Here's something which illustrates the conditions Lula was confronting when he took office, the wreckage left over from the previous President:
The Struggle Against Neoliberalism
by Tom Lewis
International Socialist Review, June/July 2001
Crisis hounded Brazil's president Fernando Henrique Cardoso this spring as developments on several fronts threatened to weaken his government. Looming energy shortages, a snowballing corruption scandal, the uncertain slide of the real, a negative human rights report, and new evidence of the massive inequalities in Brazilian society combined to punish Cardoso's public approval ratings.
But Cardoso has only himself to blame. His government's pursuit of neoliberal economic and social policies has caused the problems that Brazilians face today. Beyond drought and low water levels, for example, the power restrictions that are due to hit Brazil in June can be traced directly to the inability of privatized energy companies to meet rising demand. Part of the ongoing corruption scandal involves the private pocketing of public funds, including government insider tips on official currency movements, which allowed a few private bankers to loot millions.
A report released by the Brazilian Institute of Government Statistics in April also shocked the nation when it revealed that, after a decade of neoliberal reforms, the top 10 percent of Brazilian society averaged an income 19 times greater than the lowest 40 percent. A banner headline in a major Sao Paulo daily newspaper proclaimed, "The country ends the 90s as unequal as it began" ('Pais termina anos 90 tao desigual como comecou').
As if all of that wasn't enough, the Cardoso government was forced to admit to charges of widespread police brutality and corruption during a May appearance before the United Nations Committee Against Torture. The government thereby confessed to the world the kind of treatment it metes out to the poverty-stricken offenders who are created by its very own policies of eliminating jobs and reducing social services.
The resurgence of struggle
The public relations disaster for the Cardoso government occurs against the backdrop of a resurgence of popular struggle. Various end-of-year retrospectives identified the distinctive feature of 2000 as "the messages the people sent to those in power in the Republic-messages left in the streets as well as in the ballot box." A Catholic bishop in Rio de Janeiro explained, "Brazilians today are living a feeling of disillusionment with their country. Environmental degradation, globalization of the economy, and social exclusion prove that the model of development needs to be reformed."
In April 2000, hundreds of indigenous people protested their exclusion from the official celebration of the 500th anniversary of the "discovery" of Brazil and were greeted with police violence. That same month, following demonstrations by the trade unions and left political parties, the government agreed to raise the minimum wage. The Landless Rural Workers Movement (MST, Movimento dos Trabalhadores Rurais Sem Terra) launched an occupation of land and buildings in 12 capital cities during May as a protest against the slowdown of land reform and the failure to extend credits to existing settlements.
A wave of protests broke out in June 2000, uniting teachers, health workers, bank workers, and transit workers in huge demonstrations against the Cardoso government's economic and social policies. In July, public opinion pressured Cardoso into meeting with MST representatives in an attempt to find a way to resume expropriating lands and granting credits to the settlements. MST militants staged a new round of land and building occupations in September to protest the government's failure to deliver on the promises Cardoso made in July.
In September 2000, six million Brazilians participated in a national referendum on the external debt. The referendum was organized by the National Council of Brazilian Bishops and supported by numerous nongovernmental organizations and the opposition political parties. Ninety-eight percent of voters called for a national hearing on the debt, while fully 93 percent favored immediately repudiating the debt and severing relations with the International Monetary Fund (IMF).
In October, the Cardoso government unleashed a ferocious campaign of violent repression against the MST that led to numerous conflicts in the countryside.
~snip~
"Savage capitalism": Neoliberalism's forerunner
Brazil boasts the world's eighth-largest economy today. In 1999, it produced $783 billion in goods and services, placing it between China ($980 billion) and Canada ($591 billion). To put this in perspective, Argentina, the second-largest economy in South America, is two-fifths the size of Brazil's and ranks as the 17th largest economy in the world. Trade between the U.S. and Brazil is modest from the U.S. perspective, accounting for one percent of U.S. imports and exports. The U.S. exported $15 billion of goods to Brazil in 2000, while Brazil exported $14 billion of goods to the United States. From the Brazilian point of view, however, the balance of the period 1994-2000 is exceedingly unfavorable. Brazilian exports to the U.S. grew barely 5.2 percent between 1994 and 1997, while imports of U.S. goods skyrocketed by 116.5 percent.
Despite its economic strength, Brazil has suffered for 30 years under the yoke of the U.S.-dominated international financial system. The military dictatorship that came to power in 1964 and ruled until 1984 repressed workers' organizations, curtailed citizens' rights, criminalized membership in left political parties, purged the public administration, and practiced systematic torture and summary execution. This terror served as the social basis for what became known as Brazil's "economic miracle" of the 1970s. Favorable access to foreign loans, as well as a tripling of foreign direct investment between 1970 and 1973, allowed for the diversification of Brazil's economy, making it less dependent on its main export, coffee. Gross domestic product (GDP) increased at a yearly average of 11.2 percent between 1969 and 1973.
Yet the "miracle" also produced a number of negative effects. Brazil became excessively vulnerable for the first time to the flow of international commerce and the dictates of international bankers. Growth also made Brazil more dependent on certain imported products, especially petroleum. Expansion led to higher prices and so favored high- and middle-income Brazilians while squeezing most urban and rural workers. The result was to widen the already horrendous gap between rich and poor. As one historian illustrates:
If the minimum wage of January 1959 had been 100, that wage would have fallen to 39 in January 1973. This return is especially significant if one considers that in 1972, 52 percent of the working population was making less than one minimum wage, and 22 percent was making between one and two minimum wages.
This harsh reality, along with the flagrant disregard of the environment, is what was meant by the phrase "savage capitalism"-the method by which Brazil entered the modern global economy.
More:
http://www.thirdworldtraveler.com/South_America/Brazil_Neoliberalism.htmlhttp://2.bp.blogspot.com/_XFynFBqCznA/R4pVt32WBKI/AAAAAAAAD4A/H5uwuYU3C9M/s400/fhc+exterminador.jpg