Since the immediate post–World War II era, the International Monetary Fund (IMF) has played a leading role in the political, economic, and social lives of Latin Americans. Its role has evolved from the Bretton Woods era of the postwar period, through the era of the Washington Consensus, and into the post-2008 crisis period. However, throughout those times the institution served as the enforcement instrument for orthodox economic policies within the liberal international order. It conditioned emergency lending to countries in economic distress on the implementation of austere economic policies.
The region’s workers consistently bore the costs of the IMF’s prescribed policies. Such policies resulted in fewer public-sector jobs, reductions in welfare state benefits, and increased levels of foreign involvement in national economies. Consequently, the IMF became the subject of frequent labor protests. Workers understood the key role the IMF played in devising the policies that caused them pain and often took steps to resist.
Although the IMF’s effects on the working class are well understood within Latin America, it has not been the subject of sustained historical analysis. To understand the dynamics of the region’s political economy, historians should focus on the IMF to a degree similar to that of economists and political scientists. More specifically, the relationship between the IMF and Latin American workers is ripe for sustained analysis across disciplinary boundaries.
Luiz Inácio Lula da Silva (b. Caetés, Pernambuco, Brazil, October 27, 1945) was born in severe poverty in the Brazilian northeast. “Lula” was a nickname which he legalized as an adult so that it could be listed on election ballots. He is universally referred to as Lula in Brazil. When he was seven years old his mother took the family on the back of a truck to the state of São Paulo in the hope of joining Lula’s father, who had abandoned the family. With her help, and without Lula’s illiterate and abusive father’s encouragement, he went to school to become a lathe mechanic. He then became a union activist and a leader of massive strikes in the industrial suburbs of São Paulo during the last years of Brazil’s military regime.
In 1980, Lula joined with progressive union leaders, activists, and intellectuals in organizing the Partido dos Trabalhadores (PT), or Workers’ Party. The PT was distinguished by its internal democracy and intellectual openness, and many on the left, in Brazil and elsewhere, believed it had great potential for reconciling socialist economics with political democracy. It initiated participatory budgeting practices in an effort to go beyond formal electoral democracy. Lula da Silva’s charisma made him the Party’s most popular leader. Lula won a seat in Congress in 1986, then was defeated in presidential campaigns in 1989, 1994, and 1998. In 2002, he adopted a more moderate campaign platform and was elected president of Brazil. He was re-elected in 2006 and passed the presidency on to his chief of staff, Dilma Rousseff, at the end of his second term.
As president of Brazil, Lula followed moderate economic and social policies, building on the accomplishments of his predecessor rather than making the radical changes many Workers’ Party activists and supporters wanted. The economy grew during his presidency, and he was able to increase funding for income redistribution programs that helped the poorest Brazilians. His administration was tarnished, however, by a massive corruption scandal involving illegal payments to members of Congress. Brazil went into a recession after Dilma Rousseff’s re-election in 2014, and there was an even larger corruption scandal involving the national oil company. Rousseff was impeached in 2016, and the Workers’ Party lost control of the Brazilian government and fared badly in municipal elections. Lula da Silva was convicted on corruption charges. If his conviction is not reversed on appeal, or if he is convicted on other pending indictments, he will not be allowed to compete for the presidency in the 2018 elections.