[ECONOMY] The State and Economy in Brazil: An Introduction

The State and Economy in Brazil: An Introduction
by Rosa Maria Marques and Paulo Nakatani

MONTHLY REVIEW
Volume 58, Number 8
February 2007

These articles were written five months before the first round of presidential elections in Brazil, on October 1, 2006. The second round, on October 29, saw Lula reelected with 58.3 million votes (60.78 percent of all valid votes), beating Geraldo Alckmin, the candidate for the Partido Social Democrata Brasileiro (PSDB), the party of Fernando Henrique Cardoso, Lula’s predecessor in office. Lula won this second four-year mandate after a campaign revolving around ethical issues and allegations of corruption against government officials and high-ranking members of his Partido dos Trabalhadores (PT)—allegations from opposition parties, right and left. The campaign included the pathetic episode of PT officials trying to buy information on candidates from the PSDB in the State of São Paulo (economically and politically speaking, one of the most important states in the union, with a strong oppositional streak), and a concerted nationwide media campaign for Alckmin on a scale never before seen in Brazil.

In percentage terms, Lula received slightly fewer votes than in the second round of the 2002 election (taking 61.27 percent of the vote) when he won office for the first time. But the results were surprising given that some of his highest-ranking officials left their posts after being accused of corruption. If we analyze the election in terms of voter distribution, bearing in mind the geography of the states, voter income, and size of the county we find a country divided. Lula won in twenty out of twenty-seven states, carrying all the states in the Northeast, the poorest in Brazil, and all but one in the North, the second poorest. He won three states in the Southeast and two in the Center-West, including the Federal District where the country’s capital is located. And he lost in all the Southern states. Research shows that the smaller and poorer the voting district, the more votes went to Lula, and the same applies when looking at the real income of voting groups. Yet another fact revealed by this election was that the poorest segments of the population were not influenced by the so-called opinion makers, particularly the press and television.

Among the endorsements Lula received before the second round was that of the Landless Workers’ Movement (Movimento dos Trabalhadores sem Terra, MST), which did not endorse him before the first round. Joao Pedro Stédile, an economist, leader of the MST, and a staunch critic of Lula explained the endorsement in an interview for the Agência Carta Maior:

"Electing Alckmin would mean a return of U.S. hegemony in Latin America. The continent is in transition, and in virtually every election the peoples voted for anti-neoliberal candidates. That created three kinds of governments: a left-wing group—Venezuela, Bolivia and Cuba—a moderate group in transition from neoliberal policies and confronting U.S. policies—Brazil, Argentina, Uruguay, Peru and Ecuador—and a group of faithful allies of the United States—Chile, Paraguay and Colombia. An Alckmin victory would mean a pro-U.S. rupture, with Brazil going to the group of servile allies."

An editorial in the October 11, 2006, edition of the MST-influenced weekly, Brasil de Fato, explained that the most important reason for endorsing Lula was that his government had respected democratic institutions. The magazine told readers that they should vote for Lula regardless of the “disappointing results for the working class