On Lula's Victory
On October 25th, Luiz Inácio Lula da Silva was re-elected for a historic fourth term as Brazil's President, defeating the far-right candidate Flávio Bolsonaro in a run-off. The stakes of the election were immense on multiple fronts: the fight against the rise of the far right; the devastation of the Amazon rainforest, which accelerated under Bolsonaro Sr. during his Presidential term; and the shape of climate and industrial policy for one of the world's largest economies.
At the same time, the complexities of Brazil's political economy, coupled with the most right-wing Congress in the country's democratic history, confont Lula with difficult choices when it comes to stewarding the country's vast natural resources and pushing back against major power imabalances in the global economy. To understand these currents, we put some questions to development economist Isabel Estevez.
John Merrick: Lula pitched himself as a climate candidate, and he’s now won a fourth term. Many in the climate world, as well as on the international left, will be breathing a sigh of relief. Flávio Bolsonaro had signalled his intention to surrender to US interests on rare earths and agribusiness, and his father’s last term had disastrous effects on the Amazon.
What does this result mean for the climate and for deforestation in the Amazon, and are there limits on what Lula can deliver?
Isabel Estevez: Lula's victory has really been the sigh of relief heard round the world—not only because of what it means for the climate or the Amazon, but because of what it means for the global rise of fascism and authoritarianism.
Lula has been a bulwark against the fascist tide. He's one of very few global leaders that have dared to defend the dignity of their people and their country in the face of constant bullying from Trump and the violence and cruelty that he and his broader movement represent. Losing Lula would have been a devastating blow to the global fight against the rise of the far-right forces that have been gaining momentum not only across Latin America, but also in places like Germany and France.
The incredible way in which the Brazilian people mobilized to secure Lula’s victory—and hopefully turn the fascist tide around—should be a lesson to us all on what we can achieve even when all the most powerful forces in the world are against us, from the tech oligarchy to the agribusiness oligarchy to the apparatus behind the “Donroe Doctrine”.[1]
Those forces are, incidentally, the same forces that have been driving ecological devastation in Brazil. Agribusiness has continued to press for expansion of the agricultural frontier, which fuels deforestation—not to secure food sovereignty for Brazilians but to sell more commodities into global markets. The US, Europe and China have been competing to secure access to Brazil’s minerals as part of their mineral supply chain and stockpiling strategies. A Bolsonaro victory would have meant bowing to these pressures and reversing the hard-won progress that the Lula administration had made in slowing the deforestation that accelerated under Jaír Bolsonaro.
But whether Lula can achieve ambitious goals like the zero illegal deforestation by 2030 target will depend on how much he's able to rein in and defy the actors that are invested in the status quo, and which unfortunately also dominate this Congress.
JM: Lula has backed new oil development, including exploration near the mouth of the Amazon River, while presenting Brazil as a climate leader. There’s a chance he could still work with Trump on mineral extraction as well. Can he do both?
IE: This victory offers Lula a chance to go down in history as a global hero on climate—if he manages to turn the mass mobilization we’ve seen in the past weeks into a lasting movement that can take on entrenched oligarchic interests at home and abroad. Without that support and pressure from a mass movement, it’s hard to see how he will be able to take on the actors upholding the status quo or pursue more ambitious policies than he has so far.
There are some reasons to be hopeful: young people, young organizers, played a critical role in delivering this victory, so their weight in Brazilian politics has been strengthened dramatically over the past weeks. Maybe we’ll see some of the issues they care about, like securing a livable environment, rise nearer the top of the agenda. Maybe they can also continue to operate as an effective counterweight to oligarchic interests in the media space.
That said, oil exploration and mining can’t be viewed purely through the climate lens. They also have to be viewed through a development lens.
The Brazilian people have the right to decide how to use their natural resources, and their first priority has to be securing access to essential needs for their people to flourish: access to things like food, housing, and healthcare. Those essentials cost money, and the government has to figure out how Brazil can afford them and guarantee universal access, whether it’s through public provisioning or by ensuring that people earn enough money to procure those essentials individually by earning a dignified living.
Right now oil, minerals, and agricultural products like soy and beef are major sources of the foreign exchange Brazil uses to afford those essentials, many of which are imported. As long as those dependencies exist, Lula or any other leader will have to strike deals with foreign leaders, beyond just the US. That’s why industrial policy is so important: to reduce those import dependencies, reorienting Brazil's material economy toward meeting the essential needs of its people more directly, rather than selling commodities to global markets in order to procure imports it could be producing domestically.
Brazil's copper, for example (it has some of the largest estimated reserves in the world), could go directly into the US's mineral stockpile and AI data centers. Or, with less dependency, it could go into securing Brazilian electrification and affordable clean energy while creating secure work domestically.
To do the latter, Brazil needs to rebuild and expand on the industrial capabilities it lost during the neoliberal period—not just in mining, but across multiple critical industries. That doesn't happen overnight, or easily. It requires very proactive and sustained planning along the lines of what China has implemented over the past few decades. The global North is, it seems, finally starting to learn lessons about policy ambition from China as it revamps its own industrial strategy. Brazil will need to do the same.
Adrienne Buller
JM: Despite winning the presidency, Lula will have to contend with a Congress described as “the most right wing in the country’s democratic era”. What are his options for overcoming these forces? What should we watch for in the first 100 days?
IE: With a Congress dominated by the right, executive action will become extremely important. There’s a lot that can be done with executive action, especially when it delivers rapid and tangible benefits to people in a way that builds momentum for ambition going forward.
Tools like pooled public procurement[2], for example, can deliver very quick results when it comes to something like localizing the production of green technologies, and in doing so reducing reliance on imports. This strategy aggregates public demand and turns money that the government is already spending into a kind of strategic investment. Using these tools could be really effective in creating good jobs and in starting to tackle some of the challenges surrounding affordability, while also delivering concrete outcomes on climate.
The challenge is that ambitious policies like transformative procurement or strong conditions on foreign direct investment (FDI) that require, for example, technology transfer, the use of local content, and high environmental standards, only work when there is active and constant support from the highest levels of government. Brazil has already shown leadership on issues like sustainable procurement at the international level and in its domestic strategy, but implementing an ambitious policy at scale would likely require prioritization from Lula himself and, once again, a willingness to challenge powerful vested interests.
Another line of action that would be extremely effective in tackling the issues Brazilians care about is finally delivering on regional collaboration on green industrial development. This approach would enable them to pool economic power and address some of the global power asymmetries that stand in the way of meaningful change. Europe is already pursuing collaborative green industrial policies through mechanisms like buyers’ clubs and joint industrial investments. Latin America has been discussing similar ideas for a very long time but has failed to deliver time and again. Lula could make history by delivering a piece of this agenda.
All of that said, the best thing Lula could do as he defines his agenda for the first 100 days is follow the lesson he himself named in his victory speech: listen to his people.
- Referring to the original Monroe Doctrine, the Donroe Doctrine describes a modern evolution of US foreign policy focused on asserting US dominance and unilateral control over the Western Hemisphere.
- Pooled public procurement describes a collaborative arrangement in which multiple governments, public agencies or public institutions like hospitals combine their purchasing needs, financial resources, and bargaining power into a single entity or joint tender, with the aim of achieving more betters results such as lower costs, secure quality of supply and administrative efficiency.
Isabel Estevez is a development economist focused on green industrial policy, and Co-Executive Director of i3T, an international sustainable development think tank.