Lula’s second breath

"Antônio das Mortes," a film by Glauber Rocha, tells the story of a small village in northeast Brazil. A group of land-hungry peasants have taken to banditry. The local landowner and police chief decide they need Antônio das Mortes, a professional assassin. Antônio arrives and meets the peasants' leader in the village square.

Soon the peasant is dead, a knife through his heart. The peasants weep and dance. Antônio is overcome. He asks the landlord to open the granary and help the near-starving people. The landlord refuses. In a vision, Antônio sees the peasant leader crucified on a gnarled tree. A virgin appears and asks Antônio to seek revenge. He is persuaded and, with the help of the police chief's drunken assistant, takes on the landowner's private army and destroys it.

Fact or fiction? A bit of both. Antônio das Mortes did exist, and so did the Cangaceiros, the bandits, and their leader, Lampião. In the mid-1930s these rebel peasants, with their wide-brim hats studded with bright metals, were wiped out. In the late 1950s they were replaced by the more sophisticated Ligas Camponesas (peasant leagues), organised by a Marxist lawyer from Recife, Francisco Julião. The Ligas occupied land and threatened landlords who did not redistribute it. They too were violently suppressed. Today Brazilians recall the time of the Cangaceiros as Americans recall the days of cowboys and Indians.



Today, visiting Pilõezinhos—a village of just over a thousand families of mixed Indian and European descent in the northeast, 120 miles from the city of Recife—it is difficult to believe that Antônio's story is the local living history. Around the quiet, orderly village square are the houses of richer peasants built in a simple Portuguese colonial style with yellow or blue façades and roofs of red clay tiles. Rising uphill into the mists are the orange groves and the sugar plantations of the latifundiario, the absentee landowners of European descent who, from faraway Recife or even Rio, still give the orders and take most of the money. At first sight the lush, haunting beauty of Pilõezinhos makes it look like the kind of place a Gauguin might make famous. A closer look reveals a Picasso mask.

It is hard for a long-standing observer of Brazil to imagine that the future of its charismatic president, Luiz Inácio Lula da Silva, or Lula, who grew up in another impoverished village in the northeast, will be decided by villagers like those of Pilõezinhos. Until the 1990s, Brazil's elites did not much care what these people thought. That has changed. In the presidential election to be held on 1st October, the people of Pilõezinhos and thousands of other villages like it will weigh Lula's familiar populist persona and Brazil's improved financial and social circumstances, against disappointing economic growth and the disorganisation and the financial scandals that have marred Lula's administration.

Twenty-eight years ago and it is dusk here in Pilõezinhos. Coloured lights decorate the square. From my hammock in one of the small houses I can see the church silhouetted in the gloom. It is the night of São João, St John the Baptist, one of the biggest feasts in the Brazilian calendar. The men have been out in the heavy rain bringing in wood to build small bonfires in front of their houses. The wood has been drenched by weeks of winter downpours, but the penalty for not lighting a fire is said to be death before the next São João.

The music and dancing that I am expecting do not materialise. Most of the young men are away in Recife, working on construction sites. Those who remain—women, children and older men—struggle to eke out an existence in the shadow of a feudal land-ownership system that has hardly changed in four centuries. It is not a time for dancing.

Back then, a child in Pilõezinhos died from undernourishment or illness every day. The undertaker lived in Guarabira, a market town three miles away along a potholed road. There were stacks of plywood children's coffins in his shopfront, painted blue with white crosses on top. A father often only heard of the death of his child when he returned home from his job elsewhere, three or four times a year.

Dom Marcelo, the local Catholic bishop, also lived in Guarabira. He slept on an old door supported on bricks. Forty-nine years old, dressed in slacks and an open shirt, he accused the economic system of driving the people to destitution. "Things have always been bad here," he said. "Now they are getting worse. Since the commercial farmers came in the last few years, buying out the feudal owners and putting land down to sugar cane or cattle ranching, tens of thousands of families have been evicted. You have only to go to the market to see them." In 1969 Marcelo had been jailed for two months, falsely accused of being part of Carlos Marighella's guerrilla movement, which was attempting to overthrow the military dictatorship.

Pilõezinhos was depressed then, but to see the real abomination of 1970s Brazil, a visitor to the northeast had to go to Recife. A quarter of the city's 2m people were living in its favelas (shanty towns), where half of the houses lacked sanitation. It seemed then—and many millions of Brazilians still live in slums like this—that in Recife, if disease didn't get you, the criminals would.

Two years earlier, in 1976, I had flown into Recife to meet its notorious archbishop, Helder Camara, whom Time called the "red bishop." The regime had banned Camara from the Brazilian media, but his pastoral work continued, and he put me up in a 17th-century convent by the sea. At breakfast the morning after I arrived, a striking young woman walked in, dressed in jeans and a t-shirt. "Meet my favourite nun," the red archbishop said, and since that day Valéria Rezende and I have been friends.

As a student, Valéria had also been accused of working for Carlos Marighella. Her boyfriend, Betto, ran guns. They were both captured. With her air of feminine innocence, she talked her way out of it, but Betto went to jail for four years. Years later, their romance long broken up, they met at a party and were dancing samba together. "What are your plans?" asked Betto. "I have decided to become a nun," Valéria replied. "That's interesting," said Betto. "I have decided to become a monk." The church, both of them felt, offered the last remaining opportunity to change their country; it was the only institution with a modicum of independence and idealism. Today Valéria works with the youth of rural outposts like Pilõezinhos, although, like Betto, she has become a well-known novelist as well.

On that night of São João in Pilõezinhos, Valéria and I talked about the absence of music. "Next year," she said, "we'll help the peasants get it going again. They are so beaten down that they don't have any value left in their traditions." As we talked, the villagers began moving along the dark road carrying a statue of the saint, each with a candle. Behind them in the darkness the plantations stretched for miles.

In 1980, a few years after our first encounter, Valéria, using Betto's connections, took me to meet Lula. He was then the radical leader of the São Paulo car workers' union, a 34-year-old lathe operator who had just been in prison for calling a strike. Police had attacked the strikers, and one of Lula's comrades, a member of a Catholic workers' movement, had been killed. At the funeral, half a dozen bishops and 200 priests walked through the centre of São Paulo. Paulo Evaristo Arns, cardinal of the world's largest diocese, walked with them and said the funeral mass. The military president, João Baptista Figueiredo, accused Arns of inciting the workers. On the way to see Lula I visited the cardinal, who had just been told by the government that the church's small "base communities"—organisations found in every favela and thousands of villages—were the same as communist cells.

Communist fellow travellers or not, without the support of Arns, Camara and much of the rest of the church so many years ago, Lula would not have become what he is today: the dominant figure in Brazilian politics. Lula himself, however, has never been religious. "I'm not inspired by great themes, great philosophers," he told me then. "I'm led by my own experience: 20 years on the shop floor, a life of hunger in the northeast, a mother who had to work 12 hours a day to feed eight children, crossing the country in a truck to find a job."

What brought Lula and the cardinal together was not just a common concern for the poor, but a conviction that the regime could be undermined without violence. Lula, the cardinal told me with appreciation, had even abolished picket lines from his union's strikes. I spoke to Lula when his reputation as a firebrand was probably at its peak, yet he went out of his way to underline his moderate approach, a line he has kept over the 26 years since. "I believe that the government is much more frightened by the seriousness of our proposals for the transformation of society than by the crazy propositions of the lefties," he told me. "The working class has begun to discover itself, and it is finding its identity without doing anything silly… It is better to go forward just one millimetre, but knowing we won't have to go two millimetres backward later." As if to underline his caution, he added, "We can only improve our situation if we don't impose our thoughts. I don't propose what is on my mind. I propose what I get from the hearts of the workers."

For an outsider visiting a still turbulent Latin America at a time when Che Guevara had been in his Bolivian grave for only 13 years, the striking thing was that despite Brazil's economic and political ferment, the extreme left was marginal. The debate was between the military right, with its technocrats and middle and upper-class supporters, and what might be called the "radical moderates," in the form of the church and Lula's incipient Workers' party.

Cardinal Arns, however, was careful not to endorse the Workers' party, and he completely rejected the parallel I drew between Brazil, with its political prelates, and Iran, where a movement led by Ayatollah Khomeini had recently overthrown the shah. "Brazil has produced two or three Khomeinis in the past," the cardinal told me, "but there's no one in the church today who has a vocation for that. I have no desire to grow a beard or take power."

The radical moderates did eventually take power in Brazil, through the ballot box, after the generals had voluntarily given way to a civilian regime that later called elections in 1985. Following three unsuccessful tries, in 1989, 1994 and 1998, Lula finally won the presidency in October 2002.

The year now is 2005 and I am back in Pilõezinhos. It is 17 years since I last spent time in the village. Valéria, who no longer lives there, is with me. Much seems as I left it. The village still rests in the green hills, its yellow colonial church has the same blue doors, its square is still crisscrossed with the traffic of mules carrying sugar cane and pineapples. The gushing flood-filled river still races between the breadfruit plantations.

But as my eyes focus through the heat haze, I start to see the differences. The square has half a dozen cars parked around it, and a batch of motorcycle taxis that can spin a passenger to Guarabira in five minutes on a new metalled road. There are a couple of supermarkets with far more goods than the beans, rice, pots and pans that used to be sold in the dark little shops. There is a post office, a hardware shop doubling as a bank branch, two dispensaries selling generic medicines and an agricultural adviser marketing advice and modern seeds to the peasants.

Walking around the village, looking up old acquaintances, I learn that less visible changes have also taken place. Land reform means many people now have their own land for the first time in their lives. The peasants earn more, and rural workers over 65 now receive the entire monthly minimum wage as a pension. Lula's most important and popular social innovation has been the Bolsa Família—built on a more elementary scheme begun by his predecessor—which pays families 64 reals (£16) a month on the condition that the children attend school.

Fatima Trajano, a graduate of one of Valéria's "base communities" from the old days and now deputy mayor, takes me to the village health and dental centre. The doctor tells me that children are no longer dying, and that the birth rate is falling; 40 per cent of couples are using contraception, which is free. We walk down the street from the clinic to a primary school bursting with happy faces. In one classroom the geography books are open at "Europe," about which the children have just written short essays. It reminds me of a previous visit in 1988, when I was out walking with Valéria and a peasant asked her what I was talking. It was the first time he had ever heard a foreign language. Now the class listens as I speak slowly in Spanish, which they seem to understand, and three quarters of them quickly raise their hands when I ask them what the capital of my country is.

Fatima invites me into her simple, neat house with its running water and two flush toilets. Half the village now has these facilities, she says. I remember the old days with a shudder: the dark, dank shed in Valéria's garden and the toad as large as my two hands together, keeping vigil over the dry toilet. After lunch of local fish, beans, rice and fruit, Fatima takes me to see another innovation: a town hall in a converted shop front, with a square of tables for the elected councillors and six rows of chairs for those who want to see how local democracy works.

Seventeen years ago, Pilõezinhos seemed to be still sleepwalking, struck down by poverty and hopelessness. Today its streets are busy with bustling adults and skipping children. The religious festivals, I'm told, are celebrated in full swing. "So all this happened before Lula became president?" I ask Valéria.

"Yes, but Lula has been on the scene and pushing this country hard for nearly 30 years," she replies. "And don't forget what the church has done with its base communities. We got the people in villages like this all over the northeast to take their destiny into their own hands. They pushed on one side, Lula and his Workers' party pushed on another, and the country has moved and is now going to move faster."

Leaving Pilõezinhos on its smart new road, wondering if I will ever go back, I sense again a feeling that I get nowhere else in the world. For all Brazil's appalling inequalities, its history of military rule, its favelas that may be the most violent slums on earth, its long subjugation of black and Indian people—it remains somehow the archetypal relaxed, tolerant and gregarious society. Copacabana beach, the carnival, the samba, the hospitality, the sexual freedom: these are not just concoctions of the tourist brochure.

Brazil is richly blessed. It is home to the world's largest tropical forest and has the world's largest reservoirs of fresh water. It is self-sufficient in oil and has a wealth of hydroelectric power. It is the world's fifth largest country, both in population (188m) and in size. It is now highly industrialised. Over 80 per cent of the population is urbanised. The economy of São Paulo city is larger than that of Argentina. Few countries offer such geographic variety and natural wealth, but for the best part of four centuries too much has been squandered: the Amazon raped, the poor exploited, institutions abused. The mismanagement has gone on so long that to many it seems endemic.

Despite all this, Brazil has had periods of sustained growth. Indeed, according to the economic historian Angus Maddison, for the first 80 years of the 20th century it was, along with Taiwan, the fastest-growing economy in the world. Even today, after many setbacks, it is the world's ninth largest economy. Its average gross national income per capita is $3,000. This compares with China's $1,500 and India's $620. Can Brazil now make the final leap into the ranks of developed countries? Can it rediscover the recipe for fast economic growth, but this time a growth that lifts all boats? Can it reduce its huge gap between rich and poor, which the World Bank argues is holding back the pace of economic growth? Brazil is the most unequal country in Latin America, and Latin America the most unequal region in the world.

Not as many Brazilians are as convinced as they were in 2002 that Lula is the right man to deliver the next stage of maturation. His predecessor, the centrist president Fernando Henrique Cardoso, had laid many of the foundations for progress in his two terms in office (1995-2003). Under Cardoso, Brazil achieved fiscal discipline and social reform for the first time ever, with a stable currency, a rapid increase in primary education and large-scale land redistribution. But even with a big congressional majority, Cardoso was stymied on many important issues. His second-term attempts to slim the bureaucracy, reform the judiciary and reduce the tax concessions of the rich were all thwarted. His popularity shrank.

Denied a majority, Lula's government has been cursed with the necessities of coalition horse-trading—although the Workers' party forms the biggest group in the Chamber of Deputies and shares third place in the Senate, the upper house, it cannot govern alone. The special interests empowered by this situation comprise a broad mix: the judiciary, the still powerful latifundario, an inept and often brutal police force, the public sector workers with their 100 per cent state pensions, and the well-to-do students who receive a disproportionate share of state handouts.

Administration, as everyone knows, is not the former lathe operator's strength. Two financial scandals have taken their toll on Lula's reputation, one involving illegal contributions to his Workers' party, the other vote-buying in congress. Lula claims he knew nothing about these, and that the main culprit was José Dirceu, his former chief of staff. Last year, according to polls, the scandals lost Lula the support of Brazil's key swing vote, the middle class that rallied to him at the last election in part because he seemed more likely than others to fulfil the usual anti-corruption promises. However, Lula's economic team is talented and responsible. Growth was 5 per cent in 2004, 2.5 per cent in 2005 and is expected to be around 3 per cent this year. Job creation in the formal economy has jumped. Inflation is falling and the country is running massive trade surpluses, driven by exports of raw materials to Asia.

Lula's new chief of staff, Dilma Roussef, told me earlier this year: "It is more difficult to make this economy not grow than to make it grow. Our exports are growing faster than China's." The situation is likely to improve further as China and India continue to suck in Brazil's soyabeans, meat, mineral products and aircraft. And if, as Roussef predicts, Lula reduces tax on business and the middle class, the economy should grow even faster. Brazil's sophisticated diplomatic corps, rated by Ray Seitz, a former US ambassador to Britain, as one of the three best in the world, continues to exploit breaches in the EU's defences that will allow its farm products easier access. Brazil recently won an important case before the disputes panel of the World Trade Organisation, which ruled that subsidies for cotton in the US and sugar in the EU broke WTO rules. Few other developing countries have the intellectual and financial capacity to bring such complex cases to fruition. Brazil is one of the BRICs—Brazil, Russia, India and China—those countries with the potential to become globally dominant economies by 2050. Along with India and China, Brazil is seen as the developing country that must be placated in any major trade deal.

In terms of income distribution, Lula's government has built only modestly on Cardoso's achievements. In a 2004 World Bank study, Vinod Thomas, the former head of the bank's mission in Brasilia, estimated that up to 20 per cent of Brazil's people could be classed as poor, compared with 16 per cent in China and 35 per cent in India. The very poor—earning less than $1 a day—are about 8 to 13 per cent of the population. According to David de Ferranti, until recently vice-president for Latin America of the World Bank, "Brazil is not a poor country. The 'poverty gap' [the amount that would be required in direct income support to raise all the poor over the poverty threshold] is only 3.4 per cent of national income. Brazil spends much, much more than this on various forms of public outlays."

Nevertheless, since Cardoso's reforms, poverty has been steadily falling, income distribution improving, especially among younger people, and equality of opportunity widening. Brazil has reduced its infant mortality faster than most developing countries—from more than 70 per 1,000 live births in 1980 to about 30 today. Its primary school enrolment has increased quickly. But for the workforce to compete with China and India, the schools need better paid teachers and an increase in secondary school attendance (currently less than 40 per cent), and the universities have to widen their intake. In 2004, the World Bank claimed South Africa had made better progress than Brazil in closing the education gap between whites and non-whites.

Land reform remains a cry, but the issue has lost its radical appeal. Under Cardoso, 600,000 families were settled on redistributed land. The process has continued slowly under Lula, but the promised agricultural revolution has not materialised and the first two years of Lula's government saw a wave of protests and illegal property invasions by the Landless Workers' Movement, the descendants of the Cangaceiros and the Ligas Camponesas. Land redistribution protesters have gone quiet lately, partly because of the country's relatively upbeat mood, and partly because the rural poor are rallying behind the electorally threatened Lula.

In the favelas of Recife, the mood is more hopeful than I have ever seen it. Many of the old slums have been improved and upgraded into fairly respectable dwellings, complete with bathrooms. There are similar improvements in São Paulo, where the favelas' main streets now boast massive supermarkets selling the goods of the global consumer society. Most of the country's slums, however, including those of Recife and São Paulo, remain havens of crime, much of it drug-driven. The crime and murder rate in São Paulo, although falling, is the highest for any urban agglomeration in the world. In mid-2004 Lula had to send the army into the favelas of Rio de Janeiro. In Brazil, according to a report in the Economist, the number of deaths per capita by shooting is far higher than in the US or South Africa. Little has been done to reform the police forces, which in Brazil's highly devolved federal structure are the responsibility of state governors and local mayors, and thus effectively beyond the reach of Lula's administration.

The only candidate with a chance of beating Lula in October is Geraldo Alckmin, until recently governor of São Paulo state. (The other candidate is Heloísa Helena, a senator representing a left-wing splinter group that was expelled from the Workers' party after criticising Lula's economic policies.) Alckmin is running on a platform almost identical to Lula's, but presents himself as leader of a party untarnished by corruption. Alckmin's party is the PSDB (Brazilian Social Democracy party), co-founded by Cardoso in 1988, which during the 1990s staked out a position in the middle of the Brazilian political spectrum. Alckmin's candidacy is supported by the PLF (Liberal Front party)—the only significant right-wing party in Brazil.

Alckmin is known as a technocratic, hard-working and effective administrator, in contrast to Lula's often shambolic style. But he is so far behind in the polls that it will take a miracle—or a last-minute scandal—to see him elected. Yet only a few months ago it was Lula who was on the ropes, scandal-ridden and accused of failing to drive the economy forward fast enough.

In January I had a long conversation with José Serra, also of the PSDB, then mayor of São Paulo (now running to succeed Alckmin as governor of São Paulo state). Serra ran against Lula for the presidency in 2002, and many think he will succeed Lula in four years' time, assuming Lula wins a second term (he decided that Lula was unbeatable this time). He is an old friend of Lula's; both opposed the military government. In the mid-1960s, Serra was forced to flee to Chile, where after Pinochet's coup in 1973 he took refuge for six months in the Italian embassy. When Serra returned to Brazil in 1978, with a PhD in economics from Cornell University, he tried to set up a political party with Lula but found himself sidelined by Lula's leftist associates.

In person, Serra brims with intellectual energy, shooting off detailed answers on economic policy. The staff in his office seem to adore him despite the gruelling workload. One of his advisers tells me Serra has just spent eight hours in a continuous staff meeting about São Paulo's pavements. As minister of health under Cardoso, Serra was responsible for the establishment of health clinics in thousands of poor communities. He is also credited with Brazil having made more progress against Aids than any other developing country. Highly popular in São Paulo, he has tried to reform the police and has built new prisons to relieve the overcrowding that had produced one prison riot after another—though he could not head off the prison riots and street killings by criminal gangs that shocked the city in May.

"During the last presidential campaign I said I'd make more social changes than Lula. I knew that Lula had not prepared his people to govern. And it turned out they were not prepared," he told me. "So Lula's important work as a social reformer ended the moment he became president. He is charismatic and quite intelligent but does not possess the deep knowledge about particular issues. You can't run Brazil as if you are running an NGO."

Serra says he was surprised by the financial scandals that have rocked Lula's administration. "I could never have predicted them. But Lula did know about these activities. We in the opposition could have brought him down. But we decided we didn't want to destroy him. It would have returned Brazil to political instability and destroyed all the progress made by Cardoso and Lula with the economy."

Serra believes his party's candidate, Alckmin, would drive Brazil forward faster than Lula has been able to, and certainly faster than Lula would in a second term in which he would probably have to govern with an even more fractious coalition.

"Lula had to be more orthodox running the economy than I or Alckmin," says Serra. "As a populist leftist he had little credibility with the international financial community. Our interest rates, for example, are two to three times Turkey's. The climate for investment and faster growth is not as good as it could be. I learned from Chile that it is possible to have fast economic growth without increasing inflation as long as we are fiscally disciplined and do a good job with interest rates and the exchange rate."

This uncharismatic, incorruptible administrator and doctor of economics may eventually complete the social revolution that Lula did more than anyone else to initiate 30 years ago, but whose administrative incompetence and corruption blunders have hampered his ambitions. It is Serra, after all, not Lula, who built the new health clinic in Pilõezinhos.

For now, however, it looks as if Lula will remain in the saddle, even if his second term turns out to be as disappointing as Cardoso's. As Serra would be the first to admit, it is always dangerous to underestimate the pull of Lula. The former union leader has a deep hold on the affections not just of the inhabitants of the favelas and of Brazil's many Pilõezinhos, but also of liberal middle-class Brazilians who have dreamt for decades of a fairer Brazil. When Lula speaks at a rally or on television, the audience is gripped. He has dominated Brazilian politics for over a quarter of a century. Win or lose, he will continue to do so for a while yet.