Brazil: The Débâcle of the PT by Alfredo Saad-Filho (pt)

Hundreds of thousands of chiefly white middle class protesters took to the streets in 
Brazil on 15 March in an organized upsurge of hatred against the federal administration 
led by President Dilma Rousseff of the Workers' Party (Partido dos Trabalhadores, PT). 
These protests are far more cohesive and better organized than the previous wave of 
anti-government demonstrations, in 2013; their demands are unambiguously reactionary, and 
they include primarily the country's elite. ---- The 2015 demonstrations erupted in the 
political vacuum created by the paralysis of Dilma's administration because of its own 
ineptitude and Brazil's worsening economy. Those difficulties were compounded by 
aggressive media reporting of the Lava Jato corruption scandal, focusing on a network of 
firms channelling vast sums to individuals and political parties through the state-owned 
oil company Petrobras. Readers should not underestimate this crisis and its devastating 
implications for the Brazilian left.

At a deeper level, the economic and political crises in Brazil are due to the achievements 
and limitations of the administrations led by Luís Inácio Lula da Silva (2003-06 and 
2007-10) and Dilma Rousseff (2011-14 and 2015-present). They led a partial economic and 
social break with neoliberalism that has delivered significant gains in employment and 
distribution, but also entrenched poor economic performance and left Brazil vulnerable to 
the global downturn. In the political domain, the PT has transformed the social character 
of the Brazilian state, while simultaneously accepting a fragile hold on power as a 
condition of power itself. There has been no meaningful attempt to reform the Constitution 
or the political system, challenge the ideological hegemony of neoliberalism, neutralize 
the mainstream media or transform the country's economic structure or international 
integration. The PT also maintained (with limited flexibility in implementation) the 
neoliberal macroeconomic 'Policy Tripod' imposed by the preceding administration, 
including inflation targeting and central bank independence, free capital movements and 
floating exchange rates, and tight fiscal policies. The PT administrations were limited by 
the 'reformism lite' allowed by their unwieldy political alliances. This strategy 
alienated the party's base and provoked the opposition into an escalating attack that came 
to the boil in March 2015.

Life before Dilma

Lula, the founder of the PT, was elected President on his fourth attempt, in 2002. For the 
first time Brazil was led by a genuine worker-leader. Lula's power was limited by a 
powerful Congress that is also fragmented across two dozen raucous and unreliable parties. 
The PT has consistently elected only around 15 per cent of Deputies and Senators, and the 
'reliable' left (including the PT) rarely exceeded one-third of seats. Consequently, Lula 
and Dilma have had to cobble together unwieldy coalitions prone to corruption - both from 
government, through pork-barrel politics, or from capitalists buying votes and funding 
rival parties fighting elections every other year. The PT had to manage this ungainly 
Congress under the gaze of an unfriendly judiciary, a hostile media, an autonomous Federal 
Prosecution and a corporatist Federal Police often working in cahoots.

The first Lula administration introduced moderate distributional policies, including the 
formalization of labour contracts, rising minimum wages and new transfer programmes. 
However, broader social and economic gains were limited by the government's determination 
to buy 'market credibility' through the dogged implementation of the neoliberal Policy 
Tripod. The ensuing policies constrained transfers, public investment and industrial 
restructuring, and promoted the overvaluation of the currency and the reprimarization of 
the economy.

Low GDP growth rates in the first Lula years frustrated everyone, especially the PT's 
traditional base. They felt that their concerns were being ignored and their support was 
taken for granted, while government officials schmoozed with bankers and industrialists. 
Even this apparent sell-out was insufficient to remove the political resistance against 
Lula, and his administration was criticized both for what it did ('packing up the State 
with acolytes' and 'taxing producers to fund sloth'), and for what it did not do (deliver 
rapid growth and social quiescence).

The political divide worsened over time. The opposition crystallized around a 'Neoliberal 
Alliance' led by the financial bourgeoisie (suffering economic losses and dwindling 
control of State policy), and populated by the middle class (tormented by job losses and 
its dislocation from the outer circle of power, and jealous of the economic and social 
rise of the broad working class), and scattered segments of the informal workers.

Accelerating economic growth because of the global commodity boom and Lula's political 
talent supported his elevation to spectacular heights. He balanced the demands of rival 
groups through his legendary shrewdness and the judicious distribution of resources 
through state investment, development funds, wages, benefits and labour law. The economy 
picked up speed, and taxation, investment, employment and incomes increased in a virtuous 
circle. The dynamics was sufficiently strong to support bold expansionary policies in the 
wake of the global crisis. By the end of his second administration, Lula's approval rates 
touched on 90 per cent.

Yet, the 'Lula Moment' was limited. Even though the neoliberal policy framework had been 
diluted, the government remained only weakly committed to the rearticulation of the 
systems of provision hollowed out by the neoliberal transition, and it was unable to 
diversify exports and raise the technological content of manufacturing production. Brazil 
created millions of jobs but they were mostly precarious, poorly paid and unskilled; urban 
services were neglected, manufacturing shrank, and there was alarming underinvestment in 
infrastructure.

Dilma Mark 1: Policy Zigzag

Dilma Rousseff was a revolutionary activist in her youth, and she rose through the ranks 
of the PT as a competent manager. She had never been elected to public office until she 
was chosen by Lula to be his successor. At a personal level, it is unquestionable that 
Dilma is the most left-wing President of Brazil since João Goulart was deposed in 1964.

Dilma's first administration shifted macroeconomic policies further toward 
neo-developmentalism. Interest rates fell, fiscal policy became more expansionary and new 
investment programmes were introduced. The government intervened widely to reduce costs 
and expand infrastructure, and BNDES financed an increasing portfolio of loans. Some 
capital controls were introduced, and the government expanded its social programmes aiming 
to eliminate extreme poverty. The strategic goal was to shift the engine of growth away 
from a faltering external sector and toward domestic investment and consumption.

This strategy failed. The international crisis tightened up the fiscal and balance of 
payments constraints; quantitative easing in the USA and UK destabilized the real, and 
global uncertainty and strident critiques of 'interventionism' limited investment. The 
public finances deteriorated, inflation crept up and GDP growth sagged.

Government perceptions that the economic strategy was not working, that its credibility 
was declining and that the external environment was unlikely to improve led to a policy 
zigzag in 2012, when Dilma's economic team leaned back toward the neoliberal Policy 
Tripod. Fiscal austerity returned, and the inflation target became increasingly important. 
This about-turn came too late to be effective, and too hesitantly to restore faith in the 
government.

Dilma's administration had to confront not only a worsening economy but also mounting 
political turmoil. Since Lula stepped down, the political hegemony of the PT depended on 
perceptions of 'managerial competence', the absence of corruption scandals, continuing 
growth and distribution, and stable political alliances. None was easily achievable under 
adverse economic circumstances; worse still, Dilma Rousseff never had Lula's political 
talent. She is allegedly impatient with her allies, intolerant with self-interested 
entrepreneurs and uninterested in social movements; she also intimidates her own staff. A 
vacuum emerged around the President just as the economy tanked. The media ratcheted up the 
pressure and started scaremongering about an impending 'economic disaster'; the 
government's base of support buckled and it became difficult to pass legislation. The 
judiciary tightened the screws around the PT, and successive corruption scandals came to 
light.

In early 2013, the opinion polls suggested that support for the government was falling, 
and, in June, vast demonstrations erupted. They exposed the tensions due to the economic 
slowdown, the government's isolation and its failure to improve public service provision 
in line with rising incomes and expectations. The middle classes also vented their fury 
against the widening of citizenship, changes in the State, transfer programmes, university 
quotas for blacks and state school pupils, labour rights for domestic servants, and so on.

As the economy halted, the government reverted more and more fully to the Policy Tripod: 
once pinned to the corner, the PT abandoned their own social and political base in order 
to try to please domestic, international, industrial, financial and agrarian capital. This 
was still insufficient. The government never had the support of the financial bourgeoisie, 
and was not about to gain it now. It lost the middle class because of its distributional 
and citizenship initiatives. It alienated the organized workers because of the worsening 
economic situation, corruption scandals and the policy turnaround. It distanced the 
informal workers for those same reasons and the limitation of the transfer policies. And 
it lost the internal bourgeoisie because of the economic slowdown, lack of influence over 
the President and erratic public policies. These groups were bestowed a semblance of 
coherence by a hostile media claiming that the government was incompetent and the State 
was out of control. Finally, the administration earned the hostility of Congress because 
of its inability to negotiate.

Dilma Mark 2: The Wheels Come Off

Dilma Rousseff was re-elected in 2014 by the narrowest margin in recent Brazilian history. 
Her victory was achieved through a last-minute mass mobilization triggered by left 
perceptions that the opposition would impose harsh neoliberal economic policies and 
reverse the social and economic achievements of the PT.

In the first weeks of her second administration Dilma faced converging crises leading to 
the collapse of the two axes of PT rule: the economic model and the political alliances 
supporting the administration. The government's earlier unwillingness to remove the Policy 
Tripod, the long global crisis and the insufficiency of the country's industrial policies 
fed the overvaluation of the currency, deindustrialization and a rising current account 
deficit. Balance of payments and fiscal constraints weakened the labour markets and 
induced inflation, and this vicious circle eliminated the scope for distribution and 
growth. Rising incomes in the previous period and insufficient investment in urban 
infrastructure led to an intolerable deterioration in service provision, symbolized by 
transport, in 2013, and water scarcity, in 2014-15. In both cases, the fulcrum was São 
Paulo, the country's largest metropolitan area, its economic powerhouse and - crucially - 
the bedrock of the political right as well as the birthplace of the PT.

Dilma's desperate response to these crises was to invite a representative of Brazil's 
largest private bank to the Ministry of Finance, and charge him with the implementation of 
a 'credible' adjustment programme. The government's weakness and its adoption of the 
macroeconomic programme of the opposition triggered an escalation of the political crisis. 
Another corruption scandal captured the headlines.

The Lava Jato operation led by the Federal Police unveiled a large corruption network 
centred on Petrobras and including cartels, fraud, robbery and illegal funding for several 
political parties, among them the PT. This scandal catalysed a mass opposition movement 
demanding the 'end of corruption' and 'Dilma's impeachment', even though there is no 
legal, moral or political justification for it. Examination of the opposition's grievances 
rapidly leads to a laundry list of unfocused and conflicting dissatisfactions articulated 
by expletives rather than logic.

The protests against Dilma's administration are doubly misleading. First, they pretend to 
want her impeachment, even though this is legally untenable, the bourgeoisie knows that 
this would disarticulate the economic 'adjustment', and the PSDB (the neoliberal Brazilian 
Social Democratic Party, the largest opposition force) has no interest in delivering power 
to Vice-President Michel Temer's centrist PMDB or allowing the PT to play the victim and 
recover in opposition, perhaps led by Lula. It is more convenient to keep Dilma as a lame 
duck President. Nevertheless, the next Presidential elections are still three years away, 
and the government could collapse unexpectedly.

Second, the demonstrations pretend to be against corruption in general, but this is not 
their target. The media and the opposition stress the financial flows involving the PT and 
downplay the involvement of everyone else, but almost every party and a large number of 
politicians are tangled up in Lava Jato and other investigations. They include the 
Speakers of the Chamber of Deputies and the Senate, the opposition leader Aécio Neves, and 
many more. For the media, only the PT matters, for two reasons: because scandals can be 
used to cut off the sources of finance to the Party, throttling it, and they can detach 
the PT from the internal bourgeoisie, that has supported and funded the Party since Lula's 
election. The detention of prominent executives and the CEOs of some of Brazil's largest 
construction and oil companies and the threat of bankruptcy against oil and shipbuilding 
firms because of the paralysis of Petrobras sends a clear message that the PT is not to be 
supported - or else.

The demonstrations against Dilma are not what they seem to be, and they are not about what 
they ostensibly demand. While they are presented as being against corruption and for her 
impeachment, they are actually about party political jockeying, shifting alliances between 
influential groups and disputes about political funding. At another level, the shrivelling 
of Dilma's administration signals the exhaustion of the political project of the PT: a 
historical cycle of the Brazilian left is now coming to the end.

Eight Lessons

The protests against Dilma Rousseff are based on a double false pretence: they are not 
against corruption, and they do not seek her impeachment. This implies that the 
mobilization cannot be controlled precisely, and it can just as plausibly grow as it can 
taper off. In either case, it will leave behind a residue of disgust that can fuel a 
political spiral of unintended consequences. Beyond this irreducible uncertainty, the fate 
of the federal administrations led by the PT suggests eight lessons.

First, under favourable circumstances the PT disarmed the political right and disconnected 
the radical left from the working class. However, when the economic tide turned policy 
confusion and political crisis fed a confluence of dissatisfactions that now risks 
overwhelming Dilma's administration.

Second, unmet aspirations and the convergence of grievances, even if they are mutually 
incompatible, can trigger political isolation and volatility that can become hard to contain.

Third, while the PT administrations have managed to reduce the income gap between the 
middle class and the working class, the political distance between them has increased. 
This chasm creates political instability in the short-term and obstacles for democratic 
social and political reforms in Brazil in the medium- and long-term.

Fourth, economic growth, social inclusion, the distribution of income and wealth, 
employment creation and the expansion of infrastructure remain relevant goals, but the PT 
has become unable to build the political conditions to achieve them.

Fifth, despite its volcanic energy the opposition remains bereft of a programme and 
deprived of popularity. The PT has been implementing the opposition's neoliberal 
macroeconomic policies; the PSDB does not seek to overthrow the government (although Dilma 
may step down if the situation spirals out of control); the upsurge against Dilma and the 
PT did not raise the popularity of the opposition ('they are all thieves'), and no one 
aims to 'end corruption'. This is not, then, a crisis of the state or the political 
system, but a crisis of the hegemony of the PT.

Sixth, the experience of the PT suggests that ambitious policy changes are needed in order 
to break with neoliberalism and secure gains in distribution and poverty reduction. They 
include changes in the country's economic base, international integration, employment 
patterns, public service provision, structures of political representation and the media. 
These were never contemplated by the PT, and those limitations have now returned to 
destroy the Party and its leaders. In Brazilian politics, self-imposed weakness is rarely 
rewarded; instead, it elicits escalating attacks targeting the jugular.

Seventh, the Brazilian opposition has become increasingly aggressive. The 2015 movement is 
large and cohesive; in the meantime, the left is disorganized and bereft of aspirations 
and leadership. Despite these successes, the right is constrained by its inability to 
outline a consistent programme, and it has not gained popularity despite the dégringolade 
of the PT. The combination of strengths and weaknesses on the sides of the government and 
the opposition suggests that Brazil is entering a long period of instability. The 
emergence of a new political hegemony may take several years - and it is unlikely to be 
led by the left.

Eighth, as the 'Pink Wave' crashes in Brazilian shores, the Kirchner administration walks 
toward the catafalque in Argentina and Chavismo crumbles in Venezuela. These outcomes 
suggest that transformative projects in Latin America, however radical (or not), are bound 
to face escalating resistance. Its form, intensity and impact upon the alliances 
supporting the government will tend to fluctuate with the global environment, making it 
difficult to plan reformist strategies. It follows that broader alliances are not 
necessarily better, because they are prone to instability, and that the social, political 
and institutional sources of power must be targeted as soon as possible. There can be no 
guarantee that the task will become easier tomorrow, and no certainty that the future will 
be better than the present. The future does not belong to the left; it must be seized.

Related Link:http://www.socialistproject.ca/bullet/1097.php#continue

http://www.anarkismo.net/article/28038