Reshaping Brazil: 2023 and Beyond

The 2022 general election in Brazil marked a historic political swing for the country, with liberal Luiz Inácio Lula da Silva, commonly known as Lula, defeating conservative incumbent Jair Bolsonaro.

“While Lula’s election might signal a desire for change, his administration is set to face a range of institutional challenges,” says Carolina Ramirez, head of BCIU’s Western Hemisphere portfolio. “Its economic policy choices will be under scrutiny. There are concerns he’s overpromised on the campaign trail.”

The win is a political revival for Lula. The former union leader became Brazil’s president in the early 2000s and served two terms, before later being convicted on corruption charges and spending a year and a half in prison. The convictions were thrown out by the Supreme Court last year.

This election marks a series of reversals and upcoming policy changes for Brazil. “This election was a dramatic reversal of fortunes for Lula personally,” says Ramirez, “but also we can expect to see a change in approach to climate change, regional investment, and diplomatic relations.”

Lula faces an increasingly powerful congress, with the conservative power holding a majority, slow economic growth, and rising rates of violence and crime. Ahead, experts from BCIU discusses Brazil’s status quo, current and future policy changes, and what is next for the country on the world stage.

Climate

One of the most notable areas of difference between Brazil’s current and most recent past administrations is climate policy. With the majority of the Amazon Rainforest, the world’s largest intact forest, located within the country, there is a global eye on its environmental choices. According to Brian Dershowitz, Senior Director at BCIU, Lula has indicated that environmentalism will be a focus of his foreign policy.

“Lula is more forward-leaning on climate than his predecessor, going as far to say, ‘Brazil is back’ in regard to climate policy,” Dershowitz says. “Funding has been restored, demonstrating the administration’s commitment to taking a different approach to conservation and climate change.”

Under Bolsonaro, large-scale deforestation in the Amazon Rainforest reached a fifteen-year high. On his first day in office, Lula issued six decrees to revoke or alter policies implemented by the Bolsonaro administration and reinstate environmental protections, including a commitment to achieve net-zero deforestation by 2030.

Already, the country has one of the world’s highest shares of renewable energy in primary energy consumption, meeting 46% if the total energy supply. Agriculture is a converging topic here, as sugar cane production has expanded the use of biofuels: about 1/5th of Brazil fuel is ethanol.

“Brazil has long been a leader in renewable energy, particularly as it relates to biofuels,” says Dershowitz. “It’s been working to decarbonize state-owned Petrobas, the largest oil company in Latin America.”

Agriculture

According to Joseph Walters, BCIU Senior Program Officer, Brazil is a leading exporter in critical food crops like oranges, soybeans, coffee, sugarcane, and cassava. In 2021, Brazil’s agricultural exports reached $125 billion, as a top-five producer of 34 commodities.

“Brazil is essentially self-sufficient for basic food items,” Walters says. “This gives the country a bit of leverage on the global stage, as they can replace the U.S. as a trading partner for other countries when it comes to soybeans and other crops.”

Brazil significantly invested in the expansion of its agriculture systems after WWII, though at extreme environmental costs. In addition, the country maintains a significant beef industry, which impacts land use and requires proper environmental management. Bolsonaro’s administration expanded pastureland at the expense of forestation and ecosystem protection. It is generally considered unlikely that the current minister of agriculture Carlos Favaro will slow or stop cattle policies, says Walters, as global demand for Brazil beef continues to grow and exports remain a major priority.

“The key issue for the new administration is going to be keeping production high in order to keep the agri-economy humming, but also developing climate friendly solutions,” Walters says. “There are talks about developing these solutions, and partners are eager to see what policies might soon be proposed by the new government.”

Education

Brazil faces many of the social challenges as others in the region, including public health, rising poverty, and education. The pandemic significantly affected student outcomes, leaving millions of children with little to no access to schooling, disproportionally impacting economically vulnerable children. In 2021, Bolsonaro’s ministry of education decreased federal resources in this area, freezing almost 20 percent of the education budget and reducing spending on Connected Education, a program aimed at expanding access to high-speed internet in basic education.

However, according to Maggi Chambers, Program Coordinator at BCIU, the future of education in Brazil is still to be determined, but early signs indicate that Lula is aiming to tackle inequality issues as he did in his previous terms.

“Despite Brazil having historic issues with student retention, basic literacy in rural areas, and engagement, the country is still one the of the largest education markets in Latin America, with a total enrollment of over 40 million students from the preschool to high school level,” says Chambers.

According to Chambers, teachers are working closely with the national government to explore which adaptable teaching methods acquired during COVID-19 should remain due to the positive outcomes that they noticed from students of all ages, including inverted classrooms and increased educational engagement from at risk and diverse students.

Recently, Lula’s government announced increased investment aimed at promoting literacy by committing $200m this year and $400m next year to the cause.

“COVID-19 has significantly strained several aspects of the global education system,” says Chambers. “However, these recent investments in early childhood and elementary school education has made me optimistic for the future of learners across the country.”

Going Forward

Looking ahead, Lula is working to redefine Brazil on the world stage. In 2023, President Lula has already visited President Biden in DC to discuss bolstering economic development and collaboration and resumed a policy focused on South-South relations, aiming to bolster cooperation among developing countries in the Global South.

“On the international scale, Brazil has been largely dedicated to reversing the international isolation that was imposed by the Bolsonaro administration,” Ramirez says. “This is demonstrated through the announcement in January that Brazilian Development Bank would once again finance projects in neighboring countries, key to ensuring Brazil’s leading role in the development of Latin America.”

Lula is more outspoken in favor of peace, though is anticipated to not depart far from his predecessor’s neutral stance on the conflict in Russia and Ukraine. According to Ramirez, the new administration is providing some pushback to the foreign policy and economic agenda of the west, as seen by the recent deal with China to trade in their own currencies, as opposed to the U.S. dollar.

To learn more about BCIU’s Latin America programming, please visit our Events page here.