In 1980, Ronald Reagan famously asked Americans if they were better off after four years of Jimmy Carter in the White House. Most decided they were not and voted Carter out.
Today in Brazil the ruling Workers Party is desperately trying to convince voters that they are now far better off than they were when it first won power in 2002. Do that and party strategists are convinced that president Dilma Rousseff will be re-elected to a second four-year term next month, despite her unsympathetic public persona, dodgy allies and a litany of corruption scandals involving subordinates.
The party’s lavishly produced election campaign works hard at getting the message across. It portrays a country transformed. There are smiling families in front of their new homes delivered by South America’s biggest-ever housing programme, workers building massive dams and oil platforms while their children study in new technical centres that are readying the labour force for the challenges of the 21st century.
Real advances
The advances made under the country’s first ever left-wing government are real. Between 1980 and 2000 Brazil slipped from eighth to 13th among the world’s largest economies. Now it is the seventh biggest and poised to break into the top five in the next decade. That is largely due to a massive expansion in the labour force under the Workers Party.
On its watch 22 million jobs have been created, 11 million of them since the 2008 global crash, since when richer countries have been laying off workers in the tens of millions. Under the Workers Party, unemployment has fallen from 15 to 5 per cent.
More impressive still is the quality of this growth. Aggressive increases to the minimum wage have seen the income of the poorest 10 per cent of the population increase by 106 per cent between 2003 and 2012, four times GDP growth.
By increasing the purchasing power of poorer Brazilians, the government has created a new consumer class that has further driven investment and growth.
Allied to a huge expansion in social programmes, 36 million people have been lifted out of extreme poverty. “We inverted the rule among Brazilian economists that we had to grow before we could redistribute. During the last 12 years we have redistributed income in order to grow,” says economist Marcio Pochmann, one of the Workers Party’s leading intellectuals.
Major challenge
But Socialist candidate
Marina Silva
and Aécio Neves of the centre-right Social Democrats, Rousseff’s two main challengers, are also asking the Brazilian electorate Reagan’s question, just trying to keep it to his original four-year timeframe. And that presents Rousseff with a major challenge to her re-election bid.
Though employment is holding steady for now, Brazil is in recession. The president inherited an economy that was growing at 7.5 per cent a year from her predecessor and mentor Luiz Inacio Lula da Silva. It will struggle to grow as much again over the entire four years of her term. That threatens to undermine the gains made since 2003.
According to the UN’s Development Programme, 63 per cent of the reduction in poverty overseen by the Workers Party was due to economic growth rather than social programmes. As growth has shrivelled, the last decade’s sustained fall in inequality stalled in 2011 and 2012. Inflation, the traditional scourge of Brazil’s poor, is only being contained by a series of subsidies the government can no longer afford without undermining confidence in its fiscal position. Already ratings agencies are threatening the country with downgrades.
This gloomy scenario has placed Rousseff on the defensive. Despite the triumphalism of the Workers Party campaign, Silva forced the president into admitting in a televised debate that while “it might seem I am satisfied with things, I am not”.
She has already thrown her much-criticised finance minister under her campaign bus, promising Guido Mantega will not remain in his post should she be re- elected.
But critics in industry say the problem is the president herself. Business confidence has been undermined by her interference in key areas of the economy, which has only managed to provoke multibillion-euro losses in the energy and electricity sectors. Meanwhile, her notorious micromanaging tendencies have delayed desperately needed decisions on investments in the country’s still rickety infrastructure.
Demystification
“The four years of President Rousseff’s administration demystified this idea that she is an excellent manager. People now realise this was a myth created by Lula to elect her in 2010, but her period in power shows that she is not a competent administrator,” says Adriano Pires of the industry lobby the Brazilian Infrastructure Centre.
In his almost apologetic campaign spots, Lula himself is now promising a second Rousseff term will be better than the first, much like his own was. Whether she gets the chance to prove him right will in large part depend on how far back Brazilian voters are now looking – 12 years or four.
