No matter who wins in Brazil, the poor still need to act

Conventional wisdom says that after a surprising failure to win outright the first round of the Brazilian election on Oct. 1, President Luiz Inácio Lula da Silva will cruise to reelection in Sunday's runoff. Even if he wins, Lula will struggle to earn back that trust of those who no longer consider him their hero. There's still a lot of anger among the discontented voters who elected him four years ago – and for good reason. In addition to rampant government corruption, Lula betrayed almost all of his promises to his political base.

Lula won power in 2002 on a platform of helping the country's millions of poor. Since taking office, he has met only about 50 percent of his own social goals.

Lula's failed promises

He pledged 10 million new jobs, but created only 4 million. Unemployment stands at 10.7 percent nationwide, with joblessness hitting an estimated 70 percent in the slums.

He has placed less than half the promised number of peasant families on farms created from public land. In a nation where 1 percent of the people own 50 percent of the land, he has yet to begin his land-reform program that would buy and distribute private land.

He missed his target on providing healthcare to more people by half, and did not come close to fulfilling his promise to double the minimum wage until reelection time neared.

That helps explain why Lula got just 48.6 percent of the first-round vote. The votes he needed to get at least 50 percent and avoid a runoff were given in protest to two dissident candidates who were once members of Lula's Workers' Party.

Sen. Heloisa Helena Lima de Moraes, who left Lula's party in disgust, took 6.9 percent of the vote, while Cristovam Buarque, Lula's former minister of education, got 2.6 percent. Geraldo Alckmin, the candidate of the elites and the Social Democratic Party who will face Lula Oct. 29, got 41.6 percent.

Discrepancy between Lula's rhetoric about the poor and his actions caused a rebellion among his supporters in the first round and poses risks for the runoff.

Senator De Moraes, a fierce champion of social justice whose electoral challenge forced Lula to promise to improve public schools and boost social programs, is urging her supporters to deface their mandatory ballot – voting is required in Brazil – instead of voting for Lula.

An earlier strategy among Lula's disillusioned supporters called for voting for de Moraes in the first round, but supporting Lula in the runoff. This approach seems to be gaining ground. "We will vote for him not because of his merits, but because of our desperation," says Marcus Arruda, of the Institute for Policy Alternatives.

Lula did create a family allowance that provides about $45 a month to roughly a quarter of the country's population, which should keep the poorest of the poor loyal in the runoff. However, he has made almost no long-term changes to lift them out of poverty permanently.

His tight fiscal policy and his failure to obtain better terms or a cancellation of Brazil's $450 billion debt is what makes his former supporters most bitter. That approach left little money to meet his social goals in his first term and will limit him to small gestures toward the poor if he gets a second term.

A tight money policy also requires high interest rates, which curb economic growth by making it too expensiv for companies to expand and hire workers. Although Lula had the rate cut to 13.75 percent, in response to De Moraes's proposal to cut it by half, it still isn't enough.

Dashing the hopes he originally raised for new economic policies that would put Brazil's needs first, he carried out neoliberal policies that make investors happy, but bring little prosperity to most people. He is promising to continue those policies in a second term. So is his rival, Mr. Alckmin. That's why a Wall Street Journal story reported that "a runoff would present a win-win situation for investors."

A lose-lose situation for many in Brazil

It will be a lose-lose situation for the poor and those in the middle class concerned about Brazil's great inequality. Lula will make only a marginal difference for the needy if he continues his fiscal and debt policies. Alckmin, who wants to cut even Lula's limited social spending as well as taxes, would exacerbate the inequality. Both would eschew the trend among Latin America's populist presidents, whatever their individual failings, to try seriously to reverse centuries of injustice.

Brazil's hope for change lies not with the two candidates in the runoff, but with the social movements that originally put Lula in power. Led by the unions, they intend to present an economic plan to the victorious candidate. They promise street demonstrations to back up their cause.

Labor movements that still support Lula, though with new reservations, say they'll have a different relationship with him if he serves a second term. They understand that being his uncritical cheerleaders in the first term didn't produce much for the poor or Brazil.

The media and Lula's opponents are using the corruption issue to blur Brazil's struggle for justice. But this election won't be shaped by corruption. It will be shaped by whether Lula's betrayed supporters vote their anger or their hope.

Marlene Nadle is a foreign-affairs journalist and associate of the Council on Hemispheric Affairs.

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