The Brazilian Dream

The Workers Party reshapes the country from the bottom up

| September-October 2002


Wall Street is in a tizzy over the October presidential elections in Brazil. When a corruption scandal involving several prominent members of the ruling Social Democratic (PSDB) Party broke in the spring, support for centrist PSDB Party candidate Jose Serra plummeted, while the stock of leftist Workers Party (PT) candidate Luis Inacio 'Lula' da Silva soared. A summer opinion poll showed Lula, a machinist and labor leader before he entered politics, in the lead with 39 percent, compared to 18 percent each for Serra and another left-leaning candidate, Ciro Gomes.

Nervous about Lula's opposition to the policies of the World Bank and the International Monetary Fund and the PT's past threats to default on Brazil's foreign debt if the party came to power, Wall Street investment banks jumped into the fray, warning clients to limit their exposure in Latin America's largest economy and touching off a run on Brazil's currency. Billionaire currency speculator George Soros went so far as to warn the São Paulo newspaper Folha in June that if Brazilians don't vote for Serra, their economy is doomed to go the chaotic way of neighboring Argentina.

The PT called the banks' actions 'financial terrorism,' and several prominent conservative Brazilian economists defended the party, saying that while it may be difficult to pay for Lula's ambitious social agenda, his fiscal policies are sound. Even London's conservative Financial Times cried foul, castigating Wall Street bankers in an editorial for meddling in the election and pointing out that the PT has a far better record than the Social Democrats at managing public finances and fighting corruption in the dozens of municipal governments where it has held power.

The Workers Party is not just a quixotic band of idealists, but a potent and rapidly growing political force. Founded by trade unionists in 1985 after Brazil's dictatorship ended, the PT has built a solid base of support in urban and industrial centers and among rural peasants. The party now runs city hall in many of Brazil's largest cities, including São Paulo, Rio de Janeiro, Porto Alegre, Belo Horizonte, and Recife, and PT governors preside in 4 of Brazil's 26 states. The PT is also the main opposition party in Congress.



The Workers Party has shown itself to be one of the more innovative political forces in the Western Hemisphere. Here's a look at some of the ideas the PT has pioneered at the local level or had a hand in implementing nationally:

Participatory Budget. Since 1989 the 1.4 million citizens of Porto Alegre have had a chance to plan and manage city spending through a broad experiment in direct democracy. Neighborhood assemblies open to all residents decide each year how to spend funds for citywide programs. In 2000, the man who founded the process, longtime mayor and PT member Olivio Dutra, was elected governor of the state of Rio Grande do Sul and has begun implementing the participatory budget process statewide.