The WEEK ending 3 November 2002
HUMBLE PIE A letter from Brazil by John Conroy
Brazil's new Workers Party (PT) government has begun its transition to power (it will assume presidential power proper on 1 January 2003) by announcing a 'war on hunger'. At the same time the PT is resisting calls from the conservative Liberal Front Party (PFL) for the PT to confirm its pre-election pledge that it would raise the minimal salary (the official minimum wage level and social benefit payment). The PT transition team has stated that any social advances will be dictated by what is possible according to budget limits, interest rates and foreign debt commitments. There will be no more 'utopias' just 'stability'.
There were no announcements of grand national development plans and projects, no defiant posturing and rallying against foreign threats to the Brazilian economy, no mention even of how Brazil's debt throttles domestic investment. Instead the diktat of 'realism' reigned supreme.
In the first speech Lula made Brazilians were offered a 'war on hunger': a miserable programme of coupons for the poor and tax breaks for company food donations, following in the Oxfam mode. The outgoing president has even been so alarmed by this that he has warned the PT not to introduce charity style poverty relief programmes.
Earlier in the election race a wave of nostalgia burst on the centenary of the birth of Brazil's famous 1950s developmentalist president, Juscelino Kubitschek. Kubitschek announced a '50 Years in Five' national development programme inspired by the New Deal that created a new capital city, kick started Brazil's steel and car industries, launched a hydroelectric dam scheme and saw tens of thousands of kilometres of road built even in the inhospitable and challenging Amazon region. He became a national hero. By contrast, today's hero Lula, has spent his first three days in Brasilia warning the country to calm its hopes for dramatic change and development.
How does the USA inspire Brazil today? The FTAA is the USA's attempt to bring the whole hemisphere into one trade bloc that it can dominate - but what sort of domination? Its tariffs and protectionist policies will continue to block Brazilian exports that directly compete with some of the most unproductive areas of the US economy: steel production and agriculture for example. The character and motivation for protectionism may change.
The USA's main export will be the politics of low expectations dressed up as 'stability'. With the US economy in the doldrums and US capitalism at one of its lowest ebbs in terms of self confidence and ideological justification, it will certainly not be offering a dynamic role model for the region. The new waves of self-criticism and atonement in the vein of Joseph Stiglitz offer a new means of justifying caution and even cowardice amongst the USA's economic elite. Their Pythonesque 'run away, run away' response to the Brazilian election race exposed their propensity to withdraw at the slightest whiff of self-induced panic. It will certainly attempt to find more lucrative points of investment in Brazil and elsewhere but its new precautionary approach -underlined by Bush's permanent defensive war footing - may well create a new form of protectionism that has more to do with a culture fear and risk aversion than defending clapped out sectors of its own economy.
The PT government in waiting has already absorbed these ideas and they will come in handy to keep a lid on expectations from the population. It has already stated that it has no principled objection to the FTAA and publicly accepted Bush's mantra for the region of 'stability' - political and economic. But there are not actually high expectations to deal with. Fernando Henrique Cardoso's eight years of government silenced critics by arguing that Brazil had to be realistic after decades of self-induced debt accumulation and subsequent punishment of hyperinflation. After such fantasies it was now time to live within the nation's real means. Cardoso passed a fiscal responsibility law justified to combat corrupt government over-spending.
The PT in opposition cow-tailed to these ideas and tried to out-do Cardoso's government in proving its austerity credentials. One of its most famous projects that it threatens to make national is its participatory budget project where Brazilian will get the chance to join in the decision-making process on how shrinking budgets get divided up. In Rio de Janeiro, Brazil's second most industrialised state, the PT government did not spend one Brazilian Real over its budget. With its influence over an unstable region and indeed over the developing world in general a new PT government of Brazil (like the ANC led South Africa to the rest of Africa) is set to educate the poor in the moral merits of accommodating to the failure of development in the undeveloped world and of ambition in the developed world. -- James Heartfield The 'Death of the Subject' Explained is available at GBP11.00, plus GBP1.00 p&p from Publications, audacity.org, 8 College Close, Hackney, London, E9 6ER. Make cheques payable to 'Audacity Ltd'