The biggest event in Latin America this year was the victory of a 'workers' party' in the region's most powerful capitalist economy, Brazil. When left-wing parties have come to power elsewhere - the Socialists in Spain or the Labour Party in Britain - they have soon caved in to the 'economic realities'. Whether the Partido dos Trabalhadores (PT) will do the same is the million-dollar question.

Brazil's Workers' Party, led by the charismatic, ex-trade union organizer Luiz Inacio Lula da Silva (widely known as Lula), won more than 52 million votes last October, the largest electoral support for a left-wing party in Brazil's history. Despite the convincing victory, Lula's road to the presidential palace was long and bumpy. It began more than two decades ago and included prison, repression and smear campaigns by right-wing detractors.

But the new Brazilian president is not fuelled by anger or desire for revenge. In fact during the campaign, his fourth one for president, he often spoke of himself as the 'candidate of peace and love'.

The PT has strong democratic foundations which is one reason Lula will have trouble abandoning his radical politics if pressure builds. All political tendencies - from Trotskyites to radical Catholics - are used to chipping in when there are policy debates on major issues. To give up hard-won principles would be impossible without losing a considerable portion of the party with them. The confident air of Lula's campaign seems rooted more in his assertion that Latin America's time to ditch 'the neo-liberal economic experiment' has finally arrived. And he believes he has the Brazilian public on his side.

The PT is by no means the creation of a single man. Lula is a leader with undeniable charm and intelligence but the party has a huge, enthusiastic following which has been patiently built over the past two decades. According to liberation theologian Leonardo Boff, the PT is a mix of three different strands in Brazilian society. First 'the new unionism' and this is really the bedrock of Lula's support; second the old, 'traditional' Left; and third a broad social movement of more than 100 community-based organizations. These include the Landless Movement, gay-rights organizations, and various churches that believe the Christian gospel compels the faithful to fight for social justice - and these churches have millions of followers.

The strength of this alliance has been tested through three electoral defeats. So it's no wonder the PT emerged from its recent victory at the polls sure of its policy goals. To prove the point Lula even chose one of the country's major industrialists, José Alencar, as his Vice-President. Alencar owns 11 textile factories and leads the tiny Liberal Party. He represents the nationalist business class, expressing the will of many entrepreneurs who have been demanding a shift to 'national development' strategies and away from economic globalization with its dependency on imports of foreign capital. Given the prevailing international climate Lula is hard pressed to argue for socialism; instead he's deflecting right-wing critics by talking in general terms about a 'progressive' government that will reach out to Brazil's poor and make the kind of changes that will allow them 'to eat three times a day'.

Lula's nationalist strategy hinges on a pact between business and labour that will boost internal and regional markets, keeping factory production lines humming and unemployment as low as possible. Such an alliance was unthinkable until a few years ago. If the PT's project works it will be an inspiration for other countries across the continent. Lula's first official trip abroad in December 2002 was to meet with Argentina's Eduardo Duhalde. Argentina has been a firm supporter of Washington's efforts to finalize the Free Trade Agreement of the Americas treaty (FTAA). Instead Lula would like to see the re-emergence of a strong regional trading network to reinforce and build Latin American self-reliance: South-South links as opposed to North-South links. Brazil could emerge as a reliable partner for Argentina and other countries in the southern cone in the near future. The PT would like to see an economic partnership similar to the one Germany and France created to lead a united Europe. The end result? An experimental zone of neoliberal-free policies, based on solidarity and mutual respect.

In addition to Brazil there were other signs of growing opposition to free-market policies across the region.

Venezuela's Hugo Chávez continued to be a thorn in Washington's side. The ex-paratrooper turned populist politician sold cheap oil to Cuba and hugged Saddam Hussein, neither action bound to win him friends with his northern neighbour. Chávez also opposed Plan Colombia, a US-led strategy to destroy Colombia's billion-dollar cocaine trade and the assorted Leftist guerrilla groups who've managed to take over large sections of the country. A concerted union against neoliberal policies between Brasilia, Caracas and Havana has been one of Washington's greatest concerns.

But other countries were also showing exasperation with dead-end economic policies. In Ecuador, Lucio Gutierrez was elected President in November after defeating Ilvaro Noboa, a banana tycoon and the country's wealthiest man. Gutierrez, a retired army colonel, participated in the toppling of former President Jamil Mahuad in January 2000. He spoke to Wall Street investors during the election campaign, promising to honor all the Andean nation's contracts, to live with austere fiscal budgets and to pursue an accord with the International Monetary Fund.

However, he may be forced to backtrack if protest in Ecuador continues to grow. The indigenous movement, Pachacutik, which was at the core of the alliance that led Gutierrez to power, has a clearer position. The group opposes the FTAA and wants to reassess Ecuador's adoption of the dollar in March 2000. The group also opposes US troops using Ecuadorian military facilities in the northern city of Manta and rejects privatization of public services as a part of economic 'modernization'.

In neighbouring Bolivia Evo Morales, an indigenous coca grower and leader of the Movement Toward Socialism, came second in last June's presidential race. Morales was called 'unacceptable' by the country's US ambassador because of his clear opposition to economic globalization. 'Capitalism is humankind's worst enemy and environment's worst enemy,' said Morales.

Elsewhere, in El Salvador and Uruguay, opposition movements are close to coming to power through the ballot box, following the same pattern as the PT in Brazil. Leftist political movements in both countries are rooted in decades of opposition to US plans for the continent. Both movements include a broad range of members, from former guerrillas to centre-left organizations, and both have strong track records of working inside traditional power structures.

In Uruguay the Frente Amplio (FA) looks poised to win the next elections in 2004. It also hopes to revive the fading Mercosur free-trade agreement with Brazil, Argentina and Paraguay in a move to bolster regional economic ties and provide an alternative to the US-led FTAA.

These growing links between alternative political parties have been nurtured by the Forum of São Paulo. This pan-American organization was created in 1990 to bring opposition forces together and to develop common policy initiatives. And it has been a huge success, linking the parties that are today either in government or on the verge of it. The victory of the PT in Brazil can only boost its chances of producing a popular alternative to economic globalization.