Brazil at a Crossroads

·Carlos Thomaz G. Lopes lawyer, author of Brazil at a Crossroads: An Evaluation of the Economic, Political and Social Situation
·Margaret E. Keck , Political Scientist, Professor of Political Science at The Johns Hopkins University
·Eliana Cardoso , Economist, Visiting Professor at Georgetown University.
·Paulo Sotero , journalist, Washington correspondent for O Estado De São Paulo

Daunting challenges await Luis Inácio "Lula" da Silva after the symbolic transfer of the presidential sash from Brazilian President Fernando Henrique Cardoso on January 1st, 2003.
Carlos Lopes underscored the significance of Lula's victory but warned that several promises, on which his success was based, will not be fulfilled. Carlos noted that these pledges created expectations within the Partido Trabalhadores (PT) and Brazilian society that will be rapidly replaced by frustration when reality renders them unattainable. Lopes then discussed these upcoming challenges in the context of economic, political, socio-cultural, and psychological dimensions.
In the economic dimension he emphasized the accumulation of problems and deficits that will require policies capable of recovering growth without impairing economic stability. In the political dimension Carlos underscored the gradual improvement of Brazilian democracy since the transition from a military authoritarian regime, and its most meaningful accomplishment: the peaceful and efficient implementation of the recent elections. In the socio-cultural dimension he directed attention to Brazilians' ability to adapt themselves to "a chaotic environment of ever-changing rules." Lopes felt the psychological perspective important because of lofty expectations generated by Lula's campaign. He recommended the adoption of an agenda organized according to four principles: measurable results, achievability, simplicity, and communication.
Margareth Keck began by emphasizing the importance of PT as a party that has evolved beyond the basic legitimacy of popular movements from which it began. From an administrative perspective, the PT has proved its competency at the municipal level, but has also shown strain between the accommodation of ideological beliefs and administrative efficiency. Dr. Keck felt that the most evident and immediate political challenge for Lula will be to govern without the benefit of the broad powers granted by Medidas Provisórias (Provisional Decrees) that were recently banished by Congress. She underscored tremendous challenges such as: inequality, the need to constantly negotiate coalitions for political support, and the complex fiscal situation allowing little room to operate within a tight budget. The latter will likely lead to a re-negotiation of 20% of the budget with Congress . . . with all the negative impacts of pork barrel politics to contend with.
Eliana Cardoso felt that this was a time for celebration not only because of the high quality of the transition process but also because of the important achievements of the Fernando Henrique Cardoso administration in the areas of aids mortality, healthcare, illiteracy, and education. Eliana then mentioned two important risks that could diminish the positive climate generated by these achievements: doubts regarding the sustainability of the public debt and the gap between new expectations and realistic implementation that will occur. She warned about the critical situation of the Brazilian economy, which she perceived to be a result of bad economic policies adopted between 1994 and 1998. She concluded by presenting three possible scenarios for the economy: "muddling through"- a continuation of the current pattern of management, "hell" - a total financial collapse and default with dreadful implications for the region, or a "happy ending". At this early juncture, she noted that the transition team has done a good job calming the financial markets which does lend support to at least the "muddling through" if not possibly the happy ending outcome.
Paulo Sotero continued in this vein, praising Lula's skillful maneuvering and the individuals appointed to manage the transition process. Paulo felt that one should not make speculative comparisons between Lula's emerging administration and those of Tony Blair or Felipe Gonzales. Brazilian circumstances as well the history of Lula and PT in fact prohibit such comparisons. Additionally, Paulo noted that during the complex negotiations ahead for the implementation of the Free Trade Area for the Americas, Brazilians would come to the table with little appetite for discussion unless the US demonstrated a genuine interested in Brazilian (as well as those of other Latin American countries) concerns and was ready to offer real and serious offsets in terms of reducing protectionism.