May 12 2023 | Nº. 66

Editorial

Last weekend, President Luiz Inácio Lula da Silva was one of about 100 heads of state to attend the coronation of King Charles III. Meeting with the Brazilian president on Friday, Prime Minister Rishi Sunak pledged US$100 million to the Amazon Fund, a mechanism created in 2008 to enable foreign governments to contribute directly to conservative efforts in Latin America’s largest nation. The next day, when asked his opinion of “political prisoner” Julian Assange, Lula issued a vigorous defense of the controversial Wikileaks founder currently fighting U.S. extradition from a London prison. “It is shameful that a journalist who denounced trickery by one state against another is arrested, condemned to die in jail, and we do nothing to free him. It’s a crazy thing,” Lula said, lamenting the fact that he had forgotten to bring it up in his meeting with Sunak. 

While Lula enjoyed his renewed standing abroad, cracks in his congressional base emerged at home, potentially threatening future legislative priorities. After the government failed to secure approval of modifications to the country’s sanitation framework passed under former president Jair Bolsonaro, questions emerged this week about the extent to which Lula can rely on the base of support he has cobbled together from various parties. Minister of Institutional Relations Alexandra Padilha, whose main task it is to coordinate between executive and legislative branches, was blamed publicly and privately for failing to deliver. To be fair, Padilha has one of the most thankless jobs in the administration. Whatever failures occur in the government’s political dealings with Congress are and will always be on him while successes will ultimately be attributed to Lula's gift for conciliation. Indeed, Lula himself is said to become more involved in negotiations with Congress ahead of major votes on the country’s fiscal framework and tax reform. 

Challenges exist beyond the halls of Congress as well. The Landless Workers’ Movement (Movimento dos Trabalhadores Rurais Sem Terra, or MST) has engaged in dozens of new land occupations this year, urging a friendly administration to accelerate the process of land reform. By occupying territory that it determines to be serving no useful social function, the MST puts pressure on the National Institute of Colonization and Agrarian Reform (Instituto Nacional de Colonização e Reforma Agrária, or INCRA), the government agency charged with carrying out agrarian reform in Latin America’s largest nation, to move forward with the expropriation and redistribution of land. Largely in response to the movement’s activities, opposition forces in Congress have opened a formal investigation into the MST. Uncowed, João Pedro Stedile, a longtime national leader of the MST, lamented on Thursday, May 11 what he sees as an overcautious federal government. “The government as a whole is a little fearful,” he told Mônica Bergamo of Folha de S. Paulo. “First, on January 8th, which was an affront and a real coup attempt. It's not that [administration] people get scared. It creates a climate where everything has to be more careful.” He also attributed the government’s caution to the closeness of Lula’s victory over Bolsonaro. Whatever the cause, the renewed militancy of the MST is yet another delicate political challenge that will put Lula’s skills of mediation to the test in the weeks ahead. 

Highlights

• PROBLEMS IN CONGRESS. Lula has been finding it difficult to retain a reliable support base in Congress. This is the case because there is a group of seven political parties that previously supported the Bolsonaro government and now say they support the new Lula administration, albeit without much conviction. This group is made up mostly of political parties that have little or no ideological identity and survive through occasional negotiations for governmental positions and the release of federal funds for their constituencies. The precariousness of this parliamentary base caused the government to suffer an important defeat in a vote that took place on May 3, when the Chamber of Deputies overturned the changes that had been made by the government in the Sanitation Framework, a set of norms that regulate sanitation in Brazil. The final was 295 votes against the government’s legislation and only 136 in favor, which sparked an alert in Lula's office.

• CONGRESSIONAL VOTING MAP. The Chamber of Deputies, the lower house in the Brazilian congress, has 513 seats. Lula's base is made up of 222 congressional representatives from six different parties (Workers’ Party, PT; Social Democratic Party, PSD; Democratic Labor Party, PDT; Brazilian Socialist Party, PSB; Party of Socialism and Freedom, PSOL; and the Party of the Brazilian Democratic Movement, PMDB). Then there is a bloc considered more unstable, formed by 189 congressional representatives from seven parties, many of whom were previously in the support base of the Bolsonaro government (Popular Party, PP; Brazil Union, União Brasil, Republicans; Citizenship, Cidadania; We Can, Podemos; Patriot, Patriota; Social Christian Party, PSC; and the Party of Brazilian Social Democracy, PSDB). Finally, there are 102 congressional representatives from just two parties that openly declare themselves to be the opposition (Liberal Party, PL; and the New Party, Novo). The problem for Lula lies in the 222 congressional representatives from seven parties, who promise to support the government's proposals for Congressional legislation, but are not reliable.

• HOUSEKEEPING. The defeat in the vote on the Sanitation Framework occurred shortly after the government backed down from another important vote on Bill 2630/2020, nicknamed the Fake News Law. The text was withdrawn from the body because the government feared it would be defeated. In addition, the opposition managed to create a Parliamentary Commission of Inquiry (CPI) to investigate the attempted coup on January 8, and the Lula government has been pressured by the risk of Congress opening another inquiry about the Landless Movement (MST). Recent setbacks have increased the pressure on Alexandre Padilha, minister of Institutional Relations, who is responsible for coordinating between the executive branch and the legislative. Lula supported Padilha in public, but the pressure on the minister grows as the government experiences defeats in Congress.

• FAKE NEWS. Lula needs to establish his base in Congress to pass important legislation, such as the Fake News Law, which tries to regulate the role of big tech in Brazil. The text of the law is supported by the Left and the mainstream press, but it is criticized by the extreme right and the big social media companies. The Supreme Court has recently issued harsh rulings against Google and Telegram. Supreme Court Justice Alexandre de Moraes ordered both companies to withdraw postings in which they characterized the Fake News Law as a threat to freedom of expression. This dispute is taking place within the context of a serious concern about the imbalance that social networks and messaging applications cause in electoral disputes when they behave as vectors for the free dissemination of false information, driven by paid advertisements and favored by the targeting of algorithms.

• CHANGES IN THE ECONOMY. In addition to the difficulties with Congress, Lula faces disputes with the Central Bank, involving the setting of interest rates in Brazil. The president considers the 13.75 percent rate to be artificially high. The Workers’ Party goes so far as to accuse Roberto Campos Neto, the president of the Central Bank, who was appointed to the post in 2018 by Bolsonaro, of “sabotaging the country’s economic development and sovereignty.” In Brazil, the Central Bank has the autonomy to set interest rates. With limited powers in the matter, Minister of Finance Fernando Haddad indicated that he intends to promote changes where he has power to do so. For example, Gabriel Galípolo, an ally, joined the Monetary Policy Board and Ailton de Aquino Santos was appointed to the Inspection Board. Before taking office, both must go through a hearing in the Senate, which has a tradition of approving names.

• BRAZILIAN DIPLOMACY. This week, Finance Minister Haddad traveled to Japan, where he is participating in the Financial G7 – the meeting of economic teams from the seven major powers. In Niiagata, he asked US Treasury Secretary Janet Yellen to help Brazil aid the Argentine economy. Lula had received a similar request from Argentine President Alberto Fernández, who made an official visit to Brasília a week earlier. Brazil argues that the situation in the neighboring country is not only economic, but also humanitarian. On another front, Celso Amorim, President Lula's special advisor for international affairs, met with Ukrainian President Volodymyr Zelensky in Kiev on May 10. Both discussed a peace plan for the war with Russia. Brazil has been seeking the role of intermediary between the two parties. Over the last ten days, Lula's speeches on the subject began to more clearly contemplate Ukrainian interests in the negotiation, walking back a position initially more aligned with Moscow.

Feature Article

by Rafael R. Ioris

Brazil’s Rising Challenges in the New World Order

The rise and fall of world powers has been a focus of intense scholarly interest. From the fall of the Roman Empire to the dawn of US hegemony in the second half of the twentieth century, scholars of multiple disciplines have tried to assess whether the replacement of an established power by a rising one needs to involve major military conflicts. No agreement exists, but, in most cases, wars have expedited this type of transition, especially when the declining and rising powers do not share historical paths of cultural traditions. Regardless of the case, the fact is that the world seems to witness today a crisis of the Western-centric world of the last 400 years, with a likely return to an Asia-centered economic dominance. It is unclear how the process will unfold. But it is certain that nations historically tied to the European-US center of power, particularly those in the so-called “The Other-West,” like in Latin America, will face a particularly difficult course in trying to (re)position themselves amidst this changing world order.

Of special relevance in the Latin American context, Brazil, the largest nation and economy of the continent, and a country that historically managed to sustain a course of largely autonomous but close relations with the hemispheric hegemon, finds itself today in a doubly challenging position. Replacing the United States, China is today Brazil’s most relevant economic actor, and within the BRICS, a loosely defined but nonetheless effective multilateral block that has helped reshape the economic and geopolitical balance of the world in the last two decades, both countries have come to pursue aligned projects to reshape the global context, such as in the creation of the BRICS Bank, a multilateral funding agency for developmental projects in the Global South that could overshadow the traditional role played by the World Bank.

In the early 2000s, Lula managed to become Brazil’s first president with a working-class background. In power, he deepened the course of erecting a social welfare state in one of the world’s most unequal economies and innovated with ambitious foreign policy initiatives. Brazil seemed to be emerging on the world stage as the most promising democracy and striving new diplomatic actor in the developing world. Tragically, this auspicious path was not sustained, and Lula has now the challenging tasks of rebuilding the country’s democratic institutions and repositioning his country in the world, after the tragic years of the neo-fascist administration of Jair Bolsonaro. The timing for delivering on both fronts could not be worse, though. The domestic and global contexts are very different from the ones when Lula became president for the first time, and what was then seen as the pursuit of an autonomous and assertive line of foreign policy, which fits well into the diplomatic history of the country, had now been interpreted by many in Brazil and in the international community as divisive, inappropriate, or even a betrayal of Brazil’s traditional western alignments. 

Interestingly, all that Lula has tried to do in his foreign policy actions in the last four months has been to try to revive his impressive achievements of the first decade of the century, when Brazil managed to sustained good relations with its traditional allies and trading partners, such as the United States and the European Union, while also expanding economic, diplomatic, and strategic projects with countries around the world, particularly among other rising powers, such as India and China. Towards promoting his goals, Lula attended a meeting of the Community of Latin American and Caribbean nations (CELAC) in Buenos Aires, where Brazil declared its interest in strengthening its ties with the region. Soon after, he visited Biden in Washington, D.C., where both leaders professed their mutual defense for democracy and shared interests in more environmentally sound patterns of development, particularly in the Amazon region. After this trip, Lula visited China, where commercial agreements were signed, and then went to Europe to meet with traditional allies. 

Besides not acknowledging the fact that Lula visited both old and new allies, the treatment that Lula received by Brazilian and international media outlets lacks the needed historical perspective. For over a century, Brazilian diplomatic efforts have been in the defense of multilateralism, peaceful resolution of conflicts, and self-determination. Moreover, its own foreign policy has been largely defined by the need to serve as an instrument of the country’s own development. Lula’s overtures to traditional and new trading partners and defense of the need to find ways to resolve the stalemate in Ukraine are therefore not surprising. Perhaps some of his statements about the war could have been phrased in more diplomatic language. But he is right in pointing out that Brazil can serve as an intermediary towards peace, which can only be achieve when Russian is brought to the negotiation table – an invitation that Brazil has a privileged position to present. 

Speculations about Brazil’s shifting allegiances in the rising economic, geopolitical and diplomatic rivalry between the US and China notwithstanding, the fact is that Brazil cannot afford to pick a side in these disputes. If China now exerts tremendous economic influence in carrying over the bulk of Brazil’s impressive agribusiness exports, Brazil’s economic, cultural, diplomatic, and historical ties to the United States and Europe are not going to fade any time soon. 

It is unclear whether Lula can revive the balancing act that he managed so well to conduct twenty years ago, as the situation is much harder now. Economic and geopolitical global disputes are ever more prone to include a military dimension and the war in Eastern Europe has no end in sight. And though Brazil could indeed play a peace-making role, neither side of the conflict seem ready to talk peace. 

At the same time though, soon after Lula’s visit to China, the US government increased by tenfold its economic commitments to the Amazon Fund, demonstrating that in this ever more divided and conflictive world, Brazil still has a role to play and that automatic alignments with any country is not in the best interest of a complex and powerful country like Brazil.

Rafael R. Ioris, Professor of Latin American History at the University of Denver and a Research Fellow at the Washington Brazil Office.

Feature articles express the opinions of the author and do not necessarily reflect the opinions of the editors or WBO.