Brazil, the “country of the future” is back to its past

Brazil is a country of the future..and always will be so. This used to be the teasing comment of critics who had watched the country which had promised with booms many times but followed with busts. Brazil, the largest country in Latin America and endowed with abundant natural and vibrant human resources, was closest to its Tryst with Destiny during the golden years of Lula’s Presidency in the period 2003-11.

The election of Lula in 2002 was a historic moment for the young democracy, which had come out of the military dictatorship in the period 1964-85. The voters gave chance to Lula from a poor family and the Workers Party (PT). He had no educational qualifications nor any government or administrative experience. He was a Leftist who put workers and poor people on top of his socialist agenda. The right-wing forces scared the voters saying that Lula would be a disaster for business and industry. During his campaign, Lula came across a schoolboy from a rich neighbourhood of Sao Paulo city who shouted “ vote for Lula”. The surprised Lula asked the boy the reason for the rich boy’s support to the pro-poor Lula. The boy replied,” My father told me that if you were elected, he would leave Brazil and move his business and family to Miami. That’s why I pray and campaign for you to win so that I can go to Miami”. But Lula turned out to be a darling of business without compromising his pro-poor agenda. He transformed Brazil with his Brasilia Consensus model of a balanced mix of pro-poor and business-friendly policies. The Brasilia Consensus brought people from the Left and Right towards the centre, ending the traditional ideological polarisation of the society. He rescued the country out of the ‘Lost Decade’ caused by the neoliberalism Washington Consensus and pulled out over forty million out of poverty. At the same time, Lula helped the Brazilian firms to flourish and pay more taxes which contributed to his welfare policies. He encouraged Brazilian companies such as Petrobras, JBS and Odebrecht to become regional and global leaders with generous credit and proactive diplomatic support for their entry in other countries. Helped by the commodity boom, Brazil was becoming prosperous and optimistic. When Petrobras issued the world’s largest (at that time) IPO of 70 billion dollars in 2010, Lula crowed, “ This largest IPO was not issued in London or Frankfurt or New York. It was issued in our own Sao Paulo exchange”. When the Wall Street bankers unleashed a financial crisis on the world, not a single Brazilian bank or financial institution collapsed. In fact, Brazil bounced back from the crisis with a 7.5 % GDP growth in 2010. Again, the irrepressible Lula blamed “ the blue-eyed and blonde haired boys of the Wall Street” for causing the crisis with their unchecked greed.

Lula became a role model for Latin America. Leaders like Mujica of Uruguay, Humala of Peru, Correa of Ecuador and Lugo of Paraguay promised to become the Lulas of their countries and the label had helped their election.

Lula gave leadership to Latin America with new initiatives for regional and subregional integration. He challenged the US hegemony of Monroe Doctrine and killed the US-sponsored Free Trade Area of the Americas (FTAA) in collaboration with other leftist leaders of Latin America. When the Honduran President Manuel Zelaya was overthrown in a US-supported coup in 2009, the Brazilian embassy gave asylum to Zelaya and tried to restore him to power. Lula reached out beyond Latin America. He opened embassies in several countries in Africa and started the dialogue between Latin America and Arab countries. He partnered with India and South Africa in IBSA and joined the BRICS story. He got the Olympics and World Cup venues for Brazil. He sought permanent membership of UN Security Council. He tried even to mediate in the issue of US sanctions on Iran. This raised alarm bells in the Deep State which started plotting to stop the rise of Lula, Brazil and the Latin American Left.

It looked as though Brazil had finally put its act together and a New Brazil had arrived in the twenty-first century. Lula finished his second term with the highest approval rating. He got his chosen successor Dilma Rousseff elected as President. But she committed a series of omissions and commissions by her lack of political skills and caused the destruction of Lula, PT and the country. The leaders of the Workers Party succumbed to hubris and got caught for corruption. The crooked members of the Congress impeached President Rousseff on a flimsy charge of budget fudging, a minor, harmless and insignificant act, committed by many governments around the world routinely. This Congressional coup was complemented by a Judicial Coup lead by Sergio Mora, a US-trained judge, who put Lula in jail and prevented him from contesting the elections. In the name of anti-corruption crusade, he had systematically used and misused the judicial system to put Lula in jail ( a disproportionate punishment for having accepted the gift of an apartment by a private company) and destroyed the image of PT. The other political leaders and parties became collateral damage of Moro’s crusade. It should be noted here that the National Security Agency of US had electronically spied in the offices of President Rousseff and Petrobras, among others. When this came out in the papers leaked by Snowden, President Rousseff cancelled her official visit to the US. Many Brazilians believe that the Deep State had shared their intelligence with their Brazilian counterpart and the two had worked together to bring down Lula and the Left.

The constitutional and judicial coups had succeeded in instigating anger among the public which leads to protests (some spontaneous and others sponsored) in the streets and social media in the last three years. The voters wanted to punish PT as well as the other traditional political parties and leaders. In any case, PT deserved to be put on the bench and other parties and leaders needed to be given an opportunity to govern. It is at this opportune time that the ultra-rightist and anti-democratic Bolsonaro stepped into the void and harvested the voters’ disillusionment and despair.

Bolsonaro, an ex-army captain, has been a long time fringe congressman who glorified the past military dictatorship and celebrated its abductions, torture and killings of civilians. According to him, the military dictatorship did not kill enough people. He has favoured dictatorship and praised Pinochet. He has said,” We are going to have a cleansing..and wipe these red thieves (workers party and other socialists and communists). Either they leave the country or they go to jail”. Hamilton Mourao, his Vice President-elect and a retired General, has also been talking of a coup if circumstances warranted it. One of his politician sons made a statement threatening that the supreme court could be closed just with a soldier and a corporal. Bolsonaro proposes to fill the cabinet and top administrative posts with Generals. Even if he does not become a dictator, the very election of Bolsonaro with his anti-democratic and pro-dictatorship discourse is a stain on the young Brazilian democracy.

Not surprisingly, Moro has been rewarded with a ministerial post by President Bolsonaro. Moro described Bolsonaro as a “prudent, sensible and moderate person”, while the world sees Bolsonaro as an extremist bigot. Now Moro will continue his anti-Lula and anti-PT work officially to ensure that Lula does not come out of jail.

Bolonaro will bring back Washington Consensus to replace the indigenous Brasilia Consensus. His nomination of a Paulo Guedes, an economist trained in the Chicago University confirms the direction of neoliberalism. It may be noted here that the Chilean dictator Pinochet was also guided by the Chicago Boys. The Bolsonaro administration will reverse the resource nationalism of Lula and privatise public sector companies. The pro-poor policies initiated by Lula would suffer budget cuts. Bolsonaro’s solution for poverty is ‘birth control of the poor’.

Bolsonaro favours loosening of the gun laws based on his view that every honest citizen should be able to own a gun. He will give the law enforcement more powers to kill drug traffickers and criminals extrajudicially. He proposes to relax environmental regulations to open up the Amazon forest for farming and mining. He has talked about pulling out of the Paris Agreement on climate change. Under his administration, the protection for indigenous people and minorities will be reduced. He is likely to implement the agenda of the evangelicals (who gave him solid support) on issues such as abortion and gays. His racist comments have inspired a Sao Paulo student who celebrated Bolsonaro victory with the posting of a video (which went viral) saying that he will grab a knife or gun to shoot the reds ( Workers Party) and blacks. It should be noted here that Brazil has the largest black population outside Africa. The blacks while excelling in football and music, have the least representation in politics and business and account for most of the poor in Brazil.

Bolsonaro’s three sons who are also into politics (with one in the Senate, another in the Lower House and the third as an advisor) have already started making Bolsonaro policies like a family business just as Trump’s family does.

With his anachronistic and hate-filled agenda, Bolsonaro is set to turn the New Brazil into the Old Brazil. He will reverse the twenty-first century Brazil back to the bad old country of polarisation of the last century. Women, blacks, gays and Leftists will become second-class citizens and subject to military-style rightist rule.

Lula had moved Brazil towards the centre by his moderate and pragmatic Leftist programmes combined with business-friendly policies. But now Bolsonaro will polarise the country with his intolerant policies towards the Left and minorities.

Fortunately, Bolsonaro’s party does not have a congressional majority. His party has just 52 seats out of the total of 513 in the lower house of Congress and just 4 out of the total of 81 in the Senate. This means he needs the support of other parties to carry out any major reforms. The Congress is even more fragmented this time with representatives from 30 political parties.

Bolsonaro, described as the Tropical Trump, admires and imitates Tumpian methods and abusive and vulgar language. In fact, the Brazilian election is a replica of the US election. The American voters had earlier created history by electing Obama but afterwards gave an anti-climax in the form of Trump. Similarly, the Brazilian voters who showed maturity in electing Lula earlier have now gone to the other extreme by choosing Bolsonaro.

Bolsonaros’ foreign policy will move to the hard right in stark contrast to PT’s solidarity with the developing world and resistance to US hegemony. With his Trumpian imitation “ Brazil first” Bolsonaro has ridiculed the UN as the gathering place of Communists and threatened to pull out from UN. Like Trump, he has called for withdrawal from and minimise multilateral and global commitments and dialogues preferring bilateral deals.

Ernesto Araujo, a career diplomat nominated as the new foreign minister of Brazil, is an admirer of Trump whom he describes as one who is restoring western values. He believes climate change is part of a plot by cultural Marxists to stifle western economies and promote the interests of China. Araujo is of the view that globalism is an anti-christian ideology.

Bolsonaro will align his foreign policy with that of US. He has already promised to shift the Brazilian embassy in Tel Aviv to Jerusalem and close down the Palestine office in Brasilia. He would happily support the US attempts to change the Chavista regime in Venezuela. It may be recalled that it was thanks to the support of Lula and Brazil that Chavez had survived the 2002 coup and continued in power till his death in 2013.

Bolsonaro will pull Brazil out of or undermine the regional alliances such as UNASUR and CELAC. His finance minister designates Paulo Guedes has stated that Mercosur (customs union of Brazil, Argentina, Uruguay and Paraguay) would not be a priority for Brazil.

Bolsonaro will pay the least attention to South-South Cooperation and to Asia, Africa and the Middle East. He has already snubbed Beijing by making a trip to Taiwan during his campaign. The Chinese have invested over sixty billion dollars in Brazilian oil fields, mines and utilities. They have extended credit of more than forty billion dollars. Bolsonaro has criticised the Chinese acquisition of Brazilian assets. China is the largest trading partner and market for exports of Brazil. In 2017, Brazilian exports to China were 47 billion dollars as against 27 billion to the US. In 2018 (January-October), exports to China increased by 28% accounting for 26.7% of total Brazilian exports. Brazil has always had a trade surplus with China and it was a solid 20 billion dollars in 2017 which has increased to 25 billion in the first ten months of 2018. In contrast, Brazil has a trade deficit with the USA, which does not need the Brazilian soybeans, corn, iron ore and sugar, the top exports of Brazil. Bolsonaro cannot afford a Trumpian trade war with China which can hurt Brazil by cutting imports, as it had punished Argentina in 2008 by stopping soy oil imports. Bolsonaro cannot afford Trumpian style China-bashing.

The election of Bolsonaro should not be read at the end of the Workers Party, whose candidate Haddad made it to the second round of the Presidential elections. The PT candidate got 45% of the votes which is substantial, despite the corruption scandals and the short campaign time given to Haddad after the court rejection of Lula’s candidature. PT has the largest number of deputies (56) in the lower house of the Congress while the other traditional parties got a worse beating in the elections. If Lula was allowed to contest, he might have won since he was consistently leading in the opinion polls ahead of Bolsonaro.

Nor can the victory of Bolsonaro be construed as the end of the story for the Left which swept Latin America in a Pink Tide in the first decade of this century. Uruguay, Ecuador and Bolivia are doing well under leftist rule. Mexico has joined the ranks of the South American left with the historic election of Lopez Obrador in July. In Chile, the voters have become smart by choosing alternately the Leftist and rightist coalitions in the last four elections. The socialist alliance might be returned to power in the next election. With a large population of poor people and the highest income disparity, the Left will continue to be relevant for Latin America in the years to come.

Some commentators have hinted at the possibility of contagion of the region by Bolsonaro’s rightwing extremism. While the US, Europe and Philippines have radical rightist leaders and parties, there are no comparable movement or leader in Latin America other than Bolsonaro. The Presidents of Chile, Argentina and Colombia who are from the centre-right are cultured, moderate, pragmatic and respectful of opponents.

India, which had cultivated Brazil as a strategic partner in the last two decades, should not have much expectation from Bolsonaro. This has not come as a sudden shock. Even before Bolsonaro, President Rousseff and President Temer had lowered Brazil’s international profile due to their domestic problems and had reduced proactive collaboration with India on global issues. IBSA and BRICS will not appeal to the “ Brazil First” Bolsonaro. However, India should see Brazil beyond Bolsonaro. Brazil will certainly realise and resume its logical alliance with India sooner or later. India should therefore wait and keep up the contacts.

For the moment, India should focus more on economic diplomacy. Brazil is the biggest economy in Latin America and the largest trade partner of India in the region with bilateral trade of 8.6 billion dollars in 2017-18. With the pro-business Bolsonaro administration, the economy and the market are set to improve. Since March 2014, Brazil had remained paralysed with the Operation Car Wash corruption scandal, political crisis one after the other and economic recession. The GDP growth rate had gone into negative figures in 2015 and 16. It has started growing marginally in 2017-18 and is now poised to speed up. The stock market has already started climbing up and investors have issued bullish statements.

Consequent to the indictment of large companies (such as Petrobras, Odebrecht and JBS) and banks (BNDES) involved in the corruption cases, infrastructure and investment had been halted in the last four years. Now these projects have be revived and the business will start flourishing again. Recently, Indian companies such as Sterlite, Sterling and Wilson have made entry into the infrastructure sector of Brazil with project contracts of over a billion dollars. Aditya Birla Group has announced investment of 175 million dollars in 2019 to expand the capacity of its Aluminium plants in Brazil. There is going to be more business and greater opportunities for Indian companies in Brazil in the coming years.

When the Argentine Cardinal Bergoglio became Pope Francis, the Brazilians said, “ The Pope might be Argentine but the God is Brazilian”. As part of his victory celebrations, Bolsonaro attended a worship service conducted by the celebrity evangelical pastor Silas Malafia who declared, “ God will change the fortune of Brazilians..Brazil belongs to Lord Jesus”. God save Brazil from Messias (the middle name of Bolsonaro which means Messiah), who is described by Economist magazine “as a menace to Brazil and Latin America”.

This article has been written by R. Viswanathan, is a retired Indian diplomat, writer and speaker specializing in Latin American politics, markets, and culture.  

The article was actually published in Latin American Affairs.