Dilma's Brazil: Foreign, Economic and Environmental policies

January 1st 2011 Dilma Rouseff takes over as Brazil's next president. What will Dilma's Brazil be like?

The overall picture is clear: Brazil will look pretty much the same as under President Lula. Dilma's main argument in the campaign has been that she will continue Lula’s big project: Economic growth combined with massive social programs for redistribution of wealth. 

But there will be some differences. Let's have a quick look at foreign policy, economic policy and the environment.

Foreign policy

Foreign policy has been a nearly absent issue in this year’s elections, but no big policy changes are to be expected with Dilma as president. However, I predict change from a quite “presidential led” foreign policy, as we saw under Lula, to a more “diplomatic” foreign policy by the competent Brazilian Ministry of Foreign Affairs, Itamaraty. Dilma will focus on internal Brazilian issues.

Brazil will continue to play an active role in multinational institutions, arguing for reform, more democracy and legitimacy. It will continue to engage in international conflicts, as Iran/uranium and Honduras /coup, but maybe in a less "expresssive" way . As always, the dream is a permanent seat in a reformed UN security council. 

Bilaterally, Brazil will continue giving more emphasis to South and Latin America, countries in the South (especially emerging powers as China, India, South Africa and the portuguese speaking countries Angola and Mozambique), at the expense of USA and Europe.

Economic policy

In Brazil, there is a political consensus on the basic economic policy. All main candidates in this years’ elections stated their support to the so-called “economic tripod”: 1) budget surplus, 2) floating currency, and 3) low inflation targets. This model was introduced in Brazil with the plano real in 1995, and was the key to achieve economic stability.

There has been no signal from Dilma on changes in the economic policy in the short term. (There have been no signals on change from Lula whatsoever…) But she might try to engage in a huge tax reform that has been waiting for decades. During the last 16 years, neither former president Cardoso nor Lula judged it possible to succeed with the tax reform. Will Dilma try? Probably not.

Emphasis wil be given to building infrastucture and energy. Roads, waterways, pipelines, electrical transmission lines, hydro power in the Amazon. The idea is to build the fundament further economic growth to fulfill the dream of lifting all Brazilians out of poverty. The successful Bolsa Familia program, that allowed for cash transfer to poor people, will contunue, and most likely be extended.

Environmental policy

In September, The Economist described Dilma like this: “Brazil is due to hold a presidential poll next month and the front-runner, Dilma Rousseff, has a record of favouring destructive infrastructure projects in the Amazon.”

Dilma is former Minister of Energy and Mining, president of the board of Petrobrás and has been in charge of the Program for Accelerated Growth (PAC) investing billions of dollars in gigantic infrastructure and energy projects that are threats to the environment. Environmental policy under Dilma? Two scenarios, one positive and one negative:

Negative: Dilma will continue to consider the environment “an obstacle to development” as she said during the Copenhagen climate summit. The quote was not a slip of the tongue, but what she really thinks. She will intensify the mega projects in the Amazon. Signs of this are the emphasis on PAC and most of her political program.

Positive: She will become a more consensus oriented politician, as Lula. She will be convinced by some of the arguments from the environmental side and continue Brazil’s positive trend of curbing deforestation. Signs: Her answers to Marina Silva and the environmental movement’s challenges during the election campaigns.