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Even though it grew at very high rates in the past, Brazil still has one of the most unequal distributions of income in the world. This situation must be reversed. A lack of economic and social democracy threatens democracy as a whole. The values of social solidarity are in decline. State institutions, politics and politicians are viewed with increasing hostility.
This state of affairs has become more acute over the past two decades as a result of recession or stagnation. Since 1990, Brazil–as with other Latin American countries–has been made into a laboratory for disastrous economic recipes that damaged its productive capacity, dismantled the fabric of society, weakened the state’s ability to regulate and increased its vulnerability to outside pressures.
The Brazilian Workers’ party (PT), in alliance with others, is now putting in place a project that combines economic growth with income redistribution, deepens political democracy and asserts the sovereignty of our country in the world.
We inherited a heavy burden. The currency suffered a sharp devaluation against the dollar and international credit dried up. The new government managed to overcome this situation and confound forecasts of economic collapse. Fiscal discipline, high interest rates in the short term, an aggressive export policy and tax, and social security reform have helped revive both the economy and national and international confidence.
A broad social and political coalition was formed, bringing together state governors, parliament, the trade unions, the business community and other sectors. There are times when only a major coming together of wills can overcome situations of dire crisis.
As a result, the exchange rate has stabilised, inflation has dropped below 9%, the country’s credit rating has improved, the debt burden has fallen. Export credits have been re-established and this year the balance of trade will run a $20bn surplus. In six months, conditions for a return to growth and a boost to employment have been achieved.
The commitment to fashion a new economic model calls for forceful policies, such as our Hunger Zero and First Job programmes. Fighting hunger includes both structural measures–in support of small farmers, education, health, housing, water and sewage treatment–and emergency relief to those suffering from malnutrition.
The social and political conditions are now in place to launch a sustainable cycle of development. That will require the enlargement of the internal market, particularly for mass consumer goods, by integrating into it millions of excluded citizens. Agrarian reform is also fundamental if the Brazilian economy is to be rebuilt. And it will play a crucial role in making the country fully democratic.
The state must also act decisively to carry out its regulatory role in the economy. The loudly proclaimed achievements of globalisation have failed to materialise, made worse by the climate of recession throughout the world. The advice offered by international organisations, and slavishly followed by many, has brought about the deindustrialisation of vast expanses of our planet.
The rhetoric of free trade contradicts the protectionist practices of the rich countries. The uncontrolled flows of financial capital can destabilise a country in a matter of hours. Hunger, unemployment and social exclusion have reached alarming proportions in developing countries. Indeed, there are huge pockets of poverty even in wealthy societies.
This state of affairs demands a new kind of foreign policy to help build a new world order that is both fairer and more democratic. An end must be put to international financial anarchy and the pressures it exerts on developing economies. It is essential that both overt and covert protectionism which marginalises poor countries be done away with.
We are committed to the peaceful settlement of conflicts, defence of multilateralism and a world order that respects both human rights and international law. That demands reform of multilateral bodies, including the UN and its security council; indeed, Brazil has claimed the right to a seat as a permanent member of the council.
The main flashpoints of international tension result from inequalities that prevail in the world, with its billions of unemployed and hundreds of millions that go hungry and ill, with its unfair trade regime. Against this background, South America has become the top priority of the new Brazilian foreign policy, with an agenda for a customs union, economic integration and a future common currency–as well as to pave the way for an elected regional parliament and a common regional foreign policy.
Brazil, the country with the world’s second largest black population, has also reinvigorated its ties to Africa and re-engaged with the Arab world. The creation of the G3 group by Brazil, India and South Africa represents a decisive step in strengthening south-south relations, while we have forged a mature relationship with the US and Europe.
The Brazilian experiment is not intended as a model. The Workers’ party that currently governs the country was forged around a specific social and political alliance. This young leftwing party rose out of the working classes during the declining years of the military regime. Its appearance in 1980 coincided with the predicaments faced by social democracy and the decline of the USSR and the countries of the communist bloc. It also coincided with the conservative wave that swept the world and even contaminated segments of the left.
Its programme blended economic and social demands with calls for political freedom. It had the support of broad segments of the middle class, of youth and of new social movements. The PT defines itself as a mass leftwing socialist party that is democratic in its internal organisation. The party helped rebuild the trade union movement and has given an impetus to social struggles throughout the country, as well as playing an important role at local government level, where it has pursued anti-corruption policies.
The experience of government has now renewed the PT. And the ties between state and society have been revisited by the adoption of initiatives, such as the participatory budgets, that allow citizens’ oversight of public policies.
Courage is needed to implement an ambitious reform programme that can immediately improve the living conditions of the majority of the population. However, such changes must be understood as only one aspect of a broader process of social transformation. Political realism must not be taken as a justification to abandon the dreams that lie at the foundation of the thinking of the left. Neither can it mean disenfranchising the votes of more than 52 million Brazilians.
Luiz Ignacio Lula da Silva is president of Brazil and honorary president of the Workers’ party.