Opinion – Rodrigo Zeidan: Who is afraid of Lula in power?

That the PT mismanaged the Brazilian economy is beyond dispute. That corruption seems to run rampant, either. Still, is it to be afraid of a new Lula government? Compared to the re-election of the current president, the answer is no. And with conviction.

The so-called “market” has already calmed down with the former president’s leadership in the polls (one day we will stop using ill-defined terms, such as market, neoliberalism and others, but until then, let’s continue). With each absurd policy of the superministry of the economy, investors convince themselves that it cannot get any worse.

Obviously, Lula’s return carries risks. Many of his economists are stuck in the 70s, with retrograde ideas that, in the end, only serve to transfer income from the poor to the rich (there is an entrepreneur grant). But what about the risk of corruption? This one, counterintuitively, is less of a concern.

Corruption is a dynamic game, which requires continuous adaptations by public and private agents. It also requires obfuscation; actions that are hidden or so complicated that it is impossible to track them. The only benefit of political polarization is that it makes it very difficult for members of the third Lula government to mount robust corruption schemes. Every bureaucrat who supports the current government will go through the government’s decisions with a fine-tooth comb. In addition, the media and civil society will also have much greater incentives to inspect the Planalto. “Fool me once, shame on you; fool me twice, shame on me”, as the Americans say (if you fool me once, it’s your fault, if you fool me twice, it’s my fault).

We know that Lula can make a fiscally responsible government. Of the four PT administrations, the first was excellent, combining reforms, the best Brazilian social policy in history, Bolsa Família, and macroeconomic stability. PT megalomania began in the second Lula government. But such a lack of control would be practically impossible, since the superminister of the economy will deliver the economy destroyed and public accounts in tatters.

Does this mean a risk-free PT government? Obviously not. Brazilian politicians are immensely creative in seeking new methods of transferring public resources into private pockets; will we see national champions, the rematch? But the institutional destruction caused by this government is likely to be reversed — such as the dismantling of environmental enforcement agencies; serious policies to mitigate the damages of the pandemic, instead of crude denialism, and more the normalization of international relations; today Brazil is a global pariah. These would already be reasons to feel relieved.

To further mitigate risks, we would need a detailed government plan, with concrete proposals. But in Brazil, it is normal for government plans to have no substance. This is unthinkable in the rest of the world, for better or worse; the referendum on Brexit took place because it was David Cameron’s campaign proposal. He ended up resigning, as he defended the United Kingdom’s permanence in the European Union. It would have been much easier to ignore the promise and never put the referendum on the table, but that is unacceptable in mature democracies.

Lula, will your government plan come full of banalities or is it just the pursuit of power for power’s sake? Does the PT plan to continue with the policies of the 1970s, or is it going to take a leap of ideas? We appreciate not receiving empty answers to questions that really matter.