The answer, it seems, is both. Being everything to everyone is the oldest ruse in politics; Brazilians call it “lighting a candle to all the saints.” But Lula’s ecumenism has been brazen. First he muscled his fractious, Marxist party into the capitalist mainstream, while also promising a bonanza of jobs, health care, housing and “dignity” for millions of Brazilians. Then, instead of creating a “rupture” with the country’s fiscally conservative economic policies, which his companheiros clamored for, Lula embraced them. He has unflinchingly slashed budgets, curbed government salaries and hoisted interest rates. The parsimony has worked: his government has beaten back resurgent inflation and reassured skittish investors that Brazil’s economy is stable, though struggling with a decade-high 9 percent jobless rate. What’s more, Lula browbeat Congress into passing some vital constitutional reforms, starting with the profligate social-security system. Today the charismatic president, who has a preacher’s gift for rhetoric, wins applause on Wall Street. “He’s surprised many people,” says Walter Molano of BCP Securities, a U.S. investment bank. “Bankers love Lula.”
On the other hand, Lula’s “conversion” to economic orthodoxy has not gone lost on traditional party allies, who feel seduced and abandoned. The PT’s ballyhooed hunger-relief and anti-poverty plans–meant to pay Brazil’s historic “social debt” to some 40 million desperately poor–have faltered due to bureaucratic bumbling.
What’s remarkable is that Lula’s something-for-everyone strategy hasn’t seriously eroded his credibility–or his popularity with the people. His approval rating has slipped but not collapsed–from 67 percent in June to 59 percent in October, according a recent poll. That’s an enviable number for a leader in a regicidal region. Not even Brazil’s $14 billion deal with the International Monetary Fund, the PT’s favorite bete noire, appears to have caused lasting damage. How has he done it? In large part by championing populist causes abroad, such as opposition to U.S. trade policy, which has freed him to be a fiscal conservative at home.
It’s a risky strategy. Although the PT hierarchy has forced the radical rank-and-file to the center, a doctrinaire reflex twitches in Brasilia. Communications Minister Miro Teixeira caused a minor scandal earlier this year when he exhorted Brazilians to sue telephone companies over rate hikes. (The increases were lawful, and Teixeira was forced to back down.) Then last month the head of the government utility, Eletrobras, warned that if the U.S. power company El Paso dared cut off service to a delinquent local distributor, Brasilia would “send in the troops.” Lula himself sometimes slips into ideological default mode, such as when he recently told the 22d Socialist International conclave that under the rules of world trade, “our sovereignty was and is under threat.”
The former Brazilian Finance minister Mailson da Nobrega, who has seen government from the trenches, dismisses such talk as guerrilla theater. “Lula knows he needs to make concessions to the old guard,” he says. And foreign policy is the tool of his insurrection. Wherever he goes, Lula lashes out at the unilateralism of Pax Americana, scolds the well-fed nations for neglecting the poor and denounces the rich world’s “double talk” on free trade.
Though Lula didn’t himself attend the World Trade Organization summit in Cancun last September, his rebellious persona was conspicuous. Brazilian delegates caused a diplomatic earthquake when they marshaled allies in Asia, Africa and Latin America–the so-called G21 bloc–to demand that advanced nations tear down barriers to agricultural and manufactured goods from developing countries. The acrimony poisoned the meeting and triggered a bitter exchange between Brasilia and Washington, with U.S. Trade Representative Robert Zoellick’s singling out Brazil as the ringleader of the “won’t do” nations.
Tensions have since abated, but it’s unclear whether Washington will get much quarter as talks resume this week in Miami over creation of the controversial Free Trading Area of the Americas (FTAA), a would-be hemispheric trade pact. “The challenge,” says a senior U.S. State Department official, “is to figure out how to bridge the differences so that Miami doesn’t become another Cancun.” Lula sees things differently. To him, Cancun was an opportunity to take a moral stand. “We resolved not to be treated as small fry,” he declared. “No one respects those who negotiate with their heads bowed.”
Telling off the U.S. and European empires played well at home, but Brazil wanted more than to be a spoiler. After putting up an ideological fight in Cancun, Brazil may be able to seek a compromise in Miami. Lula understands his country has much to gain from lower trade barriers. Economists reckon that the elimination of U.S. farm and steel tariffs alone would save Brazilian exporters $600 million a year in surcharges. For all its export might, Brazilian foreign commerce represents a paltry 12.1 percent of GDP–the lowest rate in all of Latin America. While tariffs will be on the bargaining table in Miami, Brazil apparently has agreed to leave the far more prickly matter of removing U.S. farm subsidies to the World Trade Organization. Antidumping practices, another hot-button issue, are also taboo in Miami.
At the same time, Lula seems to be relishing his new status as international celebrity. Outside the Washington Beltway, Lula has been a hit abroad. In a recent poll by Zogby International and the University of Miami, Latin business leaders and intellectuals rated the Brazilian president the most popular leader in the Americas. By the year-end, he will have visited a dizzying 27 countries.
This is not just a case of presidential attention deficit disorder. Lula has big plans. For a start, he is actively lobbying to get Brazil a permanent seat on the United Nations Security Council. More broadly, he wants to be Latin America’s most outspoken advocate. Waving the banner of the poor is hardly new in international politics. But Lula, the peasant’s son who now leads the world’s 11th biggest economy, brings new urgency and a special pedigree to the task. “Lula has filled an important gap,” says Mario Marconini, director of the Brazilian Council on International Relations, a think tank. “All of a sudden Brazil has someone with the legitimacy to speak about world hunger, poverty and economic exclusion.” And in turn, speaking out gives Lula the political cachet he needs to push for the economic and political reforms he knows Brazil needs to keep growing. It’s a tightrope, but one he does well to walk.
