Campaigning for his third time period as president in 2022, Lula da Silva ran on an easy message: making Brazil “comfortable once more”. Now, midway by means of his third time period, macroeconomic indicators paint a reasonably rosy image of the nation’s trajectory beneath his administration: GDP progress exceeded expectations, and the unemployment fee fell to historic ranges. On the worldwide stage, the president is widely known as a number one voice in opposition to the authoritarianism and neo-imperialist aspirations of Donald Trump. But at dwelling, Lula’s recognition is declining.
As Lula 3.0’s second half unfolds, limitations within the Employees’ Get together mannequin persist. After recovering from a coup try on 8 January 2023, lower than per week earlier than the inauguration, the brand new authorities swiftly restored or enhanced a number of the Employees’ Get together’s flagship social packages that had been weakened beneath Jair Bolsonaro, comparable to Bolsa Família (money transfers to poor households), Minha Casa Minha Vida (building and financing of reasonably priced housing items), and Mais Médicos (provision of physicians in weak areas). Nevertheless, the primary months of the administration, again in 2023, confirmed that the varied packages’ longevity could be contingent on increasing their funding supply: state income.
Lula guess on a Keynesian components that sought to spice up demand by means of elevated state intervention and funding – a key characteristic of his earlier administrations. In August 2023, the federal government set in movement a brand new iteration of the Programa de Aceleração do Crescimento (Progress Acceleration Program), geared toward giant infrastructure tasks in a number of areas, together with transportation, inexperienced vitality and digital transition. In January 2024, a brand new industrial coverage was launched to foster technological innovation and strengthen home industries. Nevertheless, whereas funding charges grew an important deal from 2023 to 2024, on the present 17.6 p.c, they’re nonetheless significantly down from the typical 20 p.c achieved from 2008 to 2013, throughout Lula’s second presidency and the primary Rousseff years. With out the enlargement of such charges and, therefore, the assure of long-term progress and better income, Lula and the broader Employees’ Get together undertaking is compromised.
One can argue that adjustments within the worldwide situation, notably post-pandemic blended traits in commodity costs, constrain what Lula 3.0 can ship. Nevertheless, the federal government’s personal fiscal strategy ought to be thought-about the principle hindrance. The Novo Arcabouço Fiscal (New Fiscal Framework), championed by Minister of Finance Fernando Haddad, presents itself as a extra versatile different to inflexible fiscal targets however in the end reinforces a restrictive logic that prioritizes debt management over social funding. By tying spending to financial efficiency and capping expenditures even in intervals of prosperity, the framework limits the federal government’s potential to answer urgent social wants, put money into long-term transformations, and tackle structural points that perpetuate inequality. The federal government, and the minister specifically, justifies these decisions as pragmatism, disguising an austerity rationale as fiscal duty.
Foto: Ricardo Stuckert / Lula Official. Supply: Wikimedia Commons
The Employees’ Get together by no means sidelined considerations with balanced budgets in earlier administrations, however Lula 3.0 has escalated this precedence, as attested by the set of measures to “improve fiscal duty” accredited on the finish of 2024. Key parts embody cuts to schooling funds and a cap on above-inflation raises to the minimal wage. The latter influences different expenditures, together with unemployment and social safety advantages, together with stricter eligibility standards for social packages, comparable to incapacity advantages and Bolsa Família. The progressive social funding measures the federal government has introduced – comparable to tax exemptions for people incomes as much as 5,000 reais per 30 days and a super-rich tax, geared toward unique and off-shore funding funds – pale when put next with the federal government’s defence of fiscal conservatism.
The battle between concentrating on inequality by means of public spending and following the dictates of the market leaves Lula 3.0 with no possibility however to additional guess on agribusiness and mining with the intention to generate much-needed revenues and stop critical financial destabilization within the close to future. Take, as an example, the latest proposal to discover oil and gasoline deposits close to the mouth of the Amazon River by Petrobras, the nationwide petroleum firm, a prospect criticized by the federal government’s personal federal environmental company.
With out progressive structural transformation, Lula 3.0 won’t be able to maneuver the Brazilian financial system away from neo-extractivism, as left-wing critics of earlier Employees’ Get together administrations have identified. And in addition to producing contradictions from an environmental perspective, a degree strongly highlighted by Indigenous activists in Brazil, the neo-extractive lure reinforces the dependent nature of the Brazilian financial system – its continued reliance on exporting uncooked supplies and low-value items to wealthier international locations, quite than growing a diversified industrial base – and leaves little leverage to push again in opposition to the brand new Trump administration.
*
Lula’s third presidency also needs to be assessed when it comes to the institutional leverage the proper wing at present holds. Brazil’s multiparty political system has all the time required the making of alliances to construct majorities in each the Home and the Senate, pushing the coalition in energy into negotiations throughout the political spectrum. Those that sided with Lula within the newest run knew his new presidency would face challenges within the parliament because of the election of a extra sizable far right-wing cohort to Congress, which might compel the president to succeed in out past the coalition that led to his victory, towards centre-to-right and historically right-wing forces that had merged with bolsonarismo. At the start of his third time period, Lula granted a few of Bolsonaro’s outdated allies cupboard seats in alternate for assist for the federal government’s proposals and conceded to right-wing forces in public security and the army. For instance, Lula assigned José Múcio, a favourite among the many armed forces, the place of Minister of Defence.
Nevertheless, Bolsonaro-era adjustments to the administration of the federal funds, which allowed lawmakers to allocate parts of presidency funds at their discretion, have disrupted the steadiness between government and legislative energy. Regardless of Brazil’s supreme courtroom having dominated Bolsonaro’s slush fund unlawful, lawmakers are not depending on the administration for entry to authorities spoils and have little incentive to cooperate with it. The broad right-wing bloc has exploited this dynamic to exert stress from each instructions – demanding deeper austerity measures whereas concurrently blaming the administration for the hurt these very insurance policies could inflict on the nation.
The explanation the harm isn’t larger for Lula 3.0 is as a result of the proper wing is at present in dysfunction. Bolsonaro stays the central reference for the conservative mass motion consolidated together with his election in 2018, however the demonstrations in his assist are shrinking and his authorized troubles have significantly worsened, since he’s now indicted on the January 8 prices by the Supreme Courtroom; the potential of arrest following a trial within the fall is actual. On the identical time, no different right-wing persona has been in a position to declare themselves because the inheritor of bolsonarismo but. A number of names, comparable to Bolsonaro’s spouse Michelle, the São Paulo governor Tarcísio de Freitas, and Minas Gerais, the governor Romeu Zema, have been floated as alternate options. The long run is unclear.
Such dynamics marked the nationwide municipal elections that unfolded in October and November final yr. The Proper gained 78 p.c of the disputed seats (or roughly 4,300 municipalities) in a single spherical; the Left was overwhelmed in a lot of the 52 main cities the place its candidates competed within the second spherical, beneath the runoff format, and its mayoralties fell from 863 to 752 for the reason that earlier elections, in 2020. Certainly, most second-round runoffs pitted centre-right to far-right views in opposition to each other, successfully excluding a progressive dialog altogether.
The case of São Paulo – the nation’s largest metropolis – is especially noteworthy. After a powerful exhibiting in 2020, housing motion chief and Lula-endorsed candidate Guilherme Boulos was well-positioned to problem conservative incumbent mayor Ricardo Nunes. Nevertheless, an surprising third contender, web celeb coach Pablo Marçal, got here only a few thousand votes near advancing to the second spherical. Operating an aggressive marketing campaign in opposition to the “institution”, Marçal was in a position to (re)energize a broad working-class and middle-class base in opposition to “wokeness” and for a pro-market agenda. His efficiency is a testomony to the vitality of the far proper and its present capability to provoke folks and form the controversy within the nation. Boulos couldn’t match the combative strategy Marçal delivered to the dispute and will acquire no additional floor for the Left. In the meantime, Marçal’s failure to advance to the second spherical and Nunes’s wrestle to unify the proper from the onset replicate divisions nonetheless to be bridged by conservatives within the months to return.
Regardless of these fractures, the Proper’s narrative capability stays robust, because of the net militia consolidated within the years of Bolsonaro’s administration. Lula 3.0 has confronted a decentralized but extremely coordinated effort to unfold misinformation and foster conservative and market-friendly values within the nation. When the state of Rio Grande do Sul was destroyed by means of report rainfall and flooding in 2024, rumors that the federal government was unable to answer the catastrophe and had even deserted the inhabitants flooded social media and WhatsApp and Telegram channels, swaying anxieties concerning the tragedy towards anti-state sentiment. In early 2025, the federal government revoked a call to watch a real-time fee system that enables on the spot transfers between financial institution accounts, following right-wing on-line allegations that the choice was meant to additional tax working folks, notably these within the gig and repair industries.
This on-line militia not solely spreads misinformation but in addition serves as an ideological incubator, systematically nurturing radicalization by means of a continuing stream of memes, edited movies, and broadcasts framing authoritarian actions as righteous resistance. When Brazilian authorities arrested a number of members of an elite military unit in November 2024 for 2022 plot to assassinate then-president-elect Lula, his decide for vp, Geraldo Alckmin, and Justice Alexandre de Moraes, whose choices have hindered the bolsonarista motion, a web based echo chamber amplified conspiratorial narratives, justified political violence, and forged the perpetrators as patriots resisting a corrupt and illegitimate regime. Following the January 8 riot, these identical digital platforms shortly shifted gears to attract decontextualized comparisons with left-wing demonstrations, downplaying the gravity of the assault on democracy.
*
On this context, Lula’s declining recognition ought to come as no shock. Approval rankings have dropped throughout all areas, and whereas Lula 3.0 has managed to stabilize the financial system and restore some key social packages, these positive factors stay fragile beneath the load of fiscal conservatism, an uncooperative legislature, and a political atmosphere saturated by disinformation. The appropriate-wing opposition has maintained its grip on the general public creativeness by means of a potent mixture of narrative warfare and institutional leverage. In the meantime, Eduardo Bolsonaro, now residing within the US, works to develop transnational alliances able to making use of exterior stress on Brazil’s political area, outsourcing the harassment of political opponents to worldwide companions.
Lula’s third time period is formed by a profound incongruity: whereas the Left holds the manager, it governs from a defensive place, making repeated concessions to market and conservative forces in hopes of sustaining governance. The price of this technique is excessive: It demobilizes the favored front-style alliance that introduced Lula to the presidency for the third time, erodes the administration’s transformative capability, and leaves the broader Left weak to the Proper’s relentless ideological advance. For liberals and progressives worldwide, Lula’s predicament provides a lesson. Ceding floor to the proper wing doesn’t guarantee stability and should speed up backsliding. The problem is to withstand the false safety of moderation.
If Lula 3.0 is to depart a legacy past mere harm management, it would require a political recalibration – one which reclaims the initiative, reinvests in common group, and confronts head-on the structural constraints that at present dictate the phrases of progressive governance in Brazil. With out such a shift, the administration dangers changing into a tragic case examine within the limits of left-wing energy beneath right-wing hegemony.
