Lula’s Legacy

Brazil’s charismatic (now ex) president Lula has been perceived as a great leader worldwide. Obama called him “the man” and Fidel Castro ” dear comrade”; in Brazil, after 8 years in power, his popularity rate was above 80%, demolishing the theory that being too long in power diminishes public approbation. Nonetheless, time will tell us whether the world’s current perception of Lula’s mandate is a misconception. I can only offer you facts:

The main positive highlights of Lula’s era were:

–       Reduction of misery (20,5 million people left this situation, according to FGV).

–       Growth of lower middle class

–       Followed the economic policies set by his predecessor Fernando Henrique Cardoso.

–       In 2010, Brazil’s economy grew at about 7,5 %.

–       Lowest unemployment rate ever (5,7%)

–       In the political front, Lula did not try to run for a third mandate, which is against the Brazilian constitution and would force an institutional crisis.

However, hard facts undermine the “Lula myth:”

During the Lula Period, Brazil presented a lower annual GDP growth rate than the average of the Latin America continent ( 4,% against 4,64%). Only Mexico, with 2,1%, is below Brazil in the area.

During the 8 years of Lula’s leadership, Brazil was the BRIC country that had the lowest annual GDP growth average: 4%,  against Russia’s 4,8%, China’s 10,9%, and India’s 8,2%.

In an article to the Financial Times, Martin Wolf registers that, from 1995 to 2009, from Fernando Henrique to Lula, Brazil’s participation in global GDP actually went down from 3,1% to 2,9%.

Regardless of the growth in total exports, Brazil’s weight in global trade is still a little higher than 1%.  One of the main reasons was the anti-Americanism feeling that drove our foreign policy, focusing in “South- South” relations.

Brazil presents 10,75% of interest rate. Brazil is the world leader of real interest rate (after deducting inflation): around 5% per year. By comparison, the world average is about 2% even among emerging economies. The most obvious reason for such high interest rates is the continuous growth of public spending.

I have not even mentioned the decadent legacy that Lula left in some fundamental areas such as infrastructure, education system, tax structure, labor laws and others. Even though some progress was made, it is clear that the so waited future has not yet arrived for “the country of the future.”

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About Ricardo Geromel

Ricardo was born and raised in Brazil but also has Italian citizenship. He holds a bachelor’s degree in business management from Fairleigh Dickinson University. This erratic blogger is a master candidate in Paris at ESCP-Europe, but presently in a gap semester. He speaks five languages and has worked as project manager for Bolloré Group in Guinea Conakry, West Africa and as agricultural commodities trader for Noble Group in Switzerland, Hong Kong, Argentina, Paraguay, Uruguay and Brazil.
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3 Responses to Lula’s Legacy

  1. Pingback: Lula’s Legacy (via Brazil Global) « Expat American Living in Brazil

  2. AdrianLesher says:

    To be fair, Lula came into office with a country that, according to the New York Times, was the “most inequal country in the world.” In judging Lula’s performance, it is only fair to consider what he had to deal with when he started.

    The Times piece goes on to say: “Today, however, Brazil’s level of economic inequality is dropping at a faster rate than that of almost any other country. Between 2003 and 2009, the income of poor Brazilians has grown seven times as much as the income of rich Brazilians. Poverty has fallen during that time from 22 percent of the population to 7 percent.”
    http://opinionator.blogs.nytimes.com/2011/01/03/to-beat-back-poverty-pay-the-poor/?scp=3&sq=brazil&st=cse

    Add this to the fact that Brazil escaped the effects of the global downturn, and Lula looks very good.

    Like

  3. Pingback: Brazil Global’s top posts of 2011 | Brazil Global

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