With less than a year into his second term, there are rumors that Lula may be considering another run in 2010. Permanent re-elections are the rage in Latin America, with leaders from the entire ideological spectrum trying to remain in power. Like his Amazonic neighbor, Alvaro Uribe, Lula weakly rejects the re-election idea. Nevertheless, a cadre of Lula supporters is furiously working on the initiative. The possibility that Lula could be considered for a third term reflects the demise of the Brazilian political party system and the favorable external conditions. The latter is creating an economic boom that was not seen in decades, making Lula extremely popular. Nevertheless, a third term for Lula would be devastating for Brazil’s democratic system. Ironically, it would also return the country to the authoritarian rule that he helped dismantle during the 1970s and 1980s.
Brazil’s political parties are in bad shape. After an endless spate of scandals and infighting, the PT is in tatters. The PMDB remains an amorphous body, without any ideology or direction. PFL, once the antidote to Lula and the Left, is trying to reinvent itself. Last of all, PSDB remains a regional party, unable to fully capitalize on the successes of President Fernando Henrique Cardoso. Likewise, Lula is taking full advantage of the economic boom, to further his political power. There have been no meaningful economic reforms. On the contrary, the business and financial sectors are thrilled that he did nothing. They are happy to see that he preserved Cardoso’s legacy through status quo. While there have been cosmetic changes, Brazil’s infrastructure remains in shambles. Indeed, the national infrastructure is falling apart, given the economic boom. Roads are clogged. The air transportation system is in chaos, and the national gas grid is stretched to the limit. At the end of October, Petrobras was forced to reduce gas output by 17% in order to safeguard supplies for the thermoelectric generating plants. The reduction in gas was a grim reminder that Brazil is living beyond its limits. The media-orchestrated announcement last week of the new Tupi oilfield was an attempt to deflect some of the concerns about Brazil’s energy bottlenecks. At the same time, government spending continues to rise, redistributing wealth through social assistance programs and minor employment schemes. This is fueling the consumer boom that is sweeping the nation. However, it is also sowing the seeds of its demise.
Benefiting from the commodity boom, Brazil is an exporting powerhouse. It is one of the main producers of iron ore, pulp, sugar, soybeans, wood and meat. However, the consumption boom will soon convert Brazil’s current account surplus into deficit. Consumption may be Brazil’s main engine of growth, but it quickly becoming a credit-fueled economy. Consumer credit is proliferating, providing fixed rate mortgages and generous cars loans. Credit cards are ubiquitous. Indeed, retailers are gearing up for the best Christmas in 13 years. Given the heady pace of consumerism and the availability of credit, there is no reason why Lula is not extremely popular. However, a third term would be devastating for the country’s democracy. Now that Brazil demonstrated to itself and the world that it could be successful, regardless of the ideology of the national leadership, it would be a shame to see it return to authoritarian rule. Lula may be a populist rather than an authoritarian, but it is a dark fact that populists eventually decay into authoritarians if given sufficient time in office. It would also be a sad twist of events to see the person who led the campaign to end Brazil’s authoritarianism, return it to where he began almost 40 years ago.