Lula’s Second Act

Lula’s Second Act

If the former Brazilian president returns to office this fall, the countries with the largest economies in the region will all be governed by left-wing leaders for the first time in history.

Luiz Inácio Lula da Silva at a campaign event in Minas Gerais in May (Douglas Magno/AFP via Getty Images)

Brazil’s recent history is summed up by three covers of the Economist, each of which featured a variation on one of the country’s most iconic symbols: the statue of Christ the Redeemer. The first, published in 2009, shows the statue as a rocket launching itself into the sky, under the title “Brazil takes off.” On the second cover, from 2013, the rocket statue is in a spin dive, out of control—“Has Brazil blown it?” The third cover appeared in June 2021, with the statue motionless, possibly comatose, wearing a mask attached to an oxygen tank. The diagnosis is unequivocal: “Brazil’s dismal decade.”

With presidential elections coming in October 2022, polls indicate that most Brazilians are inclined to entrust the task of running the country back to Luiz Inácio Lula da Silva, who was president from 2003 to 2010—a period that, in retrospect, seems almost like a golden age. Years after leaving office, Lula was convicted without evidence (or with manipulated evidence) in nineteen different corruption trials, subjected to merciless judicial persecution, and imprisoned for seventeen months, before being fully exonerated by Brazil’s Supreme Federal Court. Now he appears once again to be the candidate to beat. Five of the six most recent electoral polls show that Lula could win in the first round on October 2 with over 50 percent of the vote—in other words, without the need for a runoff against the far-right incumbent Jair Bolsonaro, who has run the country disastrously since 2019.

With the election of Alberto Fernández as president of Argentina in 2019, Gabriel Boric in Chile in 2021, and Gustavo Petro in Colombia just last week, all eyes are now on Brazil. Lula’s return to power would mark a total change of course for South America: for the first time ever, the countries with the largest economies in the region would be governed by left-wing leaders.

The (First) Lula Era

During his tenure, Lula—the former leader of a metal workers’ union and the charismatic founder of the Central Workers’ Union (CUT) and the Workers’ Party (PT)—managed to spur economic growth, social spending, and increased public investment in critical sectors of the economy while overseeing an austere monetary policy, mostly thanks to booming commodities prices and exports to China. When Petrobras, the state-owned oil-and-gas giant, discovered huge deep-water oil fields, Brazil became an energy superpower. The Bolsa Família (family allowance) program—a monthly payment to poor families that met certain conditions, such as having their children vaccinated and enrolled in school—lifted 40 million Brazilians out of extreme poverty. An increase in the minimum wage turned tens of millions more into lower-middle-class consumers, boosting the domestic market and, consequently, international investment and company profits.

However, Lula’s government did not promote any real reform to the country’s power structures while it had the political capacity to do so. The lives of the poorest improved considerably, but social inequalities remained intact. To this day, Brazil has levels of wealth concentration equivalent to those of late-nineteenth-century Europe. The tax system has continued to be extremely generous to billionaires and corporations while penalizing the middle class and the poor, who pay high direct and indirect taxes and receive low-quality public services in return. Political reform also remained in the drawer, allowing the proliferation of myriad parliamentary formations that exist mainly to deliver posts and budget modifications to their local clients. Furthermore, Lula’s government took no measures to reduce the influence of the few large, private groups that have a virtual monopoly on audience share of the country’s news media. And nothing was done to punish those responsible for the crimes of the 1964-1985 military dictatorship or to democratize the armed forces, which continued to take pride in their past criminal actions in the name of the fight against the “communist danger.”

The Lula government made social advances in a handful of key areas. It introduced racial quotas for college admissions, which gave millions of Black and mixed-race young people the opportunity to access higher education for the first time. Domestic workers were given social assistance and higher wages, which provoked a furious reaction from wealthy elites and part of the middle class. But other historical demands of Brazil’s social movements were forgotten or watered down. While the Lula administration guaranteed significant funding for small family farms, for example, it also provided extraordinary support to big agribusiness and only slightly increased the number of titles transferred to landless workers as compared to the previous center-right government of President Fernando Henrique Cardoso, a former sociology professor and founder of the Brazilian Social Democratic Party. The basis of Lula’s macroeconomic policy also remained essentially the same as that of the Cardoso government—a “tripod” of a floating exchange rate, a primary budget surplus, and inflation targets.

Lula’s two terms profoundly changed the social base of his electorate. In 2005, during what came to be known as the mensalão scandal, it came to light that the PT had received undeclared funds for the 2002 electoral campaign and partially redistributed them to allied parties. It was an illegal but common and traditionally tolerated practice in Brazil, but the incident nevertheless shattered the PT’s carefully crafted image as a clear alternative to the clientelist practices of the “old” Brazilian politics. From the 2006 elections onward, the PT lost the support of its traditional working-class and middle-class base and attracted poorer voters who lived in the most disadvantaged areas of the country—especially in the northeast—and who benefited the most from the Lula government’s social policies. Brazilian political scientist André Singer, who was Lula’s spokesperson and press secretary until 2006, dubbed this configuration “Lulism”: early support for Lula stemmed from the desire for a break with the past, but by his second term, it came more from expectations that a strong state should improve the living standards of the population, particularly the poorest, without political radicalization or mass mobilization that would threaten the status quo. Social movements and unions, previously the core of the PT’s identity and the subject of lively internal debates, became less important than those elected to parliamentary or administrative positions and bureaucrats who controlled affiliates’ votes in party conventions.

None of this seemed to matter when Lula finished his second term with a popularity rating of more than 80 percent and a 7.5 percent jump in GDP from the previous year. He managed to handpick his successor, Dilma Rousseff, a former Marxist guerrilla turned no-nonsense technocrat, who had served as Lula’s chief of staff. She was unknown to the general public and little loved by her government peers, but, with Lula’s tireless support, she became Brazil’s first female president.

The Unraveling Rousseff Years

Without Lula’s charisma and formidable talent for political mediation, Rousseff’s government floundered from day one. She became increasingly isolated from the PT’s social base both on the traditional left and among the Lulist underclass. Moreover, Rousseff never showed real interest in foreign policy, one of the strong points of the Lula government, under which Brazil became a protagonist on the world stage and a leader of the BRICS (the economic and political bloc of Brazil, Russia, India, China, and South Africa).

The first big shock for Rousseff came in June 2013, when huge demonstrations erupted in the streets. Millions of young people protested an increase in public transport fares and demanded a more efficient state, able to provide its citizens with quality education, healthcare, and transportation. “We want FIFA-standard services,” the demonstrators shouted. Securing Brazil’s role as host of the World Cup in 2014 and the Summer Olympics in 2016 had been triumphs for Lula, but symbols and promises were no longer enough. The response to the protests was mostly bureaucratic: a few vague promises without any real change of course. The demonstrations eventually ended, but with commodity prices beginning to wind down, it was evident that the tide was turning.

In 2014, several prominent PT cadres insisted that Lula run instead of Rousseff. Lula, perhaps out of fear that he had not yet fully recovered from the laryngeal cancer he had been diagnosed with in 2011, preferred that Rousseff run again. She was reelected with 51.6 percent of the vote, defeating the candidate for the Brazilian Social Democratic Party, Aécio Neves, by just over three points.

Immediately after her victory, under heavy pressure from financial markets and economic elites, Rousseff made a political U-turn. She dismissed her economic minister Guido Mantega, who had been a loyal member of the PT for decades, and replaced him with a conservative banker with close ties to finance. The government made heavy cuts to public investment and social protections and promoted a steep increase in interest rates. The result was a sharp drop in GDP (which fell by 3.8 percent in 2015 and 3.6 percent in 2016), a deep recession, and an explosion of unemployment.

The PT’s social and electoral base felt betrayed, and Rousseff’s abrupt change of course did nothing to decrease pressure from the opposition. From March 2015 onward, colossal protests, amplified by the media, multiplied throughout the country. Realizing Rousseff’s growing political fragility, Neves and his allies began to lay the groundwork for a parliamentary coup. A small accounting manipulation known as “budget pedaling”—which allowed Rousseff to hide the extent of the public deficit and supposedly helped her win reelection in 2014—became the pretext for impeachment, even though the same maneuver had been used repeatedly by Rousseff’s predecessors and would soon be used by her successors.

On April 17, 2016, the lower house approved the beginning of impeachment proceedings. A then-obscure far-right congressman from Rio de Janeiro, retired army captain Jair Bolsonaro, dedicated his yes vote to the army colonel who headed the infamous facility where Rousseff was tortured during the dictatorship. Less than one month later, on May 12, 2016, the Senate voted to suspend Rousseff from office, practically sealing her fate. When she left the Palácio do Planalto that evening, there were just a few demonstrators protesting the ongoing coup.

Michel Temer, Rousseff’s vice president and one of the architects of the overthrow, became the new president. He called on Henrique Meirelles, the president of the Central Bank during the Lula years, to head the Ministry of the Economy. They quickly secured approval of a constitutional amendment that limited spending growth until 2036, making significant public investments impossible.

Meanwhile, another storm was brewing. In early 2014, a group of federal judges and prosecutors began investigating a money-laundering scheme that had used a car wash in Brasília as a front. Gradually, the Lava Jato (car wash) probe expanded to allegations of corruption and bribery within Petrobras. The investigation also took aim at Brazil’s largest construction company, Odebrecht—which had maintained close ties with all Brazilian governments since the military dictatorship, financing the electoral campaigns of politicians of all parties—for using bribes to increase its operations throughout Brazil, elsewhere in Latin America, and in Africa.

Nobody disputed that corruption was (and is) a serious problem in Brazil—and 318 of the 594 members of the lower house who approved Rousseff’s impeachment were themselves under investigation or faced charges. But it became clear that for the Lava Jato prosecutors and one of the presiding judges in the case, Sergio Moro, the main objective was not to fight wrongdoing but to indict Lula at all costs. An Intercept investigation found that the prosecutors held secret meetings with U.S. Department of Justice officials without informing Rousseff’s government. With the prosecutors’ approval, the United States negotiated deals with witnesses in the Petrobras investigations without following the procedures laid out in the 2001 bilateral Treaty on Mutual Legal Assistance in Criminal Matters.

In the absence of concrete evidence against the former president, Moro convicted Lula using a dubious legal maneuver of his own invention: the “indeterminate act of office,” which was inspired, he revealed in an April 2018 Harvard University lecture, by a scene in the movie The Godfather. Moro sentenced Lula to twelve years in prison, accusing him of having received a beachfront apartment as a bribe for facilitating contracts between Petrobras and a big construction company called OAS. But the apartment never belonged to Lula, and he and his family never lived there.

Under Moro’s orders, Lula was arrested on April 7, 2018, six months before elections in which the former president was the front-runner in all polls. The arrest opened the way for the election of Bolsonaro, an unpredictable outsider who won the runoff with 58 million votes, against the PT’s replacement candidate, former São Paulo mayor Fernando Haddad, with 47 million votes—7.5 million fewer than Rousseff won in 2014. Soon after the elections, Moro became the minister of justice in Bolsonaro’s government.

The Reaction of Jair Bolsonaro

Bolsonaro’s government has been marked by a level of military influence unprecedented in Brazil’s democratic era. His vice president, Hamilton Mourão, is a retired army general, and more than 6,000 officers hold positions at all levels of his administration, including as ministers. A shadow of dictatorship looms over the former captain; he openly threatened a coup d’état on several occasions and has constantly bullied the Supreme Court, one of the few institutions to have resisted him, at least in part.

Bolsonaro’s administration has deepened the neoliberal economic model first introduced to Brazil in the early 1990s, indiscriminately cutting all public spending, including for education and health services. Its management of the COVID-19 pandemic has been catastrophic: the administration has obstructed any kind of lockdowns or the use of masks, delayed the start of vaccination campaigns, and propagandized the use of hydroxychloroquine and other alternative therapies that lack scientific basis. As a result, Brazil’s number of COVID-19 deaths—670,000 at the end of June 2022—is second only to that of the United States.

The pandemic has aggravated an already dramatic economic situation, especially in the favelas of large cities, where almost half of the inhabitants have lost their jobs. The unemployed, casual workers, and those who have stopped looking for work now represent 27 million people, or almost one-third of the 90 million active economic participants in Brazil. In addition, there are some 36 million informal workers who are poorly paid and lack any social protection. At the start of the Bolsonaro administration in January 2019, there were 12.5 million families living under the poverty line. In thirty months, the number rose to 14.7 million families—6 million more miserable people.

Lula’s Return

In April 2021, the Supreme Court annulled all the charges against Lula, citing the many irregularities committed by Moro and the Lava Jato prosecutors. One year later, the Human Rights Committee of the United Nations also recognized officially that “Judge Moro was subjectively partial” against Lula and that the conviction of the former president “violated due process guarantees.”

Having recovered his political rights, Lula has become, once again, the leading presidential candidate ahead of the October 2022 election. Against the backdrop of a dramatic social and economic crisis, Lula appears poised to comfortably win a runoff against Bolsonaro or any of the other candidates who have launched campaigns so far. Moro, who left Bolsonaro’s government in April 2020, announced his presidential candidacy in November 2021. He performed so poorly in the polls that he ended his campaign four months later.

This situation has placed Brazil’s traditional power brokers—business and financial elites, as well as most of the legacy media—in a dilemma. Do they insist on finding a centrist candidate who can rid the country of the intolerable Bolsonaro without bringing back Lula, or do they switch to supporting Lula while attempting to heavily influence his government agenda and limit the role of the PT in a new administration? With all its limitations and problems, the PT still represents the most prominent force on the Brazilian left, and it is the party most closely linked to social movements and trade unions. And, so far, all the names floated as possible alternatives to Lula have fared poorly in the polls.

Meanwhile, Bolsonaro retains a hard-core base of support at around 30 percent. This is an impressive figure, considering the disastrous results of his government, and it parallels Donald Trump’s enduring popularity in the United States. The support is strongly ideological, from a segment of the electorate that is proud of being conservative, if not openly neo-fascist, and has sealed itself in a bubble of fake news spread through closed WhatsApp and Telegram groups and open social networks (altogether, Bolsonaro has over 20 million followers on Facebook, Twitter, and YouTube), in evangelical churches, and on friendly TV networks. According to polls, support for Bolsonaro remains highest among white men in southern Brazil, businessmen, and evangelicals. His lowest score is among women, northeastern Brazilians, and the poor.

Lula, by contrast, seeks to avoid ideological polarization and invokes the good times under his government, when the economy was growing, Brazil was respected around the world, and even the poor could afford to eat steaks on Sundays (one of Lula’s favorite metaphors). Brazil’s problems could be solved, as Lula is fond of repeating, if the country just “put the poor in the government budget and the rich in the tax return.” As in 2002, when he made every effort to shed an image of radicalism that had hurt him in previous elections, the former trade unionist has worked hard to build a wide range of alliances from the left to the center-right and to reconnect with the political and economic sectors that contributed to his imprisonment and the coup against Rousseff.

Lula has chosen as his running mate Geraldo Alckmin, a former governor of São Paulo and one of the last leading cadres from Cardoso’s Social Democrats, who was defeated in presidential elections in 2006 (by Lula) and in 2018 (by Bolsonaro). Other centrist leaders and parties have also quickly jumped onto Lula’s bandwagon. The choice of Alckmin was a clear sign of détente with the country’s elites, much to the surprise and discomfort of PT militants and grassroots organizers. But a key question remains unanswered: if the policy of permanent conciliation that guided the Lula and Rousseff administrations ended in a jail sentence and a coup, why would the outcome be any different this time?

Following the 2016 and 2018 debacles, there was no honest internal discussion in the PT. In an interview in October 2021, PT president Gleisi Hoffmann ruled out the idea of rehashing past failures. “A political party does not do self-criticism. It makes a political evaluation and corrects itself,” she said. “There is no need to externalize. It does what needs to be done.”

If elected, Lula will begin his new administration on January 1, 2023, at the age of seventy-seven; it is hard to imagine him running again in 2026. And there are no natural heirs in the PT. The remaining founding cadres are all out of the game, and, among the younger generation, the left’s best hopes lie with the stars of other parties, such as Guilherme Boulos of the PSOL (a party born from a split in the PT in 2003) and Manuela d’Ávila of the PCdoB (one of Brazil’s two communist parties). Haddad, the defeated 2018 PT candidate, is relatively young at fifty-eight, but his political fate will depend on the outcome of his candidacy for governor of São Paulo, the country’s most prosperous and politically influential state. If elected, he could be a strong candidate to succeed Lula. His conservativism on economic matters could help to build bridges with Brazil’s elites.

Lula has also shrewdly returned to the international scene. In the past few months, he was received with honors normally accorded to a head of state not only in Mexico and Argentina but also in Germany, Spain, and France. In November 2021, he met French President Emmanuel Macron at the Élysée Palace, and Jean-Luc Mélenchon, leader of La France Insoumise, now the country’s main opposition party. Lula thrilled students at France’s Sciences Po in Paris and members of the European Parliament in Brussels with his promises to rebuild Brazil, fight hunger, and stop the destruction of the Amazon. But he steered clear of deeper analysis on how to heal the wounds caused by Bolsonaro, or how to reduce Brazil’s huge social deficit. “I can help the country’s poor. I can help them work, eat, and go to college,” he said in an interview. On another occasion, Lula proclaimed three priorities that should be part of any country’s progressive agenda: reducing inequality, addressing the “climate issue,” and creating jobs. The program of the coalition backing Lula, officially unveiled on June 21, picks up on these themes without going into too much detail or announcing measures that would overly alarm the financial markets.

Polls confirm that the Bolsonaro government’s disastrous handling of the economy is the main reason for Lula’s growing support. In the meantime, inflation had exploded in Brazil even before the war in Ukraine, and the conflict has further aggravated the situation. The price of basic foodstuffs rose 26.8 percent in the twelve months leading up to May 2022. Gasoline reached a record price of $7.60 per gallon—50 percent more than in the United States. Brazil is the world’s eighth-largest oil producer (2.8 million barrels per day), but since the Temer government, prices for domestic consumption have been linked to international prices in dollars, in order to increase the profits of Petrobras for the benefit of private shareholders. While Bolsonaro promised to fully privatize Petrobras in his eventual second term—a move long demanded by large investment groups—Lula’s government program includes adopting a “new fuel and gas pricing policy that considers national costs.”

The Perils Ahead

In a normal situation, there would be little doubt about the outcome of the October election. But Bolsonaro has repeatedly hinted that he is intent on repeating Trump’s example and not recognizing the verdict of the ballot box. It is not a threat to be taken lightly. Reuters recently revealed CIA Director William Burns’s confidential mission to Brasília in July 2021 to deliver a stern message to Brazilian authorities: President Bolsonaro must stop casting doubt on Brazil’s voting system. 

In November 2020, Bolsonaro was one of the last global leaders to acknowledge Joe Biden’s victory. The two presidents met face-to-face for the first time earlier this month, during the Summit of the Americas in Los Angeles. It was a hastily arranged meeting imposed by Bolsonaro as a condition for participating in the Summit, which had already been deserted by Mexican President Andrés Manuel López Obrador after the Biden administration decided to exclude the leaders of Cuba, Nicaragua, and Venezuela because of the “lack of democratic space and the human rights situations.”

According to media reports, Bolsonaro asked Biden for help in his reelection bid and portrayed Lula as a danger to U.S. interests. Biden moved to change the subject of the conversation. In a public statement made in front of the cameras, he lauded Brazil’s “vibrant, inclusive democracy and strong electoral institutions.” Biden also praised Bolsonaro’s handling of the Amazon rainforest, commending Brazil for making some “real sacrifices” to protect it.

Biden’s words were far from reality. According to satellite data analyzed by environmentalist groups, since Bolsonaro took office, average annual deforestation in the Brazilian Amazon has risen more than 75 percent from the previous decade. The timing of Biden’s declaration was unfortunate at best: on the eve of the Summit, the British journalist Dom Phillips and the Brazilian indigenous affairs expert Bruno Pereira had disappeared during a trip in the Javari Valley, a remote region of the Amazon plagued by illegal fishing, logging, and mining. Brazilian authorities dragged their feet before starting a research mission. Bolsonaro’s response was callous and dismissive. Days later, the two men’s bodies were discovered, and the suspected killers were arrested. The case has drawn global attention to the perils faced by journalists and environmental activists in Brazil. Between 2009 and 2019, more than 300 people were killed amid land and resource conflicts in the Amazon, according to Human Rights Watch.

In this context, many fear that armed militias, or even military units, may try to prevent the transition if Lula is elected. A showdown could happen on September 7, Brazil’s Independence Day, when Bolsonaro could gather his more extremist base in Brasília during a traditional military parade. What would the Brazilian military high command do if Bolsonaro really attempted a self-coup? And what would be the attitude of the U.S. government?

What is certain today is that Lula’s charisma and his prudent reformism, rather than radicalism, will be fundamental in deciding, once again, the electoral outcome. If he wins, governing and rebuilding Brazil will be a much more complex challenge.

Giancarlo Summa is a Brazilian-Italian journalist now living in Paris. In 2002 and 2006, he worked on the communications team for Lula’s electoral campaigns. He is the author of, among other works, Le rôle politique de la presse au Brésil de l’élection à la réélection de Lula (La Documentation Française, Paris, 2009). He is a Visiting Fellow in the Department of Media and Communication of the London School of Economics and Political Science and collaborates with the Institut des Hautes Études de l’Amérique latine of the Université Paris III—Sorbonne Nouvelle.