Brazil: the first 100 days of the Lula-Alckmin government

10 April marked the 100th day of the new Luiz Inácio Lula da Silva (Lula) government in Brazil. Lula's victory at the ballot box in 2022 was a victory of the struggle of young people and workers, who mobilised to defeat the hated Bolsonaro government and its reactionary policies. But, as we explained during the campaign, this was not the end of the struggle. Bolsonaro and his supporters have gone nowhere – even if they have been weakened – and the government of Lula and Vice President Geraldo Alckmin is pursuing a policy of unity with the bourgeoisie, submitting itself to the fundamental interests of the ruling class and imperialism.

The government has allied itself with the capitalists and includes ministers from the right and even the extreme right. It is incapable of meeting the central demands of the masses, who continue to be exploited and oppressed by capital. Inflammatory speeches and the "representation" of oppressed groups at the inauguration and in government ministries are simply a sympathetic veneer on the defence of the capitalist system and the general interests of the bourgeoisie.

The government's economic policy

The current government's compromises are evident in its economic policy which, in reality, differs little from that of Bolsonaro and Michel Temer before him. Recently, Minister of Finance Fernando Haddad and Minister of Planning Simone Tebet presented the "new fiscal framework", which is nothing more than a new limit on public spending to replace the old limit approved by the Temer government and maintained by Bolsonaro.

It is a new brake on government spending, which aims to provide a guarantee to the market that the government will meet the targets for the repayment of the public debt to its creditors, mainly international banks and speculators; that is, finance capital. While Lula attacks the banks and the markets in his speeches, in practice he submits to their fundamental interests. For this reason, the market reacted positively to the announcement of the "framework", with a rise in stock markets and a fall in the dollar.

The framework places a limit on the growth of government spending of up to 70 percent of the growth in tax income from the previous year. For example, if tax collection increases by 2 percent, the increase in spending can be up to 1.4 percent (i.e. 70 percent of 2 percent), in addition to inflation. But this increase in expenses will also have a lower and upper limit, between 0.6 percent and 2.5 percent.

As UOL Economics reported: 

"If the new fiscal framework had already been in place since 2011, the federal government would have saved R$775.3 billion over the period – or R$64.6 billion per year. These calculations were made by economists Felipe Salto and Josué Pellegrini, from Warren Rena. The simulations indicate that, in practice, the average annual expenses would have been lower than those observed, at 2022 prices".

The central concern of the bourgeoisie is the repayment of the national debt, which has always been used by imperialist powers and a method of domination. It is worth remembering that, under the previous governments of Lula and Dilma, debts were religiously paid, with interest. In 2016, Dilma vetoed a Debt Audit which had even been approved by the National Congress itself the previous year. The repayment of the public debt with interest, consumed 46.30 percent of the federal budget in 2022, or R$1.879 trillion. For comparison, spending on healthcare was 3.37 percent of the budget last year, and only 2.70 percent was spent on education.

The current government's compromises are evident in its economic policy / Image: Portal Abras/Agência Brasil, Wikimedia Commons

Besides this, Brazil has more than US$300 billion of international reserves invested in US debt bonds, but these bonds yield interest below the rate of inflation. In other words, the Brazilian government finances US imperialism by "losing" money.

The recent conflicts between the Lula government and the Central Bank over the interest rate, far from being in the interests of the workers, are part of a plan to boost the capitalist economy. 

The Central Bank and its president, Campos Neto, defend the high interest rate at 13.75 percent, supposedly to combat inflation. The government, in turn, claims that it is necessary to reduce the interest rate in order to increase production and consumption, and, in theory, make the economy grow. 

But this is not aimed at benefiting the working class. In a speech to businessmen in February, Lula said that the business sector "needs to learn to make demands, needs to learn to complain about high interest rates". Addressing Josué Gomes, president of the Federation of Industries of the State of São Paulo (Fiesp), he added: "It is necessary, Josué, that you know, that if the business class does not make itself known, if people think that you are happy with 13.5 percent, then, honestly, they are not going to lower interest rates". By engaging in this Pyrrhic battle – which he had lost before it even began – Lula seeks to divert the attention of the workers and avoid the coming struggles for higher wages.

On the part of the revolutionaries, it is not a question of demanding a reduction or increase in interest rates, that is simply business administration for the bourgeoisie. Our struggle is for jobs and decent wages for all the workers, with a monthly readjustment of wages in line with inflation. Our struggle is for the non-payment of the fraudulent public debt, and the use of this money for health, education, housing, etc.

Why are the attacks not repealed?

The government's refusal to repeal the New High School policy (NEM) – a counter-reform in the education sector brought in under previous governments – is a clear demonstration of its commitments to capitalism. That being said, the suspension of the NEM implementation schedule, announced by the Minister of Education, Camilo Santana, shows that the government is feeling the pressure of the mobilisations of the masses. But the suspension for 90 days, while a public consultation takes place, does not mean a real retreat.  

The fact is that both Lula and Camilo Santana have spoken out several times against repealing the NEM, defending only "adjustments" in the new model. This is not surprising. Although the NEM was approved by Temer and began to be implemented by Bolsonaro, the embryo of the project was formulated during the Workers’ Party (PT)-led government of Dilma Rousseff. Incidentally, so was the Labour Reform and Social Security Reform approved by the Temer and Bolsonaro governments.

The disappointments with the previous governments of Lula and Dilma broke the ties that the PT had with the proletarian masses / Image: Antonio Cruz, Wikimedia Commons

In 2014, Dilma, then a candidate for re-election, defended reforming high schools during her campaign, stating in an interview: “High school students cannot have 12 subjects, including Philosophy and Sociology. I have nothing against Philosophy and Sociology, but a curriculum with 12 subjects does not attract young people. So, first we have to reform the curriculum.”

The New High School policy, beyond reducing the general content of traditional subjects for the students, is part of a dismantling of public education that aims to reduce government spending. This is intended to prepare the ground for the dismissal of civil servants and the expansion of privatisation, with the entry of large education conglomerates in "partnership" with the State.    

The government's commitment to capital prevents it from taking a stand for the repeal of the NEM; just as it will not repeal other attacks, such as the Labour Reform or the Social Security Reform. Our struggle is for the total and immediate repeal of all these counter-reforms. 

We must help the most advanced layers of the working class and youth see the new government for what it is and draw the appropriate conclusions – to get organised and continue the struggle, without being distracted by the rhetoric of the far-right, Bolsonarist opposition to the government.

The struggles to come

Today, Lula PT have neither the authority nor the control over the working class that they had in the past. The disappointments with the previous governments of Lula and Dilma broke the ties that the PT had with the proletarian masses. Lula's candidacy in 2022 was more readily seen as a chance to defeat Bolsonaro, without any deep illusions in what his government would be able to achieve, although of course there was hope that better days would come.

The ongoing international economic crisis in the country, with a government committed to maintaining the current system, can only cause the living conditions of the masses to worsen. This will impact the popularity of the government. Such a situation can benefit the right-wing and far-right opposition which, despite its defeat at the polls and its current fracturing, has learned that it can rely on a certain base in Brazilian society. 

However, the hypocritical right and far-right cannot present any real way out for the masses. Bolsonaro’s four years in government have proved this. The struggle to meet concrete needs is the fuel for the class struggle which, in turn, is the engine of history.

We have seen the willingness of the masses, particularly the youth, to fight to repeal the NEM, despite the manoeuvres of the leaderships of the trade unions and the student bodies. Those who are awakening to this struggle against the NEM are looking to the left for opposition to the government, and not to the right.

The hypocritical right and far-right cannot present any real way out for the masses / Image: Palácio do Planalto, Flickr

The concrete actions of the Lula-Alckmin government have made more and more sectors of the working class realise, little by little, the need for mobilisation and independent organisation to revoke previous counter-reforms, prevent new ones, and to make fresh gains.

A new wave of militant workers and youth is forming, having learnt from practical experience. These activists participated in the struggle to defeat Bolsonaro and are now beginning to take part in the struggle to win their demands from a national unity government. They are also seeing the examples coming from other countries, such as the mobilisations against pension reform and the Macron government in France.

Revolutionaries must connect with these layers, fighting shoulder to shoulder, explaining the need for the revolutionary programme and revolutionary organisation. In 2022, the fastest growing search on Google Brazil, under the category "what is...", was "what is communism?" There is clearly growing interest in communist ideas. 

There is a layer that feels victorious for having defeated Bolsonaro, that will not be satisfied with cosmetic changes to society. This layer will seek real change and will not be silent in the face of attacks. An explosion of class struggle is being prepared for the coming period as the capitalist crisis deepens. This is the favourable terrain for the growth of the Esquerda Marxista, the Brazilian section of the International Marxist Tendency. Forward!