WORLDVIEW: It's carnival week in Brazil, a traditional time for street bands to mock politicians. One group of journalists has composed a song criticising President Luiz Inacio Lula da Silva, the radical leader in power for 14 months now, writes Paul Gillespie. Part of it runs:
I wanted to see the economy grow
But the government wouldn't let me go
They barred me and Portela and the rest of the nation
I'm waiting Comrade, where's the celebration?
It expresses very well the sense of disappointment felt by large sections of his supporters, reinforced by a campaign finance corruption scandal potentially affecting his powerful chief of staff, José Dirceu.
This week's soccer match in Dublin and President McAleese's visit to Brazil next month help to put its affairs more in the public eye here. They have always deserved more attention than they get - all the more so considering the international importance of Lula's political experiment. Its success or failure has implications not only for Brazil but for billions of the world's poorer peoples and their leaders, confronted with the realities of capitalist globalisation and how they should respond to it.
In January last year Lula set out an inspiring agenda in his inaugural speech. Hunger would be eliminated from Brazilian society (it affects 105 million of the 178 million population); hundreds of thousands of landless people would be given land; millions of jobs would be created (8 million by 2006); health and education transformed; violence would be curbed; a powerful judiciary would be tackled; wasteful public expenditure curbed and redirected; and Brazil would take its place confidently at the centre of international affairs alongside comparable great powers, including the US, Russia, India and China.
One year on the record is highly uneven. The great surprise to the untutored eye has been Lula's economic and fiscal orthodoxy. He has cut state expenditure severely, negotiated a deal with the International Monetary Fund promising a budget surplus of 4.24 per cent, reformed civil service pensions schemes, and inaugurated taxation reforms.
He has overseen interest rates to a high of 26.5 per cent, falling to 16.5 per cent, in order to control inflation. Growth was a mere 0.1 per cent in 2003, the lowest since 1992. Overall joblessness surged to over 10 per cent (19 per cent in Lula's Sao Paulo stronghold).
All of this has left little surplus for redistribution in one of the most unequal societies in the world, which Lula's Workers' Party is pledged to change (although a good start has been made with his Zero Hunger campaign which distributes food coupons to the poorest people). But it has impressed the markets and international business opinion. As a result the stock market has recovered, the currency stabilised and investments have remained relatively steady. Growth is expected to average 3.5 per cent this year.
As Lula puts it, "the biggest challenge for the Brazilian economy is to produce wealth and social justice at the same time". He defends the stringent budgetary and fiscal policies as necessary to gain the confidence of markets so as to prevent them subverting his overall reforms. He pleads for more time to his supporters: "For those who are in a hurry, I ask you to wait until the end of my [four year] term." Many of them have denounced these measures, saying they betray the party's programme and roots among the dispossessed, not to mention Lula's own exemplary proletarian background as a shoe shine boy, metal worker and militant trade unionist. But the pragmatic streak was well ensconced in the Workers' Party before it came to power.
Lula has become an inveterate traveller over the last year, visiting 27 countries in pursuit of a more accommodating international economic, trading and political environment. He is convinced this is necessary if the existing rules of the globalisation game are to be changed to benefit developing countries such as Brazil.
Much effort has gone into forging south-south links to counter the world trade agenda dominated, as Lula sees it, by the US and the European Union. He linked up with South Africa and India in a group to lobby the WTO negotiations at Cancún in Mexico last September.
Their action paid off, blocking an agreement there, largely over agricultural subsidies. Its failure was blamed primarily on Brazil by the US Trade Representative, Robert Zoellick, and some sharp and heavy-handed trade diplomacy followed in Latin America aimed at Brazil, seeing many of its regional allies retreat under US pressure. Nonetheless, Washington has to recognise the support Lula enjoys among Latin American political and business elites, as well as his mass popularity there. Brazil takes a seat on the UN Security Council this year; and while Lula has met President Bush in Washington, he has been a vocal critic of US unilateralism, military pre-emption and disregard for the UN.
Lula believes the world economic order must be changed so that countries such as Brazil, South Africa, India and China have more room to develop and gain access to international markets. The existing rules are too loaded towards multinational companies in the north.
China is crucial here. With an economy three times the current value of Brazil's and going through a period of explosive growth, it would be a crucial recruit to his group within the WTO.
Brazil, like these other states, needs much freer access to US and EU markets for agricultural products such as soy, citrus, sugar and beef, as well as for industrial goods if it is to generate sustained growth to finance social redistribution and change.
Lula has championed regional economic and political integration as a greater priority than the Free Trade Area of the Americas pursued by Washington. He is determined to avoid Mexico's dependency on the US delivered by the NAFTA agreement, seeing a combination of Mercosur and the Andean Pact as a better way to get a more equitable deal from Washington. This year he must make progress at home and abroad to retain his credibility - and that of reformist regimes in the south within the framework of liberal capitalism on a global scale.