On 27 October 2002 a huge mass of Brazilians, waving red flags and shouting slogans, took over the heart of the banking centre in São Paulo, the country’s largest city. They were celebrating the victory in the presidential elections of Luis Inácio Lula da Silva, the candidate of the left-of-centre Partido dos Trabalhadores (Workers Party, PT). When Lula appeared on a giant screen to make his acceptance speech, people wept and hugged each other. They were confident that, after three decades of economic stagnation and worsening living conditions, Brazil was finally beginning a new era of prosperity and social reform.
Many Brazilians today are perplexed by the repeated failure of their country, the fifth largest in the world, to live up to its promise. They know that the country has achieved much, for it has become the tenth largest economy in the world and is a leading exporter of both sophisticated industrial goods, including cars and airplanes, and a wide range of agricultural products, including soybeans, sugar, coffee, orange juice and tobacco. Yet little of this wealth has trickled down to the poor. A relatively small group of Brazilians live extremely well. Along the coastal road that runs south from Rio de Janeiro to the port of Santos, there are hundreds of luxury holiday homes, equipped with state-of-the-art yachts, ski-jets and beach buggies. But this conspicuous wealth coexists with abject poverty. This is most visible in the spectacularly beautiful city of Rio de Janeiro, where from the expensive hotels along Copacabana beach you can see thousands of flimsy shacks built by the poor on the sides of the mountains that rise up sharply from the coastline. Some 25 million Brazilians, out of a population of 175 million, have such a low income that they go hungry.
Brazil’s social inequalities, which are more marked than in almost any other developing country, are largely the result of its history. The Portuguese, who colonized Brazil in the 16th century, set up huge estates, known as capitanias, through which they organized the economic exploitation of the country. Only one president – João Goulart – ever seriously talked about reforming this highly concentrated system of land distribution, which led to the creation of an underclass of disenfranchised poor Brazilians, and he was overthrown by a military coup in 1964. The generals who ruled Brazil for the next 25 years achieved high rates of economic growth but did nothing to reduce the inequalities.
The return to civilian government in 1985, though warmly welcomed by the population at the time, has had disappointing results. Governments have enacted market reforms, as recommended by the IMF. The economy has stagnated and millions of Brazilians remain excluded from consumer society. Unable to find a job in the formal economy, they are forced to scratch out a living in the vast shantytowns that encircle all the country’s large cities. Drug trafficking has penetrated many poor areas and crime rates are rocketing.
Opinion polls have repeatedly shown that people voted for Lula because they want change in government policies, with a much greater emphasis on economic growth and an end to social exclusion. So far, President Lula’s achievements have been modest, largely because he has had to water down his reforms to get them approved by Congress. He is also respecting an earlier promise not to default on a huge public debt, inherited from the previous administration, even though debt servicing currently absorbs a colossal 10 per cent of national income.
