Good Old Days

Lula campaigned mostly on the idea of a return to more prosperous days for Brazil — particularly those of his previous administration. Having left office in 2010 with record-high approval ratings, Lula now relied on voters remembering the 2000s, when Brazil had a strong economy and a rapidly growing middle class that was partly a product of his government’s social policies, as well as favorable international relations with both China and the United States.

After winning his third term by a narrow margin last year, Lula tried to carry this idea that “happy days are here again” into his administration. “Brazil is back,” he proclaimed in his inaugural speech. It was at the same time a promise to the world and a condemnation of the past four years of Jair Bolsonaro.

Lula’s rhetoric to date has been consistent with this view. His focus on growing the economy, increasing social spending, and rebuilding Brazil’s diplomatic standing come right off his 2000s playbook. However, the president has been forced to confront the fact that Brazil and the world are both in radically different situations than the ones he faced on first taking the presidential seat in 2003.

While every Brazilian government since the end of the military dictatorship in the 1980s has ruled through some form of coalition, Lula’s grand alliance has tested the limits of Brazil’s multiparty system. It brings together parties ranging from far-left socialists to center-right neoliberals, generating more than a few dissenting voices and directions within the new government.

This big-tent approach was effective as a “United Front for Democracy” when confronting Bolsonaro in the 2022 election. Yet the many political forces it contained soon cashed in the promises and concessions they had obtained from the Lula campaign, in many cases receiving high-ranking positions within his administration.

Out of the thirty-seven cabinet positions in his government, only ten are held by Lula’s own Workers’ Party (PT). Simone Tebet of the center-right Democratic Brazilian Movement, who came third place in the presidential election campaigning on a neoliberal platform, became minister for planning and budgets after supporting Lula in the second round of the election.

A Controversial Cabinet

There were some more controversial appointments. Minister of Communications Juscelino Filho, from the conservative União Brasil, came under fire when it was revealed that he had millions in undisclosed assets.

Tourism Minister Daniela Carneiro, who belongs to the same party as Filho, is linked to militias in Rio de Janeiro. Militias allegedly connected to the Bolsonaro family were responsible for the 2018 killing of activist Marielle Franco, whose sister Anielle Franco currently sits in the same cabinet as Lula’s minister of racial equality.

Most shocking were the revelations that General Gonçalves Dias, minister of the institutional security bureau, played an active part in the January 8 attack on government buildings by disgruntled Bolsonaro supporters who rejected the legitimacy of Lula’s election. Dias resigned as minister — to date the only member of Lula’s cabinet to do so.

This relative stability at cabinet level, even when faced with controversial revelations, might be attributed in part to the need of Lula’s government to convey a steady image. When contrasted to Bolsonaro’s revolving-door cabinet, with ministers resigning or being fired on a routine basis, Lula’s unchanging lineup might transmit the message of a return to order and normalcy that he has been clamoring for in speeches.

On a more pragmatic level, Lula’s ruling coalition at the moment has razor-thin margins in Congress. The president simply cannot afford to fire ministers from parties whose support he needs not only to pass legislation, but also to prevent political maneuvers against his own person. The impeachment of Dilma Rousseff in 2016 set a precedent for the removal of unpopular presidents if they lose the support of Congress. The significant victories of far-right candidates in the 2022 legislative elections have only worsened this danger for Lula.

Lula’s weak base in Congress also explains the lack of any major legislation passed in the last few months. While on paper the president has the numbers needed to pass laws, when it comes to specific examples of reform, congressmen from parties such as União have vocally insisted that they will not vote along party lines to support Lula. On the other hand, members of non-coalition parties like the Progressives have suggested they would be willing to back Lula’s legislation in some instances.

In practical terms, this balance of forces has discouraged the Lula administration from pursuing any immediate votes on major issues. A defeat in Congress might damage the already fragile state of the new government in such a polarized political setting.

Unexpected Challenges

Unforeseen events have dominated the first four months of Lula’s presidency. First and foremost, Lula had been attempting to rebuild regulatory institutions that were stripped clean by the Bolsonaro administration. Agencies such as Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) and National Indian Foundation (FUNAI), which are respectively responsible for the struggle against deforestation and indigenous protection, were virtually defunded in the past four years. Lula has committed to empower these bodies.

This was already a hot topic during the election campaign. But the revelation in January of numerous human rights abuses against the Yanomami people, which some have gone so far as to call purposeful extermination, increased the need for government focus on the issue.

During the opening months of 2023, the southeast of Brazil was hit by record levels of rainfall which generated intense floods as well as landslides. Flooding is a frequent problem for Brazilian infrastructure. Coming right in the middle of Carnival season, when many people were traveling to the most vulnerable coastal areas, this episode caught governmental officials unawares and led to debates about infrastructure reform. The national tragedy brought Lula together with the Bolsonarist governor of São Paulo, Tarcísio de Freitas, as both men coordinated efforts to provide aid to the affected areas.

The attack on Brasília by Bolsonaro supporters on January 8 galvanized the administration to address the issue of national security and the role of the military. Investigations of the event have revealed extensive knowledge of and support for the attack in the Brazilian armed forces. The relationship between the military and Brazil’s democratic government, which is complex and uneasy at the best of times, is remarkably tense at present.

During Lula’s first and second terms in office, the possibility of a military intervention against the executive had been virtually nonexistent. Yet now, after what we can only categorize as a coup attempt, albeit a remarkably disorganized one, the president has to tread carefully when dealing with the military leadership. The government response to the attacks was immediate, with the justice minister, Flávio Dino, promising swift justice and arrests, going so far as to call those involved “terrorists.”

As the role of the military in the events of January 8 comes more and more to light, it is yet to be seen whether Lula will pursue a more conciliatory or a more punitive stance toward Brazil’s military institutions. While he dismissed General Dias from his post following the exposure of his involvement, no charges have been brought forward against the general.

Economic Policy

Lula’s first major goal is his economic plan, which has brought him into direct conflict with the current president of the Central Bank of Brazil, the Bolsonaro-appointed Roberto Campos Neto. Under Campos Neto’s guidance, the Central Bank has committed itself to high interest rates, much to the consternation of Lula who believes that lowering the rates might stimulate the economy.

Historically, the Central Bank of Brazil has been autonomous of the elected government, and Campos Neto has the authority to keep interest rates high. However, Lula has expressed indignation at the political leanings of a supposedly neutral figure and the fact that his monetary policy might hasten a recession later this year.

Throughout March, the president issued critical statements about Campos Neto, in a gesture that many considered a breach of protocol. There was intense criticism of Lula from the Brazilian financial sector, which seems to be content with the position of the Central Bank.

There has also been division within the ranks of the PT, as two of Lula’s closest advisors, Fernando Haddad and Gleisi Hoffmann, clashed over the economic plan. Haddad, the current Treasury minister who ran as the PT candidate in the 2018 presidential election, has argued for a moderate stance, while Hoffmann, the party president, has called for a more expansive approach to social spending in education and health care.

Lula’s comments over the last few months seemed to lean more toward Hoffmann, as he reiterated his classic slogan that “education is not an expense, but an investment.” Haddad’s Treasury ministry criticized this argument. The Haddad Plan, as it is known, aims to establish certain caps on expenditure in order to increase the budgetary surplus for the coming years. Whatever Lula thinks about the matter, it seems that the plan will go to a vote in the first congressional semester of 2023 — the first major legislative challenge for Lula’s government.

Multipolar Dilemmas

On foreign affairs, Lula has attempted to turn back the clock to the 2000s, when Brazil’s diplomatic goal was to pursue a multilateral global arrangement through the framework of BRICS (the economic partnership of Brazil, Russia, India, China, and later South Africa).

He has reestablished the government’s commitment to the Chinese market and recently taken steps toward severing the country’s reliance on the dollar. On April 12, the first direct transaction between Brazil and Industrial and Commercial Bank of China (ICBC), China’s largest bank, was conducted using the renminbi instead of the dollar, signifying a clear move by Brazil away from the US economic sphere.

The global context, however, is not as benign as it was in the 2000s, when amicable relations between the United States, China, and Russia still appeared feasible. Brazil’s policy toward Russia, for example, has proved controversial in view of the war in Ukraine: Lula’s statement, later retracted, that both countries were equally responsible for the conflict generated intense criticism in the West.

Brazil’s historic position of “benign multipolarity” — as it was described under the government of Rousseff — or the “Lula Doctrine” — as some have referred to it more recently — traces its roots back to the time when the country played a key role in the Non-Aligned Movement during the Cold War. Brazilian foreign policy rejected the idea of taking an ideological side in favor of pragmatic relations to strengthen regional powers.

After the end of the Cold War, this doctrine rejected the US role as a “hyperpower,” instead favoring trade with emerging markets such as those of China and India. This was an approach that Lula wholeheartedly embraced during his first two terms. Yet it has become much more difficult to follow in an increasingly polarized world. For Lula’s government, preserving a relationship with Russia and approaching the Chinese market might mean distancing oneself from the US and European spheres, even inadvertently.

Thus far, Lula’s administration has had to deal with environmental, human rights, and political crises that have in many ways detracted from its long-term policy proposals. However, that situation is rapidly changing, as the government has brought forward its new economic plan and begun clarifying its foreign policy agenda. Over the coming months, Lula’s ability to articulate his agenda through such a troublesome Congress, prevent an economic recession, and preserve a multipolar diplomatic relationship for Brazil will be put to the test.