“Two Years of Lula's Government:
Progress and Challenges”
Luiz Dulci speaks
in the Morrison Room on March 14.
Years of Lula's Government: Progress and Challenges
By Meg Stalcup
first two years of the presidency of Luiz Inácio
Lula da Silva and his Partido dos Trabalhadores (PT, the Workers’ Party)
have been indelibly intertwined with the decades of struggle
to achieve power. The experience provided invaluable lessons
and continue to shape the Lula administration’s innovative
and progressive approaches to democracy, economic policy and
social improvement, believes Brazil’s Chief Minister, Luiz
Dulci. A long-time colleague of President Lula and a founding
member of both the PT and the Central Única dos Trabalhadores
(CUT, the Unified Trade Union Federation of Brazil), Minister
Dulci used his CLAS invitation to give an account that was both
personal and analytical of the Lula government’s progress
to date and future challenges.
Lula’s victory was neither
accidental nor unexpected. It was the fruit of a long process
involving the development
of a “culture of governing and management,” said
Minister Dulci. Founded in 1980, the PT acquired important
experience during its decades in opposition. It won local elections
the country and gained expertise in the practicalities of regional
and municipal management. During the years before winning the
presidency, PT politicians learned to build alliances and developed
specific programs. Innovative policies for health care now
being implemented nationally were first developed at the municipal
level. The participatory budgeting system involving communities
in resource allocation also began in the municipalities
“It is impossible,” Dulci declared, “to have transformation
in society if civil society is not an active player in the process.” The
Lula administration has therefore developed a new relationship between government
and civil society. While traditionally the Presidency’s General Secretariat
acted as a liaison to business and industry, today under Minister Dulci it
coordinates dialogue with a much wider social spectrum, including numerous
actors. Two to three times per month he meets with CUT and other national labor
federations as well as the leaders of the Movimento sem Terra (MST, the landless
peasant movement), intellectuals, churches and various pastoral groups. This
networking with civil society carries into foreign affairs. When abroad, President
Lula meets not just with heads of government but also with labor leaders. Minister
Dulci, smiling, underscored that his visit to UC Berkeley was itself an enactment
of this policy.
Alternative View of Democracy
electoral act is sufficient to choose a government, Minister
Dulci pointed out, but not
to build one. The PT has never wanted to replace representative
democracy. It has, however, attempted to move beyond the systemic crisis
produced by reducing democracy to a single poll taken every four years.
In multiple ways, President Lula and the PT have worked at
creating a government
of the people.
participatory democracy, people come to understand how government
works. At the same time, it provides a pathway
for public oversight of
Based on the possibility of this new kind of relationship between the electorate
and elected officials, Lula and Dulci decided, during the presidential
campaign, to draft a contract with the Brazilian people. The
country was experiencing
a crisis and would have to undergo an uncomfortable transition phase. In
order to build the conditions necessary to return to growth, they developed
lines of action and presented these to the public. Civil society exercised
its appropriate role of questioning and challenging through a series of
cautioned that the executive does not have a monopoly of power.
The legislative and judicial
branches, along with society, are also players.
that the Lula administration has failed to implement its campaign platform
of structural reform, the Minister reminded listeners that the PT had
attained the presidency by means of “a social alliance and with a political
party coalition.” There are 14 parties in the Brazilian congress,
vice-president, José Alencar, hails from industry. The point, stressed
Dulci, is that the PT does not have a majority; it has to build one for
each and every vote.
audience in the Morrison Room.
The New Equation: Growth With Stability
and immediately after Lula’s
electoral triumph, critics contended that there was no crisis, simply
fear on the part of investors. Emphatically,
Minister Dulci described how real the crisis had been. Inflation was
projected at 40 percent. Brazilian capitalization bonds (C-bonds) were
worth 40 percent
of their value and the exchange rate was four reais per dollar. International
credit lines had been reduced to zero, and with no credit lines, the
export capacity was critically affected. It was imperative to confront
the situation. For years, Brazil had been trapped between a rock and
a hard place.
Stability was equated with low inflation, and the common wisdom was
that there could be growth without stability or stability without growth
Lula’s administration, Minister Dulci asserted, proposed a new
equation — growth
with stability. While this meant limited social investment for the
first year, the priority was to overcome the economic crisis. According
Latin America has a history of electing leaders who confound dreams
with reality and ultimately set their countries back.
President Lula was
to build the conditions for sustainable growth.
The strategy was to “make the institutional environment more
investment. Because there was no regulatory framework for investment
in place, the Lula administration developed its own version of PPP — public-private
partnerships for the creation of infrastructure. What Lula’s
team sought in doing this was to use fiscal reform to stimulate protective
speculative investment. They developed a system in which short-term
investments are subject to higher taxes, medium-term investments
have intermediate level
taxes and long-term investors actually receive a credit. In this
manner, financial speculation was rendered productive. Brazil’s
exports are currently at record levels, and this infrastructure is
vitally necessary. With evident gratification,
Dulci reported that in 2004, the Brazilian economy grew 5.2 percent
and generated two million new jobs.
to Brazil have been growing too. However, according to the
minister, this rise is not led by luxury items; rather, it evidences
essential manufacturing components. Another positive indicator
is that the economy
is growing across the country, beyond the traditionally strong
southern states. The Amazon, for example, is a new productivity
proudly of Brazil’s internationally competitive economic
sectors such as aeronautics and agriculture.
challenges which must be taken up now are social inclusion
and growth with equitable income distribution. Forty percent
of Brazil’s population lives
below the poverty line as defined by the United Nations. Social
spending is already three times what it was in 2003. Yet while
the economy must continue
to grow, further reductions in inequality continue to be policy
Professor Harley Shaiken, the Chair
of the Center for Latin American Studies, at the
Free Speech Marker in Sproul Plaza.
and Inclusion: Advances in the Social Agenda
Lula has vowed to end hunger in Brazil. It might not seem like
ideologically, and Lula has also been careful
to insist that he cannot rectify four centuries of inequality,
but in Brazil this would be “a revolution.” At
the end of Lula’s first two years, 28 million extremely
poor Brazilians are receiving a new stipend. Additionally,
two million seniors have been guaranteed a minimum income.
Higher education reform is now taking place. Thirteen new
public universities, in underserved regions, have been founded
affirmative action is being instituted by some states. Lula
has above a 60 percent approval rating, Minister Dulci observed,
and this clearly shows the support of the population.
reform, however, traditionally dear to the PT, is one area
in which there has been no progress so far. Why?
Minister Dulci highlighted two basic
reasons. First, Lula’s government inherited a legacy of 400,000 families
who were inadequately settled on land without electricity, schools or roads,
far from markets where they could sell the products of their labor. Lula’s
government made the decision to help these 400,000 first and then move on
agrarian reform. The administration did not, Dulci argued, lie or hide this
what has impeded reform is a crippling lack of qualified personnel. Although
critics accused the Lula administration of inflating bureaucracy, Minister
Dulci insisted that there were simply not enough agronomists and lawyers,
and these are specializations fundamental for land appropriation.
his speech, Minister Dulci affirmed that his government is
indeed dedicated to reform, and he addressed
the appalling murder of the naturalized
Brazilian, Sister Dorothy Stang in the state of Pará on February
12. The Ohio native, resident in Brazil since the 1970s, had been working
the agrarian reform ministry to help people file land claims. She was the
target of ruthless private interests attempting to thwart change and government
presence through intimidation and violence. In response, however, President
Lula opened new federal police stations in the region and renewed efforts
aimed at land appropriation.
students after his public talk.
the Portuguese and adult literacy teacher of his first career,
Minister Dulci characterized the long time leading
up to his party taking federal
power as an opportunity, one that permitted PT politicians “a deeper
reading of Brazilian society.” Looking back to the early 1980s,
Dulci recounted how journalists would ask Lula: “Are you a social
democrat, a socialist, a communist, a Marxist?” “No,” Lula
would reply: “I
am a lathe operator.” He spoke to all Brazil as a member of the working
that the PT is in power, albeit as part of an alliance, Dulci
insisted that the party had not “changed sides of the fence.” It
was, and is, a social democratic party. While there must be new responses
to new issues,
he added, the PT remains “inspired in the same values” that
guided its foundation and years of political action.
Dulci, Chief Minister of the General Secretariat of the Presidency
of the Republic of Brazil, gave a talk at UC Berkeley
on March 14, 2005.
Stalcup is a doctoral student in UC Berkeley and UC San Francisco’s
joint program in Medical Anthropology.
Chief Minister of the General Secretariat of the Presidency
of the Republic of Brazil, Luiz Dulci is one of the closest
advisors to Brazilian President Luiz Inácio “Lula” da
Silva. Minister Dulci is also among the founders of the PT,
the Brazilian Worker’s Party, and the CUT, Brazil’s
leading national labor confederation. Since the foundation
of the PT, he has held several important roles both within
the party and for the party’s administrative governments,
including work with Fundação Perseu Abramo, the
PT’s political research foundation, and with the
municipal government of Belo Horizonte.
by Minister Dulci on social justice, from the PT website (in
with Minister Dulci (in Portuguese)
Professor Candace Slater, the Director of the Townsend
Center for the Humanities, at a reception following
his public talk.