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A new era in South America

2023-01-13 | Brazil
A new era in South America

The Rite of Lula

The international press presented the COP27 as the real quinceañera party of Lula. Brazil was once again playing between serious and modern imperialisms. Bolsonaro's flight to Florida and the pomp of Lula's presidential oath were presented as an institutional consolation and a catharsis. But the most spectacular show was yet to come.

Hundreds of Bolsonaristas who remained camped in front of the high command of the army in Brasilia, alleged electoral fraud and implored the high command to prevent Lula's inauguration. Counting on the aid of a few buses from the states, they marched and took over the seats of Congress, the Federal Supreme Court (STF) and the presidency of the government, the famous Planalto.

Although it was little more than a festive vandalistic spectacle, it was highly useful for Lula who immediately presented it as a coup attempt, gathered institutional support, and used the opportunity to massively mobilize the State in the name of defending democracy.

In addition, given the image of the Lula government in the US and Europe, the idea of a Bolsonarist insurrection was too reminiscent of the assault on the US Capitol in January 2021 so as not to make the role of Bannon in creating references, slogans, and models for bolsonarism obvious. Such an image is, without a doubt, useful for the current government in the US and Europe.

To shed light on the non-existent resistance of the police and the practically evident military participation, denounced even by politicians close to Bolsonaro, internally gives Lula a free hand to initiate purges of the security forces and perhaps members of the army itself despite agreeing not to before the elections.

The famous insurrection, the supposed fascist coup d'état, was in reality nothing more than a terminal demonstration of impotence by a delusional petty bourgeoisie, increasingly isolated by its own sectarianism and brutishness, but artificially maintained by the financing of a part of the agro-exporting bourgeoisie and its Trumpist alliances. A ridiculous and vandalistic finale to the Bolsonaro years, which Lula perfectly orchestrated for his own rite.

The result: a much more powerful Lula in Planalto - when it is restored - ready to undertake the great restructuring of South American capital that he promised during his campaign.

The prospect of a common South American currency tailored to the needs of Brazil

Manifestación en Sao Paulo tras la algarada bolsonarista en Brasilia

Demonstration in Sao Paulo after the riot of the Bolsonarists in Brasilia.

The change in the regional perspective of Brazil was radical and abrupt. Itamaratí has gone from encouraging the Uruguayan government of Lacalle Pou to dynamite Mercosur to mobilizing the Mercosur countries to take it to court.

Not to mention Argentina. It is no longer just a question of Brazil's access to Argentine gas and oil. After the electoral triumph, Brazil's objectives were made explicit to Buenos Aires: military integration and the formation of a real common market.

Last May, during the campaign, Lula had already raised the slogan: "We cannot depend on the dollar". Especially with the Fed raising rates as if there were no tomorrow. After all, every interest rate hike accelerates capital flight because it makes U.S. debt more attractive, which in turn devalues local currencies and makes imports more expensive.

But in order to have an alternative to the dollar, at least at the regional level, it is necessary to reorder and tie country to country to the Brazilian financial capital bandwagon much like the way that Germany tied the rest of the European continental capitals to the euro. In Lula's words:

We will reestablish our relationship with Latin America. And God willing, we will create a single currency in Latin America.

First step: an account for inter-regional foreign trade that will prevent national banks from having to use reserves to finance imports.

On the horizon, a common, but not single currency, to articulate and give stability to Brazilian foreign trade, regardless of exchange rate storms.

We need to rely on a common currency, not a single one, each one with its own currency, but an umbrella of trade with a common currency. That is the idea we are starting to work on, which Alberto also discussed with Lula a few days ago at his inauguration. The idea is to consolidate it as a project for the whole region.

Sergio Massa, minister of Economy of Argentina

The Argentine press and government are already excitedly talking about SUR, which would be the final phase of this whole movement: a digital currency issued by a fund to which the countries of the region would contribute in proportion to their shares in regional trade.

What is Lula's Brazil playing at strategically?

In the world imperialist scenario that is being consolidated, Europe and the US will play an increasingly restrictive game with regard to South American agro-livestock exports, and Africa becomes increasingly unstable with each passing month. Brazilian capital can only grow on solid foundations by gaining markets and opportunities for placement in its regional environment.

That is why Itamaratí's approach under Lula is essentially no different from that of Bolsonaro four years ago: that is, to reorganize capital and trade flows throughout the continent to consolidate Brazil as the dominant imperialism in the region.

Bolsonaro, linked to agro-exporting interests, however, could not go very far. The regional market cannot develop from the primary export sector. The region can only absorb a small proportion of the immense quantities of soybeans, meat or wheat it produces for international markets.

For this reason, and as befits semicolonial economies, the productive and capital circuits of the countries of the region are mutually autistic. As of today, the difference between internal and external trade is abysmal: trade between Mercosur partners was only $40.591 billion in 2021, while trade between Mercosur and third countries amounted to $598.899 billion.

The South American internal market can only develop on the basis of everything that is not part of the export economy: industry and services, sectors maintained more or less artificially and which are not very competitive in the face of competition from the major powers.

Meanwhile, for every country in the region, any change in Chinese imports will have more impact than any pressure from a neighboring country. Hence, the issue of relations with China and its growing incompatibility with the US being the main topic of regional and trade policy in recent years.

In that sphere Bolsonaro aspired to have Brazil recognized by the US as a sort of delegated empire. Lula does not say it so openly, but he wants to contain Beijing's ambitions in the region -involving all Mercosur governments- enough to allow Brazilian industry to occupy the space disputed by Asian industry in South American countries... renouncing if necessary a part of the growth of agro-livestock exports to China which for Bolsonaro were nevertheless vital to maintain his main supporters in the local bourgeoisie: the large landowners and the agro-export industry.

How does this affect the rest of the countries on the continent?

As we have seen, the government of Argentina, which is suffering the worst inflation in more than three decades is enthusiastic about the prospect of pegging its currency to the Brazilian real. It sees it as one of the few stabilizers in sight and as a lifeline for its industrial sector.

It is more than a lifeline to be used as a last resort, because, at the expense of an increasingly exploited and impoverished working class, the Argentine bourgeoisie is managing to slow down and chronify its fall into the void.

This is not something minor in a scenario in which the crisis of the political apparatus has continued to worsen to the point of becoming an increasingly tempting open flank for foreign imperialisms.... something which is not so opportune at a moment when on the one hand China and the US are competing to sell the fighter planes of the coming decades to Argentina and on the other, the government is embarking on militarizing its presence around the Malvinas, Sea of Sickles and Antarctica caught between China -which wants a shared base from which to control the bioceanic passage- and Great Britain which is increasingly militarizing its presence in Malvinas.

The growing imperialist tensions increasingly threaten to fester the fractures opened by the generalized crisis of the political apparatuses.

In Peru, the Parliament's harassment of President Castillo ended in an attempt by the latter to dissolve the chambers which then led to his deposition and subsequent arrest... which in turn has opened a phase of bloody protests which, despite being harshly repressed since December, when a state of emergency was declared and the streets were handed over to the army, have been revived and are already spreading to 41 provinces representing 20% of the territory.

The international media present the sad fate and impotence of the Castillo Presidency as part of the story of the failure of the populisms. But in reality all this comes from long ago, from the cross between the ghosts of Fujimorism, the incompetence of the Peruvian ruling class and regional inter-imperialist pressures.

Read also: What is happening in Peru?, 16/11/2020

In the Peruvian domestic arena, both the petty bourgeoisie that rose with Fujimorism and the faction of the ruling class linked to financial capital, that looked to Duque's Colombia and Piñera's Chile, feel they have won with the fall of Castillo.

Petro, in declarations to the press, interpreted Castillo's deposition as an expression of a broader threat. According to him, Uribismo, Bolsonarismo and other similar tendencies mobilizing from Chile to Colombia and from Argentina to Ecuador the most right-wing factions of the petty bourgeoisie, were taking the path of not recognizing and eventually reversing the electoral results as a way to remain in or take over the government.

In coherence with this analysis, his government together with AMLO's Mexico, Alberto Fernandez's Argentina and Arce's Bolivia launched a joint communiqué demonstrating their concern without daring to do much more. The text, at the same time, implored the Peruvian institutional figures not to depose Castillo and to guarantee the legal rights of the detained president.

Interesting note: Lula was even more prudent and greeted the new government. Peru has long been considered by Brazil as its natural gateway to the Pacific and both Planalto and Itamaratí want to secure its interests whoever governs.

In other words, Brazil's first interest in this new historical stage is that the regional institutional framework that will be created from now on, unlike the UnaSur created during Lula's first presidency, does not disappear if the factions in political power change in the different countries of the continent.

A new era begins in South America

Puerto de Ushuaia

Port of Ushuaia where China wants to build a joint base with Argentina.

  • Brazil believes that it can take advantage of the exhaustion of the South American ruling classes to initiate a process of regional integration and articulation that guarantees markets and destinations for its companies and capital, that is to say, that serves the realization of its imperialist interests.
  • This process would start with a certain resuscitation of Mercosur, the creation of a common internal currency to stabilize interregional trade, and military coordination structures to take effective control of the South Atlantic, the bioceanic straits and the Amazon, dissuading the US, Great Britain or China from intervening on their own.
  • The structures of this new scaffolding will only be sustainable if they transcend the interests of the different factions in contention in each country, so Brazil's objective only has options if it effectively increases inter-regional trade flows. We are far from that: as befits semi-colonial economies, trade between Mercosur partners was only $40.591 billion in 2021 compared to $598.899 billion in trade between the bloc and abroad.
  • Meanwhile, all Brazilian attempts to create structures to facilitate the development of its capital in the region can only encourage tensions and conflicts between the different factions in each country, divided among other things by their imperialist orientation.
  • In this way, Brazilian imperialism not only opens a new epoch insofar as it constitutes itself as the promoter of a continental market for the first time since the independence of the Iberian empires, but also because both with its advances and its setbacks, this new Brazilian imperialist impulse will inevitably contribute to incorporate, sooner rather than later, the South American continent into the new historical phase of globalization of the imperialist war.