The World-System: The Era of Lula

In 2002, Brazil elected its first ever candidate from a leftist party, Luiz Inácio da Silva. Nicknamed Lula, the leader of the "Party of the Workers" was installed amid a perilous economic climate. With high interest rates and potentially explosive debt, investors expressed their concern by trading Brazilian currency for US dollars and withdrawing financial resources. However, Lula has since restored foreign investor confidence, negotiated with the IMF, reduced government pensions, and promised agrarian reform, posing the question of whether a leftist government can withstand the forces of neo-liberalism. Nonetheless, Lula's critics have applauded his foreign policy measures. Wallerstein argues that Lula's best chance to return to his Party's origins will be to strengthen the South American free trade bloc Mercosur. This, and Lula's ability to maneuver against Bush's calls for a Free Trade Agreement of the Americas, will define the first term of his presidency. -YaleGlobal