The IMF and the Brazilian election
International Socialist Review, September/ October
[A reprint of the analysis of Brazils elections
by Euclides de Agrela of the Partido Socialista dos Trabalhadores
Unificado (PSTU, United Socialist Workers Party) one of the largest
revolutionary organizations in that country. Translated by Tom
The new agreement between the Brazilian government and the
International Monetary Fund (IMF) provides for a $30 billion loan.
It also gives authorization to Brazil's Central Bank to use another
$10 billion of its reserve fund-which would then drop to a floor
of $5 billion-to intervene in the ongoing currency crisis, which
has seen the ratio of the real to the dollar leap to more than
three to one in recent weeks. Of the IMF's $30 billion, only $6
billion can be used by the present government of President Fernando
Henrique Cardoso. The other $24 billion is earmarked exclusively
for a future government.
The IMF released the money only because major U.S. banks pressured
it to do so. The banks' profits would be jeopardized by any moratorium
on the payment of Brazil's external debt. The new agreement amounts
to a rope around Brazil's neck. Its purpose is to guarantee that
the Brazilian government continues to pay the capitalists who
speculate on the public debt, which already exceeds 60 percent
of Brazil's gross domestic product. The external debt has climbed
to $R 250 billion [$78 billion], while the internal debt has reached
$R 750 billion [$236 billion].
In this way, Brazil is increasingly becoming part of the overall
reality of Latin America and, in particular, of such countries
as Argentina, Paraguay, and Uruguay-Brazil's old partners in Mercosur.
These countries have seen a recession seize their economies without
any end in sight. Their peoples have been plunged into the most
thoroughgoing misery as their reward for following IMF-imposed
plans and goals to the letter.
No matter who is elected in October, the next president will
inherit the new agreement as a fait accompli-a done deal struck
in the waning hours of the Cardoso government. The agreement requires
Brazil to maintain a primary surplus (the difference between income
and expenditures in the federal budget after deducting interest
and payments on the external debt) of 3.75 percent. According
to some economists, this figure could rise to 5.4 percent at the
beginning of next year, thus requiring even higher spending cuts.
Moreover, the IMF is demanding enactment of the last round of
reductions in social services, further public sector layoffs,
the end of workers' rights, and more privatizations.
There is another issue surrounding the IMF agreement of which
the public is aware and which, according to the mainstream press,
is one of the demands being made by U.S. Secretary of the Treasury
Paul O'Neill. This involves the purchase of 12 supersonic fighters
from the Swiss-British-American consortium Gripen in the amount
of $700 billion.
The presidential election, in this sense, is turning into
a great fraud. U.S. imperialism and the large foreign banks-by
imposing the continuation of the neoliberal model on the next
government, even before that government emerges from the ballot
box-are transforming the electoral process into a mere formality.
To the degree that Brazil no longer has the sovereignty to decide
its own economic and budgetary policy, it is being converted into
a mere colony of the United States-one more "economic territory"
in the great empire of the Free Trade Area of the Americas (FTAA).
George Soros's statements in this regard-"there's nothing
democratic about global capitalism" and "the people
who elect the president of Brazil are U.S. investors"-are
being confirmed in the most naked and crude fashion.
Faced with this picture, there exists only one way out that
is capable of responding to the interests and needs of Brazilian
working people: End payments to the big banks on the external
and internal debt, and break off from the IMF and FTAA. Only on
the basis of these radical measures will it be possible to establish
a sovereign economic policy capable of blocking Brazil's complete
transformation into a colony of the United States. This task is
not one that the Brazilian ruling class is able or willing to
accomplish, because it has sold out to imperialism. Brazil's working
class and its poor must carry out the fight against imperialism.
The leading candidates bow their heads
Recently, President Cardoso complied with another IMF demand.
The IMF wanted a prior guarantee that any new government would
continue to apply its plans and follow its goals. Thus Cardoso
called a meeting of the four candidates who were leading in the
opinion polls: Luis Inacio da Silva ("Lula") of the
Partido dos Trabalhadores (PT, Workers Party); Ciro Gomes from
the Partido Popular Socialista (PPS, Socialist People's Party),
Jose Serra from the Partido da Social Democracia Brasileira (PSDB,
Brazilian Social Democratic Party), the party of the current president,
and Antony Garotinho of the Partido Socialista Brasileiro (PSB,
Brazilian Socialist Party), a group led by the least important
sectors of Brazil's bourgeoisie.
At this meeting with Cardoso, all the candidates-including
Lula-promised to uphold Brazil's contracts with the IMF and to
pay back the external and internal debts. In other words, they
accepted the new IMF agreement as inevitable. Serra, Gomes, and
Garotinho are bourgeois alternatives and enjoy the support of
different factions within the ruling class. They represent, therefore,
variations on a single theme and do not go beyond their more or
less declared role as puppets of imperialism, the big banks, and
the transnational corporations. But the fact that Lula would accept
the inevitability of such an agreement and give his word to abide
by it is deplorable. It is the first time in history that the
PT has supported an IMF agreement.
Lula's support for the IMF accord represents the crowning
moment in a strategy developed years ago by the PT leadership,
one which it is has been pursuing tenaciously since at least the
beginning of the 1990s. This strategy seeks to "soften the
social effects of neoliberalism" through so-called "compensatory
social policies" (for example, a minimum wage and scholarship
programs). But it accepts the political and economic foundations
of neoliberalism: debt repayment, privatization of state enterprises
and social services, the flexibilization of social services and
worker relations, etc.
This also explains why the PT officially withdrew from the
campaign for a national plebiscite on the FTAA, which the social
movements have been organizing since the beginning of this year,
and which will take place during the week of September 1-7. Contrary
to its origin and early trajectory- one recognized even abroad
as the late brilliance of a star that has now burned out-the PT
openly repudiated independent working-class politics. It reneged
on the fight against capitalism and imperialist domination.
The 2002 elections will bring the PT's new face to the surface
for all the world to see. It has completely adapted to bourgeois
institutions, authored an economic program that preserves the
fundamentals of neoliberalism, and allied itself to important
sectors of the ruling class. If anyone has doubts about this,
one easily verified fact can dispel them: The vice-presidential
candidate on Lula's ticket is Jose Alencar, who is CEO of the
textile conglomerate Coteminas. Alencar is a member of the Partido
Liberal and is acclaimed by the PT's leadership as "the boss
that Brazil needs."
For anyone who still has a doubt, we can let Lula speak for
himself. In a speech delivered in Sao Paulo designed to calm the
financial markets, Lula declared: "No one represents stability
as much as I do. No one has the support that I do from the labor
movement, from the social and popular movements." Thus, Lula
preaches that his candidacy would represent the possibility of
a great pact between capital and labor and, therefore, a guaranteed
anesthetic against the possibility that the working masses would
As a party that defended the historic interests of the working
class and the need for independent class politics, the PT is dead.
In its place there has emerged a new PT, which proposes to govern
with and for the big capitalists. Taking advantage of the prestige
it won during the decade of the 1980s, when it mobilized and organized
workers and unions politically, the PT and Lula now offer their
talents as "good negotiators" to the national bourgeoisie
The PSTU in the elections
The PT's current posture is even more criminal in light of
the fact that workers have begun to turn their eyes toward the
opposition and the left. There is a reason why Lula leads in the
polls with 37 percent support, whereas Gomes receives 27 per cent
and Serra (Cardoso's candidate) gets only 13 percent. Only weeks
remain before the first-round of the elections.
Another expression of the leftward shift in mass consciousness
is the growth of the anti-FTAA campaign, which is setting in motion
a broad layer of the most militant activists in the social movements.
All indications point to more than six million votes being cast
in the September 1-7 plebiscite. Yet, precisely as the best militants
among the working class and a significant portion of the masses
are turning to the left because they are fed up with the economic
and social consequences of a decade of neoliberalism, the PT and
Lula are undertaking a hard right turn.
For this reason, the PSTU decided to launch the presidential
candidacy of one of its own leading members, Jose Maria de Almeida
(Ze Maria). But Ze Maria's candidacy was launched only after a
fierce campaign to create a Workers Front ticket, headed up by
Lula and a vice-presidential candidate from the Landless Rural
Workers Movement (MST), with a platform of breaking with the IMF
and the neoliberal model. The PT not only refused to embrace this
proposal, but it chose instead a major Brazilian capitalist as
its vice-presidential candidate. Moreover, it adopted a program
that defends the preservation of the "gains" of neoliberalism
as a "patrimony" of all the people and not just as "an
achievement of the current government."
It was the convergence of these factors that led the MST,
in its most recent national meeting, to vote in favor of an independent
position in the elections-that is, it will not officially support
Lula. There is also growing indignation among activists involved
with the left wing of the Catholic church and liberation theology.
They accuse Lula and the PT of betraying the project of "structural
reforms," that is, of abandoning even the strategy of building
a state devoted to the well-being of everyone within the limits
The current political process is opening up a great opportunity
in Brazil for revolutionaries to connect with the masses. Significant
steps toward rupture are occurring within leading sectors of the
PT, a rupture which finds expression through the unions, the student
movement, and the popular movements. Today, the necessity and
the possibility of building a new party of the working class is
The PSTU is looking to provide momentum within this movement
by defending a strategy of socialist revolution and an anti-capitalist,
anti-imperialist program. The unity of Brazilian revolutionary
socialists, who number far more than those who founded the PSTU
itself, would represent a gigantic step forward. It would offer
the working class of Brazil a new leadership capable of challenging
the PT and its influence over the masses. The possibility of building
a new revolutionary party can be posed in the next period of struggle-especially
if Lula is elected president.