“A less favourable global scenario – as the main source of the Brazilian economic miracle – will create better conditions for those who want Lula to follow former Chilean president, Ricardo Lagos, in his rapid rising and subsequent free fall into political disgrace”, written by Carlos Salas Lind.
While Lula was becoming the favourite presidential candidate in 2002, the international market was suffering a deep lack of confidence, which unleashed a capital leak and a sharp depreciation of the Brazilian currency “real”.
Few months were necessary for Lula – a radical syndicalist leader – to convince the financial and business world that his party – the Workers’ Party – would integrate the employees’ interests in order to deal with serious and extensive social problems for years accumulated. “The New Treaty” implied moving away from formulas that could trigger a bigger economic damage to a country of great inequalities, and which was also dependent on a regional and global current model of growth.
Lula – as well as the former Chilean president Ricardo Lagos – looked for alliances that outlined a governmental project towards the centre. Strictly following macro-economic policies – which support a model based on the stability of prices and fiscal balance – the return to investments and the recovery of the economic activity became possible.
The combination of orthodox economic policies and progressive social policies caught the attention of several civic sectors – which from different fronts – have valued the promotion of higher interests. Indeed, the merit lies in the fact that Lula created an economic reality that made possible the coexistence of a strong competitive economy and tight fiscal policies. Lula’s recipe reduced and froze his detractors at both ends of the political spectrum.
In Brazil as well as Chile, the increasing popularity of both presidents has been faced with constitutional restrictions which prevent re-election from happening (for third and second consecutive time, respectively). In both cases, Lula and Lagos concentrated their forces in extending their influences, and passing on the presidential position to someone who would surely continue the project facilitating their return.
Furthermore, emulating the Chilean context, Lula is preparing to ratify his leadership by handing over command of the most important country in the region to a woman. With a past marked by the resistance to one of the many dictatorships the continent suffered during late 20th century, Dilma Roussef echoes the circumstances that framed the eruption of Michelle Bachelet on to the Chilean political scene.
By visiting the voting places, Lula was perhaps subject to the same support that encouraged Ricardo Lagos to run again for presidency in the following elections. Lula never denied that wish– nor did Lagos – at the end of a “socialist” government which surpassed the people’s expectations. However, moving away from power and the strong questioning about his administration did not follow the line of the former Chilean president.
With only two months to go before handing over the command, there are some worrying signals for the Brazilian economy which could also predict a less favourable scenario for Lula’s electoral ambitions.
In the case of Brazil, the same external scenario – which made possible the employment and the implementation of policies with a strong social impact – is fading before the aggressive strategy – which is destined to reinforce competitiveness of exportation – and that is being been adopted by an increasing number of world economies.
The constant appreciation of the real (facing the devaluation policy started by other exporting powers), threatens the high development line the Brazilian economy has experimented during Lula’s second presidential period.
The point is that a less favourable global scenario – as the main source of the Brazilian economic miracle – will create better conditions for those who want Lula to follow Ricardo Lagos in his rapid rising and his subsequent free fall into political disgrace.