Brazilian Election: What Does South American Giant Want in Post-Lula Era?

09/11/2010 02:32 pm ET | Updated May 25, 2011

In a scene from my first book, Hugo Chávez: Oil, Politics and the Challenge to the U.S. (Palgrave-Macmillan, 2006), I discuss how Brazil became an ally of Venezuela during a key moment of heightened political tensions. It was December, 2002 and Venezuelan President Hugo Chávez was facing down an economically damaging lock-out of the oil sector launched by the right wing political opposition.

As a result of the lock-out, Venezuela was obliged to import gasoline for domestic use. Chávez, who at the time was locked in a bitter political struggle with the Bush White House in Washington, desperately needed allies. Fortunately, just across the border Venezuela found an important diplomatic supporter in Brazil. In a clear sign that the South American giant was in no mood to cooperate with U.S. efforts designed to isolate Venezuela, Brazil shipped half a million barrels of oil to the Chávez government.

Luiz Inácio "Lula" da Silva of the Workers' Party had just won the Brazilian presidential election two months earlier, defeating conservative challenger José Serra. Though he had not yet officially taken office, Lula was reportedly involved in the sensitive decision to ship oil to Venezuela. In moving to help Chávez, Lula had his own political concerns: if the Venezuelan was overthrown, Lula said privately, "tomorrow" it would be his turn and this could give rise to a domino-like effect throughout the region.

Eight years later, Brazil is nearing the end of charismatic Lula's second term in office and must decide whether it wants to continue to pursue a more independent foreign policy which could ultimately risk Washington's ire. While the two leading candidates vying to succeed Lula in Brazil's October 3rd presidential election do not differ substantially on domestic issues, they have staked out very different positions when it comes to the country's role on the world stage.

Serra, Lula's erstwhile challenger in 2002, is now back again. As candidate of the opposition Brazilian Social Democracy Party or PSDB, he would prioritize relations with the United States and Europe while having little patience for the likes of Chávez or the Castro brothers in Cuba. Workers' Party candidate and former Minister of Energy Dilma Rousseff meanwhile would maintain friendly ties with the U.S. but continue Lula's warm embrace of Venezuela. The election, therefore, has real geopolitical consequences for South America's so-called "Pink Tide," which in recent years has swept leftist regimes into power.

In an inflammatory move, the PSDB candidate has accused Bolivia of complicity in drug trafficking. Moreover Serra, a former congressman and governor of the heavily industrialized state of São Paulo, laid into Lula for refusing to recognize the new government of Honduras, which was dubiously elected while the coup regime was still in power in Tegucigalpa. In other respects, Serra tows the U.S. line: the Brazilian candidate accuses Venezuela of sheltering FARC insurgents, the main guerilla group fighting the pro-Washington Colombian government in Bogotá.

Perhaps even more seriously, a Serra presidency could derail South American economic and political integration which has taken place along progressive lines. Serra has expressed skepticism about the South American trade bloc Mercosur which groups regional nations into a common market.

As I point out in my last book, Revolution! South America and the Rise of the New Left (Palgrave, 2008), many countries within the group are left-leaning and major energy producers. In recent years Lula has prodded Brazilian state energy company Petrobras to invest in Bolivia and Venezuela so as to enhance regional integration. It might be said, then, that energy has helped to solidify tighter economic ties amongst politically aligned countries within the region.

Mercosur is merely a free trade bloc and hardly constitutes a viable break with market capitalism. However, to the degree that South American countries encourage their own free trade zone, Mercosur promotes independence from the U.S. Currently, Mercosur prohibits member countries from signing separate accords: like the musketeers of yore it's all for one and one for all.

Serra might drive a wrench through such integration plans by taking a tough line in trade disputes with Argentina and Mercosur. Reportedly, the PSDB candidate told a group of Brazilian investors that he was fed up with Mercosur as the bloc represented "an obstacle for Brazil signing its own individual trade agreements."

With an open question mark hanging over Serra's adherence to Mercosur, integrationists may take some comfort that Rousseff is currently surging in voter surveys. According to Datafolha, a leading Brazilian polling organization, the Lula protégé is favored by the public with 49 per cent of the vote compared to just 29 per cent for Serra. If her lead in the polls holds during the election, the Workers' Party candidate could actually win an outright majority of votes on October 3rd, thus invalidating the need for a second runoff on October 31st.

While Rousseff is expected to maintain Brazil's ties to the U.S., embracing Washington adversaries like Chávez could place her relationship with the White House under strain. A former guerrilla who was active during Brazil's 1964-1985 military dictatorship, Rousseff supports Latin American integration and gives top priority to Mercosur. On a regional level, she has remarked, Brazil should "strengthen ties with all our South American neighbors...through solidarity and not imperialism."

What might one expect from a Rousseff administration in terms of South American energy integration? For answers, one need merely look at the record. Up until recently the Workers' Party candidate served as chairwoman of the board for the Brazilian state-run oil company Petrobras which has an important energy profile within the wider region. Even more importantly, as Minister of Energy Rousseff met with her regional counterparts in an effort to form Petrosur, a pan-South American oil company favored by Hugo Chávez. Additionally, she signed important deals to share technical and energy know-how with Venezuela.

In neighboring Bolivia, the leftist government of Evo Morales has pursued a course of energy nationalism in an effort to reclaim sovereignty over the nation's gas sector. Brazil, a voracious energy consumer which must service burgeoning sectors of its economy such as agribusiness, receives significant natural gas from Bolivia where Petrobras operates. Far from balking at Bolivia's new-found resource nationalism, the Lula government and Rousseff have pursued friendly relations with Morales which in turn provides La Paz with important political cover. What is more the future looks bright: in a recent interview with the Bolivian paper La Razón, Rousseff said she would build upon energy ties as president so as to enhance relations with the Morales government.

Beset with its own internal problems and contradictions, Latin America's Pink Tide may not see a vast political advance any time soon. The key question therefore is how the Pink Tide conserves necessary breathing space which will allow it to take stock of its situation. While a Rousseff triumph will not transform the left bloc's fortunes, it will give neighboring countries a necessary respite from Washington and international pressure.

From September 30-October 5 Nikolas Kozloff will be in Brasilia, writing about Brazil's presidential election. He will also sit in on the nation's last presidential debate and interview representatives from the major presidential campaigns. For media inquiries, click here.

Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave, 2008) and No Rain in the Amazon: How South America's Climate Change Affects the Entire Planet (Palgrave, 2010). Visit his website, www.nikolaskozloff.com.