Perspectives after Lula’s victory in Brazil

Bolsonaro loses the election on a razor’s edge, but Bolsonarism is more alive than ever. Lula and the Workers’ Party now have the historic mission of stemming the political tendencies simmering in the Brazilian electorate.

Last October 30, 2022, Brazil experienced the most polarized elections since the end of the military dictatorship in 1989. The electoral contest was won on a razor’s edge by Lula – born Luiz Inácio Lula da Silva – who will return to the Palácio for the third time da Alvorada also thanks to the political support of the country’s main centre-right party, the PSDB (Party of Brazilian Social Democracy). Lula – founder and historic exponent of the Workers’ Party (PT) – wins the presidency after spending 18 months in prison, after a 12-year sentence for corruption that prevented him from running for president in 2018, thus paving the way to the power of Jair Bolsonaro. Lula was only able to prove his innocence after the “Vaza Jato” scandal came to light, demonstrating the political nature of the prosecution against him and the involvement of FBI agents. The leader of the Brazilian far right Jair Bolsonaro thus emerges defeated from the electoral contest, despite attempts to use the public machinery in his favor (note 1) and to hinder the vote in the areas of the country most favorable to Lula.

While Bolsonarist supporters march invoking military intervention and circulating false news of fraud, all the rest of the political axis that supported Lula with a broad front in defense of the young Brazilian democracy is breathing an air of a return to normality. The situation, however, is far from pacified: the reconstruction work will be tough and Bolsonarism (even without Bolsonaro himself) is far from being definitively defeated. The left wins in Brazil thanks to the return to the political arena of Lula, one of the most popular leaders in the world, who will attain the presidency for the third time in January 2023 at the age of 77; due to age limits, he will hardly aim for re-election in 2026. As demonstrated by the defeat of Fernando Haddad in 2018, without Lula’s popular leadership, the left struggles in the most popular segments of the electorate; on the other hand, the Bolsonarista axis could also thrive with a Bolsonaro exit (at the moment improbable) thanks to political familism and the support of the white bourgeoisie enraged by the post-2014 crisis. In order to avoid a strengthening of the extreme right in the next 4 years, the analysis of the political tendencies within Brazilian society therefore becomes crucial. In this article, we will summarize the 4 trends that we believe are most relevant.

The first point that catches the eye is the growth of the former president in office in the poorest regions, where historically the PT collected more votes (note 2).

Second, the ideological apparatus of the Chicago school falls apart in the political arena.

The ultra-liberalism of some proposals in the electoral campaign was in fact the Achilles’ heel of Bolsonarism, preventing the outgoing government from greater support among lower-income families. In this sense, the proposal – put forward by Economy Minister Paulo Guedes (graduated in Economics at the University of Chicago) just one week before the elections (note 3) – to de-index the minimum wage to the previous year’s inflation is exemplary . If the rule proposed by Guedes were applied starting from 2002, the minimum wage in 2022 would be calculated at around 502 reais, less than half the current value of 1212 reais (MADE/USP 2022). (note 4)

Thirdly, the PT grows in the city of São Paulo and loses ground in the internal areas of the state (reversing the 2002 figure in the largest constituency of Brazil). (note 5)

The fourth and final aspect concerns the role of social networks during the election campaign. As of 2018, the Brazilian left has been a case study of the general difficulties of progressive forces in using social networks to their advantage. On the contrary, the far right has demonstrated an excellent ability to mobilise, both on social networks and in messaging apps such as Telegram and Whatsapp. An increased online presence of pro-Lula militants and propaganda appears to have helped slow Bolsonaro’s growth in the final weeks of the election campaign.

Each of these points will be decisive in the years to come. While on the one hand Lula’s ability to compromise will be of fundamental importance to bring on his side pieces of Parliament at the moment hostile, on the other hand the new government and the parties that support it will have to keep the level of attention on social issues high. mending the fractures caused by 4 years of Bolsonaro government and aiming to build a prosperous and inclusive society. While the executive led by Bolsonaro dies loudly in the ongoing protests, Bolsonarism is more alive than ever. Lula and her executive will have the difficult task of sending him forever into the dark corner of history.

NOTE:

1 In August, Bolsonaro created aid for 35 billion reais valid for only 5 months. According to MADE/USP estimates based on the multiplier effects of social benefits (Sanches and Carvalho 2022), the package inflated the 2022 growth rate by 1.7 percentage points.

2 Bolsonaro’s rise among the poorest has been attributed to the approval of permanent aid of 600 reais; however, the Bolsonarist current in Parliament voted against this measure, which was approved thanks to the votes of the opposition (PSOL, PSB).

3 Under the current rule, the government is obliged to adjust the value of the minimum wage and pensions at least for the previous year’s inflation. Recently, Minister Paulo Guedes said he wanted to change this rule, weighing the adjustment for inflation expectations. As discussed by MADE/USP economists, the problem with this shift is that expectations tend to underestimate actual inflation. In other words, since actual inflation tends to be consistently higher than expected, the rule can lead to a real loss by reducing purchasing power.

4 According to the Inter-union Department of Statistics and Socioeconomic Studies (DIEESE), the minimum wage for a family of four should be around 6,388.55 reais, about six times higher than the current amount.

5 In the State of São Paulo, Lula won in the capital with 53.5% of the votes, but did not even reach 40% inland (TSE data).

Bibliography

DIEEESE (2022). Analyze the Basics – Minimum Nominal Salary – Outubro/2022 https://www.dieese.org.br/analisecestabasica/salarioMinimo.html
MADE/USP (2022). Like 4 years of readjusting the minimum salary, you can impact your shopping cart. https://madeusp.com.br/2022/10/como-4-anos-de-reajuste-do-salario-minimo-podem-impactar-seu-carrinho-de-compras-do-mes/.

Sanches, MDS, & Carvalho, LBD (2022). Multiplier effects of social protection: a SVAR approach for Brazil. International Review of Applied Economics1-20.

TSE (2022) Resultado Eleições Anteriors https://www.tse.jus.br/eleicoes/eleicoes-anteriores/

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