Will Brazil Take a Hard Left Turn Down ALBA Avenue?

COMMENTARY International Economies

Will Brazil Take a Hard Left Turn Down ALBA Avenue?

Oct 31st, 2014 5 min read
James M. Roberts

Research Fellow For Economic Freedom and Growth

James M. Roberts' primary responsibility is to edit the Rule of Law and Monetary Freedom sections of Index of Economic Freedom.

After a dirty and divisive campaign, President Dilma Rousseff of Brazil’s leftist Workers Party (PT) was narrowly re-elected last week to a second term over conservative opponent Aécio Neves (with just 51.6 percent of the vote).

Apparently President Rousseff, 66, a former Marxist guerrilla, was able to convince a majority of Brazilian voters to overlook the legacy of her first term: recession, inflation, opaque public accounts, rising public debt, and a looming downgrade in Brazil’s credit rating, as well as a sprawling scandal involving bribes and money laundering at Petrobras, the national oil company.

As Mary O’Grady reported in The Wall Street Journal, Rousseff ran an anti-market, pro-welfare-state campaign that appealed to voters in the country’s government-dependent north where large numbers of people participate in welfare programs such as the “Bolsa Família.”

Brazil’s declining scores in the annual Index of Economic Freedom, co-published by The Heritage Foundation and The Wall Street Journal, is another reflection of the legacy of Rousseff’s first term. As the Index reports, the country’s judiciary is inefficient and subject to political influence. And the voracious appetite for spending by governments at the federal, state, and local levels is eating up more than one-third of Brazil’s gross domestic product. Taxes collected to fund those expenditures—close to 90 separate levies by one recent count—are falling disproportionately hard on the middle class in the form of consumption taxes.

Even more unsettling than her statist policies, however, were pre-election attempts by Rousseff and the PT to shore up the support of their leftist base by proposing the creation of populist “Councils” that could subvert Brazil’s democratic institutions.

Writing on Bloomberg View, Mac Margolis reports that the nine-page National Policy for Popular Participation edict (executive order 8243, which calls for “popular participation” in public policy) appears to be based on the Hugo Chavez playbook. The late Venezuelan leader used his “Bolivarian” ALBA movement to set up Cuban-style social “missions” and promised (falsely) to provide better literacy, health, security, and justice for the poor. As Margolis notes, those poor Venezuelans “got shortchanged, but Chavez got command and control.”

Now Margolis fears that Rousseff and the PT part will “wield the vocabulary of democracy to gut it” in Brazil, too. That is what the language of the “Popular Councils” sounds like: intended to “strengthen and articulate the mechanisms and levels of democratic dialogue” and promote “joint action” between the federal administration and “civil society.”

Mary O’Grady worries about the “damage the PT might do to institutions and the rule of law over another 48 months” if these popular councils move the country away from representative democracy. One Brazilian businessman told her that “[w]e are noticing, bit by bit, a trend toward copying Argentina, Bolivia and Ecuador. The tendency is to reduce democracy.”

The Miami Herald’s Andrés Oppenheimer is worried, too. He notes that Rousseff’s foreign policy is run by her left-of-center Workers Party’s leftist wing, which prioritizes Brazil’s ideological alliances with Venezuela, Argentina, and other leftist-ruled neighboring countries over improving relations with Washington. And that’s not likely to change anytime soon.

Although Marco Aurélio Garcia, foreign policy adviser to both former President Luiz Inacio “Lula” da Silva and Ms. Rousseff and architect of their South American policy, is likely to retirethere are plenty of younger PT ideologues ready to replace him.

Mary O’Grady finds all of this pretty “creepy” for anyone who has read history:

As the 18th-century political philosopher David Hume observed, “It is seldom that liberty of any kind is lost all at once.” Today Mrs. Rousseff is a politician who won an election. But Brazilians may someday learn that the one-party state and indefinite rule are the real long-term projects of the PT.

Several of Brazil’s neighbors have been bewitched by the siren call of Latin America’s unique road to serfdom—let’s call it “ALBA Avenue.” Will Brazil be the next to take a hard turn to the left?

This piece originally appeared in The Daily Signal