Brazil: A blow from above after a collapse from below

September 22, 2016


Protests triggered by public transport fare increases in 2013.

Less than two years after Workers’ Party (PT) candidate Dilma Rousseff was re-elected as Brazil’s president, she was removed from office by the Brazilian senate.

The Brazilian right, which controls the senate, carried out a constitutional coup. In the process, they revealed their contempt for democracy.

Dilma committed no crime, much less one that could have triggered an impeachment process. Yet many senators who themselves face corruption charges voted for her impeachment and dismissal.

In doing so, the votes of these 61 predominantly old, white male, senators overturned those cast by more than 50 million predominantly youth, Blacks and women who voted for Dilma, as she is commonly known in Brazil.

The question remains, though, how did an internationally renowned left party like the PT, after four successive presidential election victories, find itself battling corruption allegations in parliament and confronted by huge protests in the streets.

To understand the coup, it is worth looking at the campaign waged by Brazil’s capitalist class against the Dilma government and the process of demobilisation of the PT’s support base.

Challenge from above

Internationally, the PT government, first under Luiz Inácio Lula da Silva and then Dilma, was not afraid to confront Washington. It played a critical role in the defeat of the US-backed Free Trade of the Americas Agreement in 2005.

But unlike former Venezuelan president Hugo Chavez, the PT never claimed it was building 21st century socialism at home, where its economic policies were much more conservative.

In an attempt to break with the right’s failed neoliberal policies, the PT sought to steer the country in a neo-developmentalist direction. It sought to industrialise the economy through greater state planning, financing and regulation.

The PT also drastically expanded social welfare programs. Seen as more than just a way to cut poverty, they helped expand the internal market, a vital plank of any industrialisation project.

The global boom in commodity prices and sharp rise in domestic consumption that Brazil experienced throughout the Lula years (2002-2008) helped propel economic growth. The PT’s neo-developmentalist strategy also benefited from the support of trade unions, the urban poor and industrial capitalists.

Under Lula, inequality and poverty rates fell: the income of the poorest 20% grew at a faster rate than that of the top 20% and 28 million Brazilians were lifted out of poverty.

At the same time, however, the wealth of the richest 1% grew even more. The biggest beneficiaries were the banks. Despite being among the fiercest critics of the PT government, the finance sector made record profits and received huge state support in the form of debt repayment.

Continuing a process that began under previous governments, during Lula’s reign financial institutions consolidated their hold over the economy.

This was not the only hurdle the PT’s strategy confronted. The commodities price boom steered investment towards primary industries at the expense of manufacturing, causing the economy to show signs of de-industrialisation.

Economic crisis

Confronted with the evident weaknesses in its strategy and the impact of the global economic crisis causing a collapse in commodity prices, the PT sought to turn this situation around, principally by targeting the banks.

The first steps in this direction were taken in 2011 when Dilma announced her government was going to tackle Brazil’s interest rates problem. Brazil has one of the highest long-term interest regimes in the world, with borrowers paying anything from five to 20 times the cost of the same money to lenders.

Alongside slashing interest rates, the government said it would lower prices in the electricity sector, raise tariffs, implement new controls on capital, devalue the local currency and kick-start a new industrialisation plan, to be spearheaded by the state development bank.

At first, Brazil’s industrialists publicly greeted the moves with enthusiasm as, on paper, many of them directly benefitted this sector. Not long after, however, they broke with the PT to join the financial sector in campaigning for Dilma’s removal. Industrial capitalists sided with the anti-government protests that kicked off in 2013.

The strong intertwining of class interests between industrialists and financial capital largely explains the fracture in the PT’s alliance with industrialists.

For starters, years of high profits in the finance sector meant many industrialists had begun investing in the sector. Also, the capitalist class as a whole was feeling the effects of declining economic growth with Brazil going into recession in 2014, falling profit margins and rising inflation.

For the capitalists, the way out of the crisis was not greater controls over capital and more investment, but a new wave of privatisations of public assets and social services.

Just as important was a rise in class struggle. The number of strikes in Brazil reached 873 in 2012, then more than 2000 in 2013.

Together, these factors helped strengthen inter-class solidarity against the PT government.

Collapse from below

Facing an uphill battle to win the 2014 presidential run-off, Dilma adopted an increasingly left discourse. The ex-guerilla and political prisoner declared that a vote for her opponent represented a vote for austerity and neoliberalism. Her anti-neoliberal discourse was crucial to obtaining a late swing that saw her get over the line.

Within days, however, Dilma said her government would implement some of the same austerity measures she had opposed during the campaign. The PT hoped such a retreat might win back the support of a section of the capitalist class.

But sensing weakness, the right began to plot Dilma’s ouster.

The problem the PT faced was that, although it won the elections, it had lost its ability to mobilise on the streets where the party had first come from.

In the 1980s, the PT emerged as a mass socialist workers’ party, forged out of trade union and anti-dictatorship struggles. Its growth over the next two decades was due to the PT’s ability to incorporate a broad range of left, popular and working-class sectors — and even segments of the middle class — into the party.

This was facilitated by the PT’s democratic structures. The party’s foundations were local participatory grassroots cells. It emphasised consensus and proportional representation on leadership bodies.

Perhaps most importantly, as a new party that had emerged from outside the political class, the PT could present itself as a clean alternative to the rotten political status quo.

For many, including some who had never supported the left, the PT was associated with a new way of doing politics. This image was bolstered by the programs it implemented at local and state level — such as participatory budgeting that involved local communities in public decision-making.

Before winning the presidency in 2002, the PT had steadily won control over more local and state governments. In Venezuela and Bolivia, the left won government on the back of massive upsurges in struggle. The PT’s 2002 win, however, was a result of accumulating forces and experiences at the institutional level.

Through this process, the PT slowly began to move away from its radical roots towards becoming a party geared towards elections and government.

The PT winning government placed pressure on the social movements and trade unions. The PT argued that the priority had to be defending its government from the right, even at the expense of social movements mobilising to defend and extend their rights.

This slow transformation of the PT led to several smaller, radical left currents leaving the PT: first in opposition to regressive social security reforms in 2004 and then over a corruption scandal that involved PT party leaders paying opposition parliamentarians for their votes on certain bills in 2005.

Big mobilisations

However, the scale of the gap that had emerged between the PT and the streets was graphically exposed by the demonstrations that kicked off in 2013.

The 2013 mobilisations revealed that opposition to the PT was not only limited to big business and the traditional middle classes who had always been hostile to the PT.

The initial motive for the June 2013 protests — a rise in public transport fares — was really just the trigger for people to begin discussing important problems common to residents in large cities the world over.

Access to social services had dramatically expanded under the PT, but these mobilisations focused on the poor quality of these services that were experiencing extreme stress.   

Resolving these problems requires huge state investment. This would only have been possible by raising taxes on the rich or cancelling government debt repayment — steps the PT was unwilling to take.

The largely decentralised and spontaneous nature of the movement that erupted in 2013, combined with the inability of the PT to grapple with a movement that in many ways was fighting for the same things it had previously campaigned for, left a large vacuum that the right was able to fill.

Social movements, such as the trade unions and the Landless Workers Movement (MST), were unable to take the lead, in part because many saw them as being too close or even the same as the PT.

Confronted by the capitalists, the PT’s polling plummeted as new cases of corruption engulfed the party daily. With the social movements disorientated and demobilised, the PT opted to retreat towards the right, thereby turning on what remained of its traditional base.

After that, it seemed only a matter time before the right sought to achieve via other means what it had been unable to do through elections — remove the PT from government.

[Federico Fuentes is a member of Australia’s Socialist Alliance and co-author of Latin America’s Turbulent Transitions.]

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