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- Lula and Chavez: Linkages & Divisions in Policy
- In both Venezuela and Brazil, the decades of the 2000s and early-mid 2010s were denoted by the rule of democratically elected leftist presidents: Hugo Chavez in Venezuela, and Luiz Ignacio Lula da Silva in Brazil. Both profound similarities and stark differences existed in the administrations of both presidents, with major policy differences occurring despite the overarching themes of both presidencies being generally rooted in leftist ideology. Ultimately, Lula’s presidency enacted numerous social reforms, despite Lula’s pivots to the center with regard to economic policy. Chavez enacted similar reforms, despite never pivoting to the center. Chavez’ reforms were also far more dramatic and direct, while Lula chose not to enact reforms in such a jarring manner. In sum, Lula’s policies served to exhibit center-left tendencies, while Chavez differed in his rapid embrace of socialism.
- Luiz Ignacio Lula da Silva, colloquially known solely as “Lula,” had a rather tumultuous upbringing, to put it lightly. Born one of twenty-two children to an alcoholic father, Lula dropped out of school in the fourth grade to support himself. After working a series of jobs, Lula found himself employed as a metalworker in Sao Paulo, to which he subsequently became highly active in the metalworkers’ union. Lula organized strikes, earning the ire of Brazil’s military regime - briefly spending time in prison as a result. In the late 1970s, Lula was instrumental in founding the Partido dos Trabalhadores (PT), otherwise known as the Workers’ Party. The Workers’ Party grew to prominence in the early 1980s, describing their goal as the following: “....constructing a socialist society without exploiters or exploited.” However, by 2002, the PT exhibited a marked shift towards the center, embracing neoliberalism and the economic policy of Cardoso, the centrist president that preceded Lula. With regard to economic policy itself, Lula made careful, concerted efforts to not disrupt the neoliberal order, serving to continue Cardoso’s policies in many respects during his presidency. In 2002, the summer before he was elected, Lula penned a piece dubbed “Carta ao Povo Brasileiro” (Letter to the Brazilian People). In this letter, Lula assured that the interests of both foreign and domestic investors would be protected, pledging to “sustain many of the Cardoso-era economic policies and to honor the agreement that Brazil had previously struck with the International Monetary Fund.” The creation of this letter solidified a marked change in PT policy, which in decades prior had been steeped in socialist rhetoric, with such statements as “Land reform is for the PT as oxygen is for mankind.” Now, Lula was pledging to uphold the same neoliberal economic policies fostered by Cardoso, who Lula had campaigned against using drastically different rhetoric in the 1994 and 1998 Brazilian elections. In these elections, Lula railed against privatized industry and the International Monetary Fund, “offering instead a classic South American anti-capitalist program,” as described by foreign observer Nicholas Lemann. However, Lula never enacted such policies, choosing instead to focus on centrist stability in managing Brazil’s economy. This change in rhetoric was demonstrated during Lula’s tenure as president, with several economic policies being enacted that mimicked Cardoso’s presidency. Lula maintained the stringent monetary and fiscal policies of Cardoso, even actively running a fiscal surplus. Successfully countering inflation was one of the main economic policy achievements of the Lula administration, in large part credited to the fiscal surpluses he presided over. Inflation under Lula from 2003 to 2007 reached just 7.2%, markedly lower than the 14.9% rate seen under the Cardoso government, which had been lauded for curbing inflation. Rapid economic growth also served as another hallmark of the Lula administration, with Brazil experiencing growth rates nearly double that of the Cardoso administration under Lula. However, a large degree of this growth can be attributed to increased commodity prices, which naturally aided Brazil’s export-oriented economy, rather than the direct consequences of any of Lula’s policies. Regardless of its root causes, this economic growth did precipitate one of Lula’s major reforms: raising the minimum wage. From 2003 to 2008, the minimum wage in Brazil rose from 267 Reals to 371 Reals, a nearly 40% rise in only half a decade. This increase in the minimum wage resulted in numerous benefits for Brazilian society, particularly in the lower strata of Brazilian civil life. Examples of these benefits involve marked reductions in those living below the poverty line and those living in extreme poverty. Inequality also diminished during this time period, albeit slightly, with the Gini coefficient dropping by nearly three percentage points from 2003 to 2007. Ultimately, Lula’s economic policies remained largely similar to those of Cardoso, as Lula sought stability over radical leftist reforms. When asked about his centrist stances with regard to economic management, Lula responded with the following, stating that his economic views changed once he ascended to the office of the presidency: “They changed because, once you’re President, it’s like being a father. When you’re a son you think your father has all the money in the world. When you’re the opposition, or a union leader, you say the government has all the money in the world. When you become the government you find that the government doesn’t have the money you thought it did, and you have bills that are twenty times what you can pay.” Ultimately, this quote reveals the extent to which Lula’s perspective on economics changed during his tenure as a politician, and why exactly he abandoned the leftist views that denoted his early policy.
- Perhaps the most notable social policy enacted by Lula’s presidency was the Bolsa Familia program. Bolsa Familia was a conditional cash transfer (CCT) program that received widespread international and domestic adulation. The core tenets of Bolsa Familia involved providing cash to impoverished Brazilians with the caveat that the recipients must send their children to school and provide them with “basic preventative-medicine practices.” Bolsa Familia was a rousing success, providing aid to over forty million Brazilians while accounting for just 2.5% of all governmental expenditures. Ultimately, Bolsa Familia served as the hallmark of the Lula administration, garnering him widespread support from the impoverished sectors of Brazilian society, particularly in the poorer Northeastern regions. When Lula stepped down in January of 2011, he received approval ratings of above eighty percent, demonstrating just how popular his terms truly were. Ultimately, Lula’s presidency was denoted by centrist economic policy and leftist social policy, enacting effective yet pragmatic reforms that served to benefit all sectors of Brazilian civil society. In sum, Lula’s rule can be considered a strong example of a productive center-left presidency.
- In 1998, Hugo Chavez became the democratically elected president of Venezuela, despite orchestrating a failed coup just six years prior. Chavez was immensely popular, bringing with him a populist cult of personality that became inordinately popular amongst the Venezuelan lower classes. In 1999, Chavez established a new constitution through a referendum, otherwise known as the CRBV. The CRBV generally expanded human rights, providing more rights to indigenous peoples and housewives. Indigenous peoples were awarded greater autonomy and cultural respect, with housewives being granted the right to social security. The new constitution also had several measures relating to the state itself, with the CRBV “reaffirming the centrality of the state”, while also codifying the duty of the state to provide social rights. Despite this, the new constitution also served to directly aggrandize the power of Chavez, as the CRBV served to remove the Senate, further concentrating power within the office of the Presidency. The CRBV also allowed for provisions that granted the president almost complete control over the military, as it removed congressional oversight of the armed forces. Chavez also retained control of Venezuela’s state owned oil company, otherwise known as PDVSA, alloting him an immense degree of influence.
- What followed the enactment of the constitution was a marked economic downturn, with the Venezuelan economy shrinking at a precipitous rate after 2001. In response, Chavez called for the adoption of a “21st century socialism”. This came with the enactment of “missions”, missions aimed at improving the lives of the poor in the midst of such profound economic strife. Three major missions occurred: the Robinson, Barrio Adentro, and Mercal. Together, these three missions sought to alleviate poverty and the living conditions of the poor by providing literacy programs, healthcare, and food subsidies. The Mercal mission in particular was notable for serving roughly 40% of the Venezuelan population, providing barrios with needed food resources. In 2006, Chavez won re-election in a landslide, his platform buoyed by rising oil prices and the social programs he had carried out. Poverty and unemployment both fell precipitously as a result of the high oil prices. After his re-election, Chavez began to carry out his previously promised socialist reforms. He reformed the constitution, allotting himself the power to “modify articles that might be political or economic obstacles to the socialist transition.” Here, one observes Chavez’ attempts to further centralize power, in the process further undermining democratic norms and procedures. Later in 2006, Chavez nationalized the telephone and electricity industries, serving as a continuation and a solidification of his budding socialist policy. Cracks began to appear in Chavez’ vast social programs following the 2008 global financial crisis, to which Chavez had boasted that Venezuela’s socialist economy was immune to its effects. The opposite was ultimately proven true, with Venezuela being forced to cut spending and add additional taxes. The economy contracted, with Chavez being forced to lower the minimum wage. Ultimately, Chavez’ social programs suffered dramatically as a result of the global financial crisis. In sum, Chavez’ rule in the 2000s was denoted by wide-ranging attempts to aggrandize his own power, while also enacting sweeping reforms and programs aimed at spurring improvements in the lives of Venezuela’s poorest.
- With regard to similarities and differences between Chavez and Lula, several stick out. Of these, stark differences exist in the economic policy that both presidents pursued. While Chavez sought to nationalize industry and move rapidly towards a socialist policy, Lula desired to stay the course of his predecessor Cardoso, maintaining a strong market-oriented neoliberal economy. While Lula’s economy maintained steady and strong growth, Chavez’ economy was subject to the highs and lows of the international oil market. In terms of social policy, marked similarities existed between the policies of the two presidents. Both sought to ameliorate poverty through direct methods, with Lula’s Bolsa Familia and Chavez’ missions reflecting a profound similarity between the two presidents. With regard to democracy and democratic institutions, Chavez’ attacks on democracy were far more overt, as he directly sought to aggrandize his own power at the expense of democratic institutions and norms. Despite his massive popularity, however, Lula was not entirely free of scandal with regard to democratic institutions. The 2005-6 Mensalao scandal, a rough Portuguese translation of “Big Monthly Payment”, directly involved Lula’s party, the PT, in a far-reaching bribery scandal whereby the PT furthered its own legislation through under-the-table monthly payments to prominent statesmen. Although Lula was never personally implicated, the scandal did occur under his term as president, indirectly serving to undermine democracy. Ultimately, the Mensalao scandal serves to slightly diminish the major policy achievements of Lula’s administration, minorly undermining democracy. With regard to the effectiveness of their governance, Lula was able to govern far more effectively than Chavez, as the stability of his rule wasn’t predicated on oil prices.
- In sum, Lula was able to govern far better than Chavez, with stability denoting the Lula administration. The two differed on economic policy, yet shared numerous similarities with regard to their social policy.
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