Transport development will be one of many challenges for Brazil’s new president – the former trade union hero known as “Lula” – in his quest for a new society. Sergio Benevides considers the potential for change

On 1 January 2003, for the first time in history, Brazil witnessed the beginning of an administration headed by a politician identified with the working class. The victory of Luiz Inacio Lula da Silva in last year’s presidential election ushers in an era of great challenges for the largest country in South America. If those challenges can be overcome, his term could have a profound impact on Brazilian workers, the country and Latin America itself.

Working as a mechanical turner, Lula was a trade union activist for many years. He became president of the metalworkers’ union in 1975, when Brazil was under a military regime, and became heavily involved in international trade union affairs. In 1980, he participated in the creation of the Partido dos Trabalhadores (Workers’ Party). Following the re-establishment of free elections, he ran in all presidential campaigns.

Unlike his past campaigns, which were marked by a rhetoric identified with traditional left positions, the platform that led him to success this time was a conciliatory one.

This placatory tone, combined with the hopes raised by Lula’s huge victory, has stilled the voices of the opposition for now. They have decided to wait at least a few months until it is safe to choose sides. It is hard to say where this leaves Lula’s vision of building a social pact between the different constituencies in Brazilian society. In the beginning of his term, boundless optimism is understandable, yet it is hard to believe that a consensus will be established and endure at any cost.

How far should reform of the labour laws go in a country that has to foster industrialisation but which already has a cheap labour force compared with the wealthy developed nations? In the basic metal industry sector for instance, the cost of labour in Brazil was equivalent to approximately US$ 9.6 per hour in 1998, while in the US it corresponded to US$ 19.86. Reducing the Brazilian pay level – or even not raising it – would mean the ruin of a politician whose career has been marked by social concerns.

Lula has a vision for industrial development based on regional poles of production focusing on both the domestic and the foreign markets. Such an objective demands investment in transport in order to link the different regions of the country and to make the flow of goods to other nations easier. Lula’s program proposes the diversification of transport systems, to compensate for the supremacy of road-based transportation in Brazil. It means that the government intends to build railways and to establish more efficient air and water routes.

The development of the transport systems will also be indispensable to Lula’s foreign policy. His project requires the reinforcement of Mercosur, the economic bloc that includes Brazil, Argentina, Paraguay and Uruguay. The growing trade involving those countries may become an incentive for both their agricultural and industrial sectors. The infrastructure of the bloc is, then, fundamental to the functioning of the national markets included in Mercosur.

The main artery of communication in Mercosur is the waterway formed by the rivers Tietê and Paraná, which connect the centre of Brazil to its partner countries. But new transport routes of great impact have already been designed. One of them, a major road-building project is the so-called South American Route, between the cities of São Paulo, the industrial and financial capital of Brazil, and Buenos Aires, in Argentina.

Two other important projects

Two other important projects are the road and railway connections between the port of Antofagasta in Chile and the ports of Rio Grande and Santos in Brazil. Both projects would establish, for the first time in South America, a direct communication between the Atlantic and Pacific Oceans, and would open new perspectives of trade with the Pacific markets.

The importance of these initiatives lies in the fact that the Lula administration defends an economic policy based not only on the financial control of inflation (rising prices were a huge problem in the Brazilian economy until the beginning of the 1990s), but also on economic growth. The development model it has proposed depends on the integration of internal and external markets, on higher patterns of consumption in Brazil and Latin America, and on investments in transport and infrastructure. The success of that policy is critical to addressing the risk of any internal split in Lula’s social and political base.

Lula’s political background may lead to the assumption that the working class will support his administration, but not all trade unions sided with him in the first round of the presidential campaign. Some of them could easily turn against the government if its policies do not succeed.

However, trade unions in Brazil have changed significantly in the past 10 years. Workers’ claims appear now to be focused not on better wages, but on fighting unemployment, and that strikes have been losing their importance as a means of putting pressure on employers. In 2001, according to official data, only 19 per cent of the urban trade unions and five per cent of the rural ones chose to strike. Although strikes are still an efficient mechanism in sectors such as urban transport, these figures can be considered low in a country where 31.1 per cent of families earn less than US$ 66 per month. During the 1980s, workers’ federations organised four general strikes in Brazil – and this could not be repeated in the following decade.

Official statistics also suggest that there is some disposition for dialogue. Although only 50 per cent of trade unions were involved in negotiations with employers in 2001, 21 per cent of those that negotiated were not registered in the labour ministry. Since union registration has traditionally been a prerequisite for negotiating rights, this figure indicates that employers are being relatively receptive to dialogue, even when the formal requirements are not fulfilled.

There is no doubt that unemployment and insecurity have already diminished the bargaining power of trade unions in Brazil, as well as in other Latin American countries like Argentina. The difference is that Lula’s origin and his political past raise the hope that workers will have a voice in his administration. He is, at the very least, an experienced negotiator – so much so that he seems to trust in his ability to maintain a broad consensus in the country.

Sergio Benevides is a journalist and anthropologist, formerly editor of the international section of Jornal do Brasil, one of Brazil’s four leading newspapers. He is currently working on a book on refugees and is a contributor to Rumos, a magazine on business and the economy.