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The wrong leaders for Brazil? The Lula-backed Ms. Rousseff has overtaken rival Jose Serra (VICTOR R. CAIVANO/AP, Reuters)
The wrong leaders for Brazil? The Lula-backed Ms. Rousseff has overtaken rival Jose Serra (VICTOR R. CAIVANO/AP, Reuters)

Alvaro Vargas Llosa

Brazil's developing dilemma Add to ...

A French economist invented the term "Third World" in the 1950s, paraphrasing the "Third Estate," which, under the Old Regime, comprised the bourgeoisie - that is, not the nobles or the clergy. But the meaning changed, and Third World was used to designate non-aligned countries (dutifully aligned against the West) and poor nations. Brazil's great dilemma, as its current presidential campaign demonstrates, is whether to lead the international Third Estate or the Third World.

The Third Estate represented the emerging productive majority of old France. The other two estates were the elites that taxed the people. In Brazil, producers and consumers are increasingly behaving like the original meaning of Third World, becoming a vast middle class that, along with millions of Chinese and Indians, constitutes the best hope for the planet. But the Brazilian political establishment seems stuck in the Third World of hypocritical non-alignment, state capitalism, social engineering and patronage.

Dilma Rousseff, the former guerrilla fighter who previously served as chief of staff to President Luiz Inacio Lula da Silva, has overtaken former Sao Paulo state governor Jose Serra in the run-up to October's presidential election. The problem is not that Ms. Rousseff participated in acts of violence - so did Uruguayan President Jose Mujica, now a grandfatherly head of state. Nor is it a problem that she owes her lead entirely to Mr. da Silva; history is strewn with political heirs who turned on their patrons. The problem is that Ms. Rousseff, like Mr. da Silva, is a Third World leader in a country with a First World economy but a second-rate democracy. The three cannot be out of sync for long.

With the wrong leaders, voters in developing nations can easily embrace Third World politics even when acting like First World producers and consumers. Brazilian voters, who are responsible for an economy that is growing at an annualized rate of 9 per cent and has pulled 30 million people out of poverty since 2003, are also clinging to a Workers' Party that is ideologically bankrupt, ethically tainted and internationally reckless.

Cajoling Iran's Mahmoud Ahmadinejad and Venezuela's Hugo Chavez, seeking a permanent seat on the United Nations Security Council, using its national development bank to buy Latin American influence, capturing federal bureaucratic entities and designing grand power schemes attached to oil have taken precedence, in the political agenda, over the much-needed transformation of the bloated state.

Designing grand power schemes attached to oil is among the illusions of grandeur that have taken precedence over the much-needed transformation of the bloated Brazilian state

Ms. Rousseff was at the helm of the governing board of Petrobras, the state's oil company, when the law that will give it a monopoly of the Santos Basin oil reserves - potentially 14 billion barrels - was drafted. The company, which receives money from the government and supplemental funding through the development bank, still doesn't have the $300-billion needed to exploit the reserves. It's contemplating new debt that, one way or another, will hit taxpayers. Not to mention the technology and expertise that Petrobras, a generally well-run company, lacks for an undertaking that involves oil stuck beneath thick layers of salt deep in the sea, hundreds of miles off the coast.

There are other illusions of state grandeur, some connected to playing host to the 2014 World Cup and the 2016 Olympic Games - such as the $20-billion bullet train that will connect Sao Paulo and Rio de Janeiro.

A common trait of Third World politicians is they believe there are political shortcuts to the First World. A couple of eras in Latin America were marked by such a superstition. It was called "positivism" at the turn of the 20th century. It became " desarrollismo" (literally, developmentalism) in mid-century. The result was sobering.

Brazilian leaders have long had an "anti-American" complex. The obsession makes them do things simply because they seem in opposition to capitalism. Some experts - as an event organized by the Brazil Institute at the Woodrow Wilson Center in Washington suggested - trace this back to when Brazil, which joined the allied effort in the Second World War, felt rejected by the United States at war's end.

Perhaps. But the period in which Brazil was most respected - the beginning of the 20th century - was when it was so confident that it saw no humiliation in embracing the leading West under the vision of the Baron of Rio Branco, Jose Maria da Silva Paranhos. Remembering this might help the protagonists of Brazil's presidential campaign abandon Third World politics in favour of Third Estate leadership.

Alvaro Vargas Llosa is a senior fellow at the Independent Institute in Washington.

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