Alvaro Vargas Llosa on Lula's Troubles

Alvaro Vargas Llosa explains Lula's problems, why they happened and what it all means:

Lula's capacity to reinvent the left always hinged on something more than keeping interest rates high to stem inflation, maintaining a strong currency, riding on the high prices of certain commodities, and giving cash to poor families. He could either opt for simply managing the perpetual crisis or he could try to overhaul a labyrinthine political system that benefited certain pockets of industrial and agricultural production but keeps millions of people out of the realm of opportunity. He chose the former path.

While technocrats talk about a three percent rate of economic growth for Brazil this year and an export boom that has translated into a trade “surplus” of $40 billion, Lula’s voters are indignant at the corruption scandal. But the real point is that corruption has developed naturally in an environment of limited opportunities due to asphyxiating government interference. And the absence of adequate limits on the power of the political bureaucracy is in turn an incentive for corruption at the top level. The corruption of Lula’s government, therefore, should be seen more as a symptom than a cause. Ranting about corruption without removing the causes will only generate further frustration. Brazilians impeached President Collor de Mello in the 1990s but failed to change a system that ensured a party like Lula’s would fall into the same trap years later.

Brazil has often been a bellwether of Latin American political currents. It exemplified French-style authoritarian positivism in the early 20th century, centrally planned industrialization in the 1960s and 1970s, and democracy in the 1980s. (It was not, however, one of the leading nations in the so-called free market reform wave of the 1990s). Lula’s demise is now strengthening the more radical left, which has been quick to blame what is happening on the President’s “betrayal” of his Marxist origins. The rest of the Latin American left is watching.