On October 27, 2002, Luis Inacio "Lula" da Silva, a former Steelworker and Union leader, was elected with close to 62% of the popular vote as the new President of Brazil. This was the fourth consecutive time in which Lula, the candidate of the Workers Party, funded in 1980, had run for President. Three times before (1989, 1994, 1998) he was defeated in the second round of the presidential elections by a coalition of all the right wing political and economical forces. This time was different. Lula won the presidency and in his path to electoral victory he was accompanied by some of the former adversaries and potential enemies. As such, the electoral victory of Lula is not a clear political victory for the Brazilian people, but it is, nevertheless an electoral defeat for the neo-liberal policies and its supporters in Brazil.

Brazil’s economy, as it is the case with all capitalist economies in Latin America, is characterized by huge socio-economic inequalities and by structural contradictions which has been exacerbated during the last years of reigning neo-liberalism.

The electoral victory of Lula and the "left" is a response of the Brazilian people towards the failure of the neo-liberal policies in Brazil, but not a sure sign of their defeat.

Brazil is the 9th largest world economy, the 5th most populated country and is going through its deepest economic crisis since the 1930s. Brazil’s distribution of income and land is the worst on the planet. The rate of unemployment and underemployment is about 50% and the income per capita has decreased by 5 times in the last 5 years.

The ongoing president, the "social-democrat" Cardozo, privatized the most profitable crown corporations and state owned banks. During Cardozo’s years of neo-liberal policies (1995-2002) the Gross National Product per capita grew 1% and decreased from $705 billion (US) in 1995 to $504.8 billion (US) in 2001. The external debt increased from $148 billion (US) to about $ 250 billion (US) during the same time. In 1995 20.3% of the taxes collected by the state were spent on education; in 2002 only 8.9% has been spent on education. In 1995 the government spent 24.9% of its income servicing the debt; during the year 2000, 55.1% was spent servicing the debt.

During the current year Brazil has spent $30 billion (US) paying the debt; another $20 billion (US) were siphoned out of the country. Interest rates stand at about 20%. In short, the neo-liberal economy of Brazil is close to a complete collapse.

Lula’s victory on the one hand is not a happy event for the White House. The government in Washington knows that the vast majority of Lula’s supporters are part of a growing opposition in Latin America against the neo-liberal globalization. Lula’s victory is also part of a trend that includes the government of Hugo Chavez in Venezuela, the electoral victory of Lucio Gutierrez in Ecuador (with 55% of the popular vote), the electoral defeat of the Peruvian government during the municipals elections two weeks ago, the election of a large number of legislators and the surprise showing of Morales in the Bolivian elections a few months ago, together with the possibility of an electoral victory of the left in Uruguay in the upcoming elections. In spite of the differences among these Latin American movements and regardless of their ideological purity, there is no doubt that they represent broad social movements which have as a common trend their opposition towards the so called Washington consensus.

The fear of the White House, obviously, is not directed towards the leaders of these movements, but is a recognition that these movements are clustering the "old" and the "new" left. This includes very diverse and numerous popular sectors: unions, unemployed and underemployed workers, indigenous peoples, gays, feminists, environmentalists, priests, impoverished white collar workers and even some members of the armed forces.

On the other hand, the direction that Lula’s government will follow is not clear. This time Lula’s choice of Vice-President is a senator from the Liberal Party, who owns several textile factories and is closely related to the evangelical churches, which in 1989 were among the most ardent detractors of Lula. Further, as the polls were released, prior to election day, hundreds of "entrepreneurs" either supported Lula or at least indicated, their willingness to work with him and his government. As an ironic twist, the first organization to congratulate Lula on his victory was the Association of National Bankers.

However, the largest social organization in Brazil, the Movement of Peasants Without Land (MST) as well as the Central Union of Workers were among the most fervent of Lula’s supporters.

How will Lula’s government "serve" the contradictory interests represented by his Vice-President and those represented by the Central Union of Workers and the MST?

How would Lula’s government be able to spent over 50% of the government income in servicing the debt and at the same time will increase expenditures in education and health?

How would Lula’s government be able to expropriate and distribute millions of hectares of land to poor peasants and at the same time give guarantees to the IMF and the World Bank that it would respect private property?

How can Lula’s government give guarantees to his partners of the Liberal Party and to sectors of the "ownership class" while at the same time assuring that the Brazilian working class would not see its income diminished again?

The answers to these questions depends upon whether October 27, 2002 would be remembered by the Brazilian people as a day in which they obtain a political victory or merely an electoral victory. However, what it is certain is that the shift towards the left in Brazil, as well as in other parts of the American continent, is opening a new political reality. It appears that large sectors of the working class and the poor are not willing to be governed as in the past, while at the same time, it also appears that the governing classes can no longer govern as in the past. The question, that of course remains to be answered is whether or not out of this conflict a new political leadership will emerge, one that will make the slogan "A new world is possible" a reality.