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However in subsequent elections several bourgeois politicians, including Da Silva in Brazil, Kirchner in Argentina, Mesa in Bolivia and Toledo in Peru have taken power. The Marxist left once again confront the “old debate” of whether the leadership in the struggle against neo-liberalism and imperialism can be led by the “national bourgeoisie” or by a class alliance including peasants, cocaleros, public employees, the unemployed and underemployed, landless rural workers and sectors of the working class.

Over the past 20 years, neo-liberal policies have been implemented by “socialists” (Chile), “populists” (Argentina), social christians (Venezuelans) and conservatives (Mexico). The decisive internal class forces backing retrograde policies of privatization, selective austerity, denationalization and massive attacks on labor and social legislation have been the big bourgeoisie in all its major variants - banking, industry, agro-export, commerce and real-estate. In no country did the bourgeoisie oppose imperialist takeovers - in Argentina it was the national bourgeoisie that sold off the privatized public firms to US and European multinationals. All the electoral regimes,(whatever their putative label), based their development strategies on securing the backing of local capital. The latter conditioned its co-operation on the implementation of neo-liberal policies, since all sectors of the Latin American big bourgeoisie are integral units of international financial, trading and technology circuits dominated by US and European imperialism. As a result, Latin American ‘transnational capitalists’ did not back any campaign challenging the IMF programs - on the contrary they supported them. As a result the only social forces which acted to block, resist and even overthrow neo-liberal regimes were led by class movements -including Indian peasants, urban neighborhood committees of unemployed, rural landless workers, precarious workers, peasants, public employees (petrol, electrical workers, teachers, health workers and so on) and the poor self-employed. Only in a few exceptional circumstances did sectors of the organized private unionized industrial workers engage in class warfare. What is crucial is that these struggles were neither led nor directed by the bourgeoisie either national or international. The successful opposition to the privatizations of water in Cochabamba, Bolivia and of electricity in Arequipa, Peru was led and based on mass popular movements in the face of the political impotence or complicity of the nominal “populist” or “socialist” electoral parties. In Argentina in December 2001 mass popular movements of downwardly mobile middle class allied with unemployed workers drove out several would-be Presidents in a few days. In Ecuador similar movements of Indians and public employees organized the overthrow of incumbent neo-liberal President Mahuad in January 2000 - and now threaten to do so to Lucio Guitierrez who abandoned his Indian-peasant supporters to embrace the “national bourgeoisie” of Guayaquil. In October 2003 the mass of coca growers of Yungas, the miners of Huanin, the urban unemployed and underemployed of El Alto, the manufacturing and self-employed of La Paz and Cochabamba overthrew the neo- liberal regime of Sanchez de Losada - a leading capitalist client of Washington backed by the “national bourgeoisie” of Sta. Cruz.

Several observations are in order: The historical and empirical evidence demonstrates that the direct action class-based socio-political movements have been the only political forces capable of resisting, reversing or overthrowing neo-liberal regimes and policies. There is no evidence that any electoral regime in which the national bourgeoisie plays an essential role has challenged neo-liberalism or the US- backed neo-colonial Latin American Free Trade Area (ALCA in Spanish).

The Politics of the Da Silva Regime

In November 2003 a survey of business elites in Latin America found Brazilian President Da Silva as the “best President” in Latin America over the second choice, Chilean President Ricardo Lagos by a wide margin of 39% to 20%. In the US and to a far lesser extent in Latin America, leftists, journalists and progressive academics still refer to him as a ‘center-left’ popular leader. To evaluate the contrasting perceptions and expectations of the capitalists and leftists requires us to follow several methodological procedures: 1. Historical transformation of the PT - how it has evolved over the last 25 years, 2. The relations between the PT and the national, state and municipal governments where it has held power or influenced legislation. 3. The changing nature of the PT’s program. 4. The electoral campaign and political alliances and economic pacts during the 2002 presidential elections. 5. The “image” and reality of a candidate. 6. The identity, background and practices of the key ministerial and economic functionaries of the Da Silva regime. 7. The political-economic decisions and strategic priorities of the first 14 months of the regime.

In the early 1980’s the PT was closely linked to the social movements. Internally there were wide-ranging debates and political tendencies - from Marxist to social democrat and there was a collective leadership. By the early 1990’s, the PT was transformed into an electoral machine increasingly devoted exclusively to elections and increasingly ‘vertical’ in its decision-making structure. The range of debate was limited and the elected officials oscillated between social democratic and social liberal policies. By the 2002 elections, the Party was highly centralized and run by Da Silva and his personal clique. Over 75% of the delegates at the Party Congress were functionaries, professionals, officials and the rest were mostly full-time trade union bureaucrats. The program embraced structural adjustment policies, labor flexibility, full foreign debt payments and privatizations. The Party was no longer a “workers party” in program, structure, and leadership (Da Silva has been out of the factories and a full time functionary for a quarter of a century).

From the early 1980’s to 2002 the PT held several governorships and governed in many municipalities - including Sao Paulo. The record was a mixture of social liberal to social democratic policies with little active support for the agrarian reform struggle of the landless and no effort to municipalize public services. The much-vaunted “participatory budget” of Porto Alegre in which neighborhood groups within a municipality would assemble and decide on spending priorities, affected only a small fraction of the overall city budget - which was decided by the municipal council. By the late 1990’s elected PT officials joined the right in privatizing local public firms, implementing regressive taxes on pensioners, and imposing austerity budgets. The Presidential electoral campaign of 2002 revealed the authoritarian rightward shift of the PT. Without consulting let alone debating issues either in the party or with the social movements, let alone the urban and rural poor, Da Silva and his personal clique selected a textile millionaire from the right-wing Liberal Party as his running mate, signed on to a pact with the IMF to reduce pensions, wages and social programs and set aside a surplus of 4.25% of the GNP to meet foreign debt payments. Da Silva refused to allow the PT to participate in a referendum on ALCA organized by social movements and the progressive Church. Da Silva’s campaign was largely financed by big business contractors, racketeers and industrial capitalists - in part exposed by a video aired in Feb. 2004 showing one of Rio’s biggest “numbers” racketeers making a payoff to one of Da Silva’s campaign fundraisers in 2002.

Da Silva and his clique led by Jose Dirceu (known as the “Commissar” within the PT for his authoritarian style) selected the key economic decision-makers within the regime -many staunch neo-liberal millionaires, most of whom never voted for the PT. Henrique Meirelles, former President of Fleet Boston Global Bank was named head of the Central Bank. Antonio Palocci, an ex-Trotskyite turned fundamentalist neo-liberal, was appointed finance minister. Luiz Fernando Furlon, chairman of the agricultural giant Sadia, was appointed head of the Trade and Development Ministry. Roberto Rodriguez, president of the Brazilian Agribusiness Association with strong ties to Monsanto, was named Agricultural Minister. These ministers and Da Silva advisers established the social and economic parameters and strategy of the regime, which was later approved by 72% of the Party. The “left” PT was given several ministries with reduced budgets and personnel and directed to work within the “free market” framework. The main dispute within the regime was over the degree of support to foreign and domestic finance capital and agro-exporters versus industrial capital. The interests of workers, landless workers and public employees were at best ignored and at worst severely harmed.

Da Silva Regime Policies

Given the evolution of the PT, the structure and composition of the regime, and the political alignments with the IMF and local big business, Da Silva’s total embrace of the neo-liberal agenda is understandable.

Macro-Economic Policy

The PT regime implemented a debt payment policy that exceeded the ex-President Cardoso’s agreement with the IMF. It raised the budget surplus to 4.25% of the GNP, paying out 150 billion Reales (approximately $50 billion dollars) to foreign and domestic lenders in 2003. To do so he reduced pension payments to public employees upward of 30% even for low and middle-income retirees. Tight money policies, the surge of speculative investment, and debt payments led to record high unemployment in Greater Sao Paolo - where 40% of Brazilian industry is concentrated - to a historically high 21%. Salaries and wages plummeted by 12% as Da Silva promoted wage constraint to foster “competitiveness”. At the same time finance capital, local and foreign, charging from 22% to 18% interest rates reaped a bonanza. Stock market speculators doubled their money as the BOVESPA (the Brazilian Stock Market) rose 98% during 2003.

Agricultural Policy and Agrarian Reform

Agro-business shared in the bonanza. Agro-exports grew by 20%, largely because of China’s booming demand for soya, cotton and other staples, and the regime’s policy of channeling most credits and financing to this sector. While 10% of the agricultural elite benefited, the mass of landless rural workers were ignored - land distribution beneficiaries declined precipitously under Da Silva. Prior to the election he promised to settle 60,000 families while the landless rural workers (MST) demanded 120,000. Ex-President Cardoso (a close ally of Bush) had averaged 40,000 each year over his eight years in office. The Da Silva regime settled 10,000 families - the lowest number since the military regime 20 years earlier.

Da Silva has put on the table for 2004 labor “reform”, privatization of infrastructure, greater de-regulation, opening new regions of the Amazon for exploitation, approval of ALCA “lite” (free trade in stages with reciprocity). In foreign policy Da Silva criticizes ALCA because the Bush Administration does not consistently practice free market policies regarding agricultural products. As Da Silva has repeatedly stated “free markets means prosperity if they are pursued by all parties.” Brazil has intervened against the progressive Chavez regime, organizing a group dubbed “Friends of Venezuela” made up of right-wing regimes hostile to Chavez (Chile, Mexico, Spain, US and Brazil). When Venezuela requested adding a country more sympathetic to the country, Celso Amorin, Brazil’s foreign minister refused. As Fidel Castro said at the time - “With friends like this who needs enemies.” Brazil’s servility is best evidenced in Da Silva’s dispatch of scores of military police to Haiti in support of the US-backed coup that overthrew President Aristide. Da Silva has visited Bush five times during 2002-2003 coordinating policies and seeking support from Wall Street and Washington for his imperial-centered development model (described by his ideologues as “inserting Brazil into the Globalization model).

Human Rights

The Pastoral Land Commission (CPT) in Brazil provides the most reliable and comprehensive yearly reports on human rights in Brazil. From January 1 to November 30, 2003 the CPT counted 71 assassinations of rural workers, an increase of 78% over the previous year. Serious injuries doubled while attempted assassinations increased 76%. There was a 227% increase in families ordered off the land by judicial order and there was an 88% increase in squatters forcibly removed from the land. There are several factors explaining Da Silva’s benign neglect of human rights: First and foremost is the strategic role which big landholders involved in the agro-export sector play in foreign exchange generation to meet debt obligations. Da Silva is very reticent in becoming involved in conflicts affecting any sector of the big landlords that might “unsettle” the agro-exporters, hence Da Silva’s resort to the subterfuge of “limited jurisdiction” and “division of powers”. His self-defined limited powers regarding human rights violations does not apply however to his privatization-by-decree of state banks - bypassing Congress.

Violent infringement of Indian territory has increased dramatically as the Indian protective agency (FUNAI) has seen its budget slashed and personnel reduced thanks to Da Silva’s 10% cut in the social budget.

Lula’s pet project “Zero Hunger” has also failed to make a dent in poverty - as Da Silva reduced its budget by 25% to meet the budget surplus agreed with the IMF.

With his usual theatrical demagoguery Da Silva proclaimed early in his Presidency that all Brazilians would have three meals a day by the end of his term. He then journeyed to his hometown, Caetes, in the Northeast to launch his program “Zero Hunger”. At the end of December 2003, Bishop Irineu Roque Scherer whose jurisdiction included Caetes pointed out that “Da Silva has a pretty speech which charms and convinces local people but the PT doesn’t follow through. Consequently the government promises, but nothing happens.”

The Da Silva regime has clearly and forthrightly defined a four-year program of deepening and extending neo-liberal policies. The PT has allied itself with some of the most retrograde parties in the Congress and elites in the economy to push through its neo-liberal policies. Its criticism of US trade policies go in the same direction - more free trade, not less. To push through its policies, Da Silva has expelled and disciplined over a dozen congress people. Thousands of militants who built the PT and engaged in the early struggle have torn up their membership cards. The PT is replacing them with new members recruited on the old patron-client relationships. What is abundantly clear from any serious examination of the structural links between finance capital and the Da Silva regime and the class composition and policies of the Da Silva regime, it is clearly a regime of the Right with a deep and abiding commitment to neo- liberalism. This is a great setback for the Brazilian workers, employees and rural workers. However they have returned to the only true and tested forms of struggle - organized class mobilization via direct action, independently and in all cases against Da Silva’s policies.

Land occupation increased from 176 in 2002 to 328 in 2003. The number of families that participated in land occupations rose from 26,958 in 2002 to 54,368 in 2003. In 2004 the Da Silva regime promises greater concessions to finance capital, foreign investors and greater incentives to agro-exporters. By March 2004 popular resistance has increased and class conflict is spreading from industry to countryside. Some commentators are questioning whether the Da Silva regime, like others of its nature, will be forced to resign before its term is concluded. Once again, the Da Silva experience demonstrates that “populist” regimes backed by the bourgeoisie are incapable of solving Latin Americas problems of stagnation, unemployment, landlessness for the peasants and imperialist pillage.