Upcoming Brazillian Election May Determine Country's Economic, Political Future
By Kavin Paulraj
Opinions Writer

On December 13, 2001, Argentina fell apart. For 20 years, the Argentine government had received funds from the International Monetary Fund, cut back on social spending, increased privatization of important industries and opened up its markets. The more loans Argentina received, the more annual interest it kept paying back to international lending agencies. The currency plunged; it had been tied to the dollar in 1998, which caused more monetary woes. Prices were increased and wages were reduced, thanks again to IMF arm-twisting, and people began strikes and protests. Investors began pulling their investments, much of the cash only re-invested through the same international lending agencies as "aid money" back into Argentina. Then, on December 13, the government announced it couldn't handle the economic crisis. People tried to pull their savings from the banks, the public rioted and looted shops, the police shot at demonstrators, three different people filled the post of President in one week...

You may be wondering what this has to do with this month's Brazilian elections. When I arrived in Brazil in February of this year, the currency, the Real, was R$ 2.18 to the US dollar. In August, it had climbed to R$ 3.18. Indeed, the same policies that doomed Argentina have plagued countries such as Uruguay and Brazil (the IMF really has only one blueprint of development for all countries) and the public is tired of dealing with fickle Wall Street investors. The Argentine factor has swung the public support in favor of economic policy change. On October 6, Brazilians voted in high numbers for Lula (Luis Ignacio da Silva), the leftist Workers Party candidate who is the only hope against the IMF gang. He now faces a runoff against Jose Serra, the current conservative government's hand-picked candidate.

When I studied in Brazil from February to July, I asked many people about their social troubles. Millions of urban workers live in favelas-decrepit shantytowns-while millions of their rural counterparts starve in the poor northeast whenever the landowners decide they no longer need them. The most common refrain was that as long as Brazil kept paying exorbitant interest on its $290 billion external debt (no one even dreams of paying off the principal yet), it could not direct adequate funds towards housing, food and water for the poor. Brazil has the worst income distribution in the world after South Africa and Swaziland, a result of centuries of oligarchic rule. But during the 1970s, the opposition was building. Catholic priests, professors, intellectuals and unions began to organize against the military regime established in 1964 and for the oppressed classes of society. From a metalworkers' union in Sao Paulo, a man nicknamed "Lula" rose through the ranks and helped found the socialist Workers Party (PT) in 1979. Lula has since contested three elections (in 1989, 1994 and 1998) and, though he advanced to the run-off each time, a coalition of conservative elites with mainstream media support prevented the PT from winning. The PT improved its image through successful local governments, steadily building its base, and on October 6, it received 46.4 % of the public vote, twice as much as that of Jose Serra (23.3 %), and Lula is now the favorite to win the runoff on October 27. The third- and fourth-place candidates, Antonio Garotinho and Ciro Gomes, who combined for 29.9 % of the first-round voting, both came out on October 9 in support of Lula and the PT. The odds are stacked overwhelmingly in Lula's favor. The first burning question is: Can he finally win?

But the second question is the one on everyone's minds. What will a PT national government look like? For each election campaign, the PT has changed its rhetoric slightly, taking a step further toward the political center to gain more votes. Businesspeople and international investors are scared most of all, to the extent that earlier this year, Goldman Sachs declared that "Brazil will not be allowed to elect Lula." This forced the PT to reassure investors and the IMF that they would maintain the status quo-the capitalist model-and would not default on loans. Despite that statement, banks and investors have been scurrying to re-invest their money in "safer" countries in case Lula is elected. This is creating a self-fulfilling prophecy; as more money is yanked, the economic situation worsens and worsens, such that the "fear of Lula" could cause a crash even before Lula takes office! Fortunately, Goldman Sachs and the IMF cannot vote in the Brazilian election. That is up to the people, and the people want change.

Brazil is at a crossroads. Keep an eye on the runoff elections on October 27 to see how the future will shape up for South America's biggest nation. If Argentina's political woes were mirrored by their early exit in the 2002 football World Cup, then maybe Brazil's winning performance is foreshadowing some positive change for the povo brasileiro-the Brazilian masses.