November 2010, Week 1


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Mon, 1 Nov 2010 22:50:54 -0400
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Dilma's Victory in Brazil: "Restore Sanity" Beats "Keep
Fear Alive"

By Mark Weisbrot Guardian (UK) October 31, 2010


This column was published by The Guardian Unlimited
(UK) on November 1, 2010. If anyone wants to reprint
it, please include a link to the original.

Like the rally led by Jon Stewart and Stephen Colbert
of Comedy Central that brought hundreds of thousands of
people into the streets of Washington DC on Saturday,
Brazil's election on Sunday was a contest of "Restore
Sanity" versus "Keep Fear Alive."

Dilma Rousseff of the governing Worker's Party coasted
to victory against the opposition candidate Jose Serra,
with a comfortable margin of 56 - 44 percent. It was a
bitter and ugly campaign marked by allegations of
corruption and malfeasance on both sides, and ended
with Serra's wife calling Dilma a "baby-killer."

Religious groups and leaders mobilized for the Serra
campaign and accused Dilma of wanting to legalize
abortion, ban religious symbols, being "anti-
Christian," and a "terrorist" for her resistance to the
military dictatorship during the late 1960s. The whole
campaign was all too reminiscent of Republican
strategies in the United States, going back to the rise
of the religious right in the 1980s, through the "Swift
Boat" politics and Karl Rove's "Weapons of Mass
Distraction" of recent years.

Serra even had a right-wing foreign policy strategy
that prompted one critic to label him "Serra Palin."
His campaign threatened to alienate Brazil from most of
its neighbors by accusing the Bolivian government of
being "complicit" in drug trafficking and Venezuela of
"sheltering" the FARC (the main guerrilla group) in
Colombia. He attacked Lula for his refusal - along with
most of the rest of South America - to recognize the
government of Honduras. The Honduran government was
"elected" following a military coup last year, under
conditions of censorship and human rights abuses such
that only the United States and a handful of mostly
right-wing allies recognized it as "free and fair."

But in the end, sanity triumphed over fear, as voters
proved to be more convinced by the substantial
improvements in their well being during the Lula years.

It is perhaps not surprising that Serra, an economist,
would try to find a way to avoid the most important
economic issues that affect the lives of the majority
of Brazilians. The economy has performed much better
during the Lula years than during the eight years of
Serra's party (the Social Democratic Party of Brazil
[PSDB] ): per capita income grew by 23 percent from
2002-2010, as opposed to just 3.5 percent for
1994-2002. Measured unemployment is now at a record low
of 6.2 percent.

Perhaps even more importantly, the majority of
Brazilians had some substantial gains: the minimum
wage, adjusted for inflation, grew by about 65 percent
during Lula's presidency. This is more than three times
the increase during the prior eight years (i.e. the
presidency of Fernando Henrique Cardoso, of Serra's
party). This affects not only minimum-wage workers but
tens of millions of others whose income is tied to the
minimum wage.

In addition, the government has expanded the Bolsa
Familia program, which provides small cash grants to
poor families, with school attendance and health
immunizations required. The program has been successful
in reducing illiteracy, and now reaches about 13
million families. More than 19 million people have been
brought across the poverty line since 2003. And a new
program of subsidies to home ownership has benefited
hundreds of thousands of families, with millions likely
to take part as it expands.

Although this brand of Republican campaign strategy was
effective for most of the last four decades in the
United States, it hasn't performed all that well as an
export. The Brazilian electorate tired quickly of the
mud-slinging, and swing voters wanted to know what
Serra would do for them that would be better than what
the Workers' Party had done. When he couldn't tell
them, he lost their votes.

On the down side, the mudslinging and "Republican
strategy" prevented the campaign from addressing some
of the vital issues of Brazil's future. Brazil's
financial elite, which dominates the central bank, has
an influence on economic policy that is at least as bad
- and as powerful - as that of Wall Street in the
United States. This is one reason why Brazil, even
under Lula, has had for many years the highest or near-
highest real interest rates in the world. Brazil's
growth performance has still not been on a par with the
other BRIC countries (Russia, India, China), and the
country will have to move away from some of the
neoliberal policies of previous governments in order to
achieve its potential.

Capital formation during the Lula years was not much
different from during the Cardoso years, and was
relatively low compared to many developing countries.
Public investment was even lower, although it has
recently begun to accelerate. The country will need a
development strategy, and one that establishes new
patterns of investment and consumption that advance the
interests of the majority of Brazilians - some 50
million of whom remain in poverty.

The election has enormous implications for the Western
Hemisphere, where the Obama State Department has
continued with barely a stutter the Bush
administration's strategy of "rollback" against the
unprecedented independence that the left governments of
South America have won over the last decade. A defeat
of the Workers' Party would have been a big victory for

It also has implications for the rest of the world. In
May, Brazil and Turkey broke new ground in the world of
international diplomacy, by negotiating a nuclear fuel
swap arrangement for Iran, in an attempt to resolve the
standoff over Iran's nuclear program. The State
Department was probably more upset about this than
anything that Brazil had done in the region, including
Lula's strong and consistent support for the Chavez
government in Venezuela. Serra had also attacked the
Iran deal during his campaign.

Outside of Washington, the results of this election
will be greeted as good news.


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