party Rescue" consisting of approximately 2,200 PT members and "University allies" released a manifesto denouncing Lula, saying his policies mirror the IMF more than the PT's socialist traditions.
Re-imagining the PT
Despite recent scandals and difficulties with its own bases of support, Lula's approval rating as mentioned before has bounced back to pre-scandal levels. Preliminary surveys also show a sharp polarization of the vote: the poor strongly favor Lula, while middle classes do not. The remaining few months of the administration will be crucial, not only in possibly assuring reelection, but also in the opportunities to redirect the political trajectory of the administration. No one denies that the PT has faced a monumentally difficult task in managing a national economy that is so heavily indebted, and currently so dependent on foreign investment and under IMF strictures.
On a global stage, Lula's actions range from symbolic, such as labeling poverty a "weapon of mass destruction" at the United Nations opening session in 2005, to a novel South-South foreign policy that attempts to create a counterweight to Brazil's powerful neighbor to the North. Today, bourgeoning radical regimes from Uruguay to Bolívia have more room to manouver free of direct US intervention because of the presence of the PT in power in Brazil. Further, Lula has been instrumental in creating the G-20, has been a tough negotiator for the global South in settings like the Cancun rounds of the WTO, and has fostered novel Brazil-Africa links.
This relatively positive balance sheet in international affairs is offset by the situation in Haiti, with some 1200 Brazilian "peacekeepers." Their original positioning was questioned by few, as it seemed innocuous when Brazil volunteered to head the peacekeeping effort in Haiti after most of the fighting in 2004 was over. It is speculated that this venture was related to Lula's ambition to gain Brazil a seat on the UN Security Council.
One positive aspect of the Haiti mission was that the Brazilian proposal for election procedures prevailed over French and United States ones, and allowed the recent victory of Rene Preval to go through (after the Haitian masses intervened to prevent a fraudulent count). But for the rest the mission has accomplished little: Brazilian troops are untrained and ill-prepared for reconstruction; proposals by the MST and Via Campesina that Brazil send doctors and agronomists (on the Cuban model) went unheeded; and now that civil society in both countries demands a Brazilian pullout, the administration refuses to give a timeline.
Brazilian troops have been involved in little fighting, but now stand as a police force looking more and more to local residents like an occupation army. Activists in Brazil have been calling for a pullout from Haiti and describing the situation, with some exaggeration, as "Brazil's Iraq."
Lula in short may well go down in history as a Latin American Nasser or Nehru, but with a more timid regime at home. There have been undeniable domestic innovations, such as the government's serious discussions of race relations, and the large numbers of families on income transfer programs, but this is offset by disappointing land reforms and the denial of popular voice in the direction of the economy.
Interest rates in Brazil continue to be among the highest in the world. Financial speculators and foreign investors benefit from this, and capital inflows continue to be high; but high interest rates also stall national economic growth and limit access to credit by small businesses and working and middle class families. Despite some formal attempts at popular participation, direct participation into the direction of the economy as one might have expected from a PT administration was never realized.
The record of these last three years in power is not proof of the PT's inevitable slide into "Tropical Blairism," as some have described it. But it does highlight the contradictory path the party had been on since it not only became a party where social movements could speak, but also knew how to pave streets and win votes by negotiating with broad sectors of society. And while the party arrived in Brasília in 2003 with a history of growing economic pragmatism, this was buffered by the party's increasing adoption of participatory mechanisms as central to its platforms and programs.
Twenty years of progressive municipal and state-level administrations of the PT decisively contributed to the country's democracy, as these administrators introduced to public discussion in Brazil the idea of popular participation, transparency and progressive governance. That the national administration did not adopt the party's trademark participatory schemes is a result of the internal political game within the PT and its reliance on parliamentary alliance and compromise.
As of this writing, the administration has announced intentions of expanding land resettlements and capitalizing on the income transfer programs. Filling bellies on TV may help the party win, but to carry out its project of progressive social reforms the government will have to not only feed the hungry but invite them to the table to set that agenda. It will have to also make stronger commitments to the social movements who elected the PT in 2002 and who have spent the last four years also shut out of the administration.
In 2005, the party turned out over 300,000 members to vote in internal direct elections, and those elections shifted internal politics to the left. The "socialist refoundation" platform did not carry the day, but one of its authors, former Porto Alegre Mayor and leader of the largest Trotskyist tendency within the PT, Socialist Democracy, became its secretary-general.
The party may decide to go with the people in the end. But going with the people should mean more than an income redistribution program - it should also mean following up on land reform, adopting a different political economy, and most of all, opening up the state for real, popular input, as the Workers' Party taught the world was possible.
Social movement activists also find themselves in a curious position - they know they are better off under a national PT administration than under other parties, but much of their experience these last three years has been disappointing. Just as activists within the PT had the imagination to create a party that did not dominate social movements, they are now faced with the task of imagining a double game of supporting the administration against more conservative forces, while actively opposing some of its policies until real space is opened in the national administration.
- The now-classic English language work on the PT's founding and evolution is Margaret Keck's The Workers' Party and Democratization in Brazil (1992: Yale University Press). In Portuguese, Rachel Meneguelo's Partido dos Trabalhadores.
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- See my Militants and Citizens: The Politics of Participation in Porto Alegre (2005: Stanford University Press) for a case study.
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- See the November 2003 interview of former council-head Tarso Genro. http://www.sindpd.org.br/noticias/11-11_decisao.asp (accessed December 10, 2004)
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- Gazeta Mercantil, August 20th 2003.
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- Gazeta Mercantil, October 23rd 2003.
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- Gazeta Mercantil, August 20th 2003.
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ATC 123, July-August 2006