Over the past decade Brazil has become a major player on the world stage. Under President Lula, the country has become an economic powerhouse, whilst its fast-growing military and uranium enrichment programme (currently further ahead than that of Iran), highlight the government’s desire to ensure that Brazil remains a global power. But, as Nathan Shachar reports in this month’s Prospect, Latin America’s largest economy is still crippled by major problems on its own doorstep. That is why this Sunday’s presidential election is so crucial. President Lula—who is stepping down after two terms—is hugely popular and has undoubtedly changed the country for the better, yet he has failed to get Brazil’s widespread corruption, poor infrastructure and lawless slums under control. For his successor, these must be urgent priorities.
The overwhelming favourite to win on Sunday is Lula’s anointed candidate, Dilma Rousseff. When I spoke to her (in her office that sits alongside Lula’s) earlier this year, she confidently asserted that under her rule growth would continue unabated: “it’s more difficult to make this economy not grow than to make it grow,” she claimed.
Is this really so? Inflation, despite its sharp drop under the Lula administration, remains a real problem for Brazil. Rousseff seems untroubled by this. Lula’s government runs a hefty trade surplus, she says, and has managed to repay the International Monetary Fund for an earlier large loan. She claims that Brazil is on a trajectory of high growth in its exports, one superior to China.“No country in the world has such a high rate of growth despite interest rates being so high. So we have space for accelerating growth without inflation,” she says. She also plans to lower tax, a policy which, she hopes, will also contribute to a lower inflation rate.
Before her promotion to chief of staff in 2005, as minister of mines and energy Rousseff oversaw the rapid expansion of Brazil’s offshore oil industry. Now, however, she is keen for the petroleum and gas industry to “act as an enterprise with a conscience”—which means keeping their prices at a level that doesn’t penalise the poor.
In his article, “Lula’s legacy”, Shachar reports that Rouseff is unpopular within her own party, but…