RIO DE JANEIRO, BRAZIL -- People of all ages flooded the plaza in front of the Rio de Janeiro state legislature last night, where so many protests and rallies have taken place through the years. They climbed up statues and light posts, waved the red flag of the Workers' Party (PT), chanted slogans from campaigns past, hugged, kissed and reveled in the heady sensation of the unthinkable made real. Luiz Inácio Lula da Silva, seventh child of a woman who never learned to read or write, factory worker, co-founder of the PT and three-time failed presidential candidate, was president-elect.
They say that in Brazil, "Everything ends in samba," so if it's good for soccer games, barbecues and weddings, why not a presidential election? At 10:20 p.m. when the official results were announced, a cacophony of car horns, whistles and shouts momentarily drowned the samba out, but the music in the streets of downtown Rio had already been going on for a good five hours and would continue for five more. Drum troupes, fire jugglers and beer vendors mixed it up with the old guard of the PT who gathered here to bear witness to history. Though many of them represent the same radical branch of the party that Lula had to distance himself from in order to win the election -- amidst so many PT flags, there flew the odd Cuban and Palestinian one -- it is hard to grasp the full significance of Lula's victory without understanding where he and the PT are coming from. A memorial on the legislature steps paid respects to "fallen comrades" -- party leaders and other activists, some killed during the military dictatorship, others the victims of unpunished assassinations. In the air was the feeling of vindication that only those who have fought and lost can know. "I've waited 20 years for this day," cried one gray-haired PT stalwart, tears welling in his eyes as he embraced an old friend. "I've been waiting my whole life," said the other.
In São Paulo, addressing hundreds of thousands of supporters, Lula put it plainly: "Hope has won out over fear." Indeed, this usually cynical country has taken a leap of faith, "dared to be happy" as a popular song puts it. In the end, Lula won not so much because of the passion of his hardline backers, but because common voters believed that he could and would deliver the social change he has promised. And they had plenty of opportunities to get cold feet. For months international investment banks have been downgrading Brazil's government bonds, saying that a Lula presidency would likely lead to a default. This caused the collapse of the real, which has led to rising prices for all imports, including oil, and a spike in interest rates. Lula's opponent -- and the current government's candidate -- José Serra, unable to effectively take up the banner of change, exploited the economic situation by focusing most of his campaign on Lula's inexperience and alleged inability to get Brazil out of the crisis.
"Beware the dangers of incompetence" was one of his slogans, and his TV spots featured a famous actress saying that she was afraid of what would happen to Brazil if Lula were to win.
But as the election progressed, it became clear that Serra's approach was not working. Lula seemed well-prepared, serious, evenhanded; furthermore, he delivered a simple, devastating comeback to Serra's attacks: "If you know how to get us out of the crisis, and you are in the government, why haven't you done it already?" Increasingly frustrated and bordering on desperation, Serra began to run ads showing misery and chaos in Argentina and Venezuela, claiming that Lula was "similar" to former Argentine president Fernando De la Rua and Venezuelan president Hugo Chávez (how one candidate could be similar to two such dissimilar leaders is hard to understand). He even tried to draw a connection between Lula and Columbia's FARC guerilla army, but was gagged by the Federal Election Court. Amazingly, none of these scare tactics produced any serious effect on public opinion: Lula was polling at 65-percent support three weeks ago -- when the remaining two candidates from the first round of voting endorsed him -- and finished with just over 61 percent yesterday.
The numbers bear pondering. In an incredibly diverse country of 175 million people, Lula was able to attract and maintain the support of 52 million voters. While many of these are poor rural workers betting on Lula's agrarian reform proposals or left-leaning intellectuals and college students, the vast majority were middle- and working-class families, and their motives could not have been simpler: Eight years of neoliberal policies under Fernando Henrique have left them financially worse off.
This is something that seems to have slipped under the radar of many economic commentators, who have focused on the spectacular implosion of Argentina and not on the steady deterioration of wages in Brazil. In a recent Newsweek article, Robert Samuelson interpreted growing criticism of the Washington Consensus as a rejection of free-market ideas and repeated the old economist's adage that without a free market there is no incentive to work, innovate and price goods in line with their cost of production. But the free market as an abstract concept is beside the point -- and conflating pure economic theory with the pragmatic demands of real-word policymaking is partly how the International Monetary Fund got into trouble in the first place. In the 1990s, the IMF demanded the privatization of state-owned enterprises throughout Latin America, but did not have any mechanism to guarantee that these privatizations were carried out fairly and efficiently. Deregulation of capital markets was carried out quickly and haphazardly, without an eye to the potential vulnerability developing countries would face. Most importantly, financial austerity was pursued as a goal so preeminent that social programs were crowded out of the political discussion. Benefits there surely were, but in the end, they went almost exclusively to the wealthy and well-connected. Brazil was no exception -- it entered this election with the highest rate of income inequality in the world.
Such an extreme concentration of wealth has begun to impose high social costs on Brazilian society. Violence and organized crime are paralyzing Brazil's cities, while rural poverty impedes efforts to protect Brazil's natural resources. The Rio daily Jornal do Brasil welcomed the new president by pointing out that he faced, "on the one hand, 12 million unemployed, innumerable under-employed . . . a terrible prevalence of explicit misery, and on the other hand, total external vulnerability." It is quite an inheritance. But if ever a president had the backing of the Brazilian people, it is this one.
As we were leaving the party in downtown Rio last night, a friend turned back to take in the spectacle once more. "Have a good look," she said. "It will be a long time before you'll see Brazil so hopeful again." Lula and his team know what they are up against, and he has warned against the dangers of disappointment. Last night in São Paulo, he compared the campaign to an infatuation, and the presidency to a marriage. "Up till now things have been easy," he said. "The hard part is still to come." Maybe so, but the truly hard part -- the difficult transition from a cruel military dictatorship to a vibrant participatory democracy, one in which a candidate like Lula can win the presidency -- has already been accomplished.
