Democracy Goes South

In the '60s and '70s, the story goes, the massive hillside slums of Rio de Janeiro were such a blight to Brazil's ruling generals and their wealthy patrons, as they moved between their offices and the airport, that the highway from the airport into the city was lined, on both sides, with tall billboards that blocked the view. Terry Gilliam riffed on the idea, and the result was his classic early '80s film of dystopian society, Brazil. And here we are again. Brazil -- and all of Latin America -- are rapidly becoming the front lines in the escalating war between global capitalism and democracy.

While George Bush the Lesser screeches and demands and threatens Iraq -- the consequence, it seems at times, of late-night sessions playing Risk in the White House basement with Dick Cheney and Paul Wolfowitz -- far more interesting stuff is going on to our south. Three South America countries (Bolivia, Argentina, and Venezuela) have seen popular revolts against the forces of global capital in the last 20 months, and now both Uruguay and the regional powerhouse, Brazil, are in the mix.

Last week, the Bush Administration announced a $1.5 billion direct U.S. loan package to Uruguay, a relatively small country wedged between Argentina and Brazil whose economy has been buffeted by the ongoing economic turmoil in Argentina. Argentina's government -- mindful that the last two governments that tried to continue the country's disastrous IMF/neoliberal policies were forced out by hundreds of thousands of people on the front porch of the presidential palace -- have moved in a different, protectionist direction. That's earned the scorn of both lending agencies like the IMF and the Bush Administration, which feels perfectly justified in pumping its own economy with a protectionist farm bill and steel tariffs, but doesn't like it when smaller countries pull the same sorts of stunts.

The Uruguay loan was in part a pointed rebuff to Argentina -- a demonstration of the goodies and paydays that await pliant governments like the one in Uruguay. But the sharper point is reserved for Uruguay's northern neighbor, Brazil, whose government was also singled out for neoliberal compliance praise by former Alcoa CEO and current U.S. Treasury Secretary Paul O'Neill.

O'Neill visited both Uruguay and Argentina later in the week, but he announced the loan package while he was in Brazil instead -- because it's Brazil that matters, and Brazil that the Bush Administration and global lenders hope to impress. It's also Brazil whose troubled markets and economy -- far more globally significant than Argentina's -- may soon require global intervention. The fourth largest country in the world in area, with 200 million people and the untapped riches of the Amazon Basin awaiting plunder, Brazil is all about potential, but its economy is also significant today, and O'Neill's visit is as much political as economic. U.S. media treatment of Brazil's unstable markets, last week and for much of the last three months, has focused on the economic fallout from Argentina's crises and from the American recession, and has reported little on Brazil's domestic dynamics. Watch them.

This October, Brazil elects a new president. The incumbent, Fernando Henriquez Cardoso, who cannot run for another term, has led a center-right coalition that has faithfully adhered to World Bank/International Monetary Fund dogma -- slash social services, open the economy to global corporations, and so on -- and as a consequence Brazil, which was already heavily stratified, has seen the gap between its wealthy and its teeming slums widen dramatically in recent years.

But Brazil, like Venezuela and Argentina and Bolivia before it, also has a significant grass roots movement afoot rebelling against those policies and their impact on not just the poor, but the middle and upper-middle class. That movement may soon take power. Brazil's unstable markets, not at all coincidentally, started to wobble most seriously in May, when Workers' Party candidate Luis Inacio da Silva surged into the lead in presidential polling. Da Silva -- known popularly as Lulu -- is a well-established figure in Brazilian politics, and his economic policies are far from radical. Moreover, he's free of the taint of scandal and corruption that has plagued efforts by Cardoso's coalition to find a replacement. But he prioritizes and draws his support from the Brazilians abandoned by neoliberalism, and as a consequence, bankers are in a panic.

Concerned by Lulu's growing popularity, in early May major foreign investment banks downgraded their ratings of Brazil, touching off a financial crisis that has continued. The country's currency, the Real, has dropped sharply in value, and the stock market has plummeted. The downgrading of Brazil's bond and investment ratings in response to the polls was widely seen as foreign meddling in domestic politics, attempting to influence the election by warning of the "consequences" of a Lulu victory.

That was three months ago. Now, here comes Paul O'Neill, travelling spokesman for one of the more unpopular figures on the planet outside the USA, George W. Bush. Both O'Neill and Bush are widely (and correctly) seen as neck-deep in league with the world's economic elites. And O'Neill's first move is to give lots of money to a small neighboring country with faithfully neoliberal policies, and praise (but no money yet -- never know who might be controlling the checkbook come October) to the current, also faithfully neoliberal leadership of Brazil.

O'Neill and Bush are playing with fire, only they're probably too arrogant to know it. In Colombia, the Pentagon is wading into a civil war where the new far-right president is promising a bloodbath; the Pentagon is already heavily involved throughout the Andes. Bolivians took to the streets to reject efforts by foreign corporations to privatize, and charge a king's ransom for, their water. Argentinians, sick of watching their country being looted for a generation by disciples of Milton Friedman and their invited guests, shut their country down last winter until the IMF-types tucked tail and ran. In Venezuela, the Bush Administration is undoubtedly still irritated that its clumsy attempt this spring to dump the popularly elected Hugo Chavez -- who has done far more to improve the lot of his country's poor than leaders like Cordoso -- not only failed, but backfired.

Chavez is now more popular than ever, and a continent which now knows a lot more about popular democracy than Americans seem to is on notice that the Bush Administration is committed to meddling in their choices of political leaders.

A lot of people across the continent -- a continent the Bush Administration is also eying for the Free Trade Area of the Americas -- are increasingly incensed that global capitalists in general, and the Bush team in particular, are acting like they don't have the right to choose their own leaders or political policies.

And here comes Brazil, the biggest country of the bunch. Brace yourselves. yourselves.