During Delfim Netto’s second term, the international economic crisis that gripped many countries during the 1970s also affected Brazil negatively, and Delfim Netto’s government sought to deal with it by utilising its massive mandate to further reform the economy. Public service and industrial funding, as well as taxes on businesses, were significantly cut, which led to the wealth gap in Brazil continuing to climb and public distaste for the President’s form of government rising.
It was an unmanageable situation from the perspective of economic growth as well as inequality, though; the massive cuts prevented the government being able to make enough revenue back from taxes, and it was unable to stop its foreign borrowing kicked off after the 1973 oil crisis. By the end of the decade, Brazil’s foreign debt was over $92 billion, the highest in the world, and the value of the cruzeiro was subject to ongoing hyperinflation.
Things came to a head when strikes broke out in the ABC Region of São Paulo in 1978 against the pay cut policies and proposed repression of trade union rights by Delfim Netto. Despite the President’s intention to suppress a potentially powerful force to stand against him, he ended up incurring the fury of underpaid industrial workers, particularly metalworkers. The strikes persisted on and off all the way up to the end of Delfim Netto’s presidency, and helped allow the formation of a new left-wing party, the Worker’s Party (PT), by the ringleaders of the strike, most prominently Luiz Inácio da Silva. ‘Lula’, as he was nicknamed, had become an extremely well-recognised and radical figure, and soon became an (albeit independent) ally of the PTB.
Given both his constitutional amendment and his enormous unpopularity, Delfim Netto had no chance of returning to power in 1980, and the PRL was collapsing with his decline; the PSD and PTB took over 60% of the seats between them when the next Congress election was held in late 1979. Also of note in that election was a credible performance by the PT, and this and Lula’s popularity with the working class would be integral to the outcome of the 1980 election.
Despite the sombre mood in the depleted PRL, Vice President Roberto Campos ran a defiant campaign pledging he could provide economic recovery. However, the real competition was whether the next President would be from the PSD or PTB, and the PSD’s leader in the Congress Tancredo Neves and the PTB’s leader Leonel Brizola organised the Congresso Conjunto (‘Joint Congress’) in January 1980, allowing members of both parties to vote for which one would become Presidential nominee in a manner not unlike American parties’ primaries. Neves won out, and won a massive landslide over the embattled Campos.
Brizola presumed he would become Neves’ running mate, but that was not to be. After his 1970 defeat and now his failure to secure the Presidential nomination over Neves, the PTB leadership were sceptical of Brizola’s worth as a candidate, and instead they made the somewhat controversial choice to court Lula for the nomination. With the encouragement of the union movement, Lula and the PT accepted the PTB’s endorsement, in response to which the Brazilian right was left (pun unintended) running scared.
In response to Lula’s emergence, a very controversial choice was endorsed by the PRL- General Sylvio Frota, an outspoken military general who had been a staunch opponent of the Brazilian left, allegedly suggesting that a military coup would be necessary if a radical leftist came into power. His policy platform was unappealing to much of the country, however, and mostly just confirmed the demise of the PRL as a credible political force.
However, the right did have a somewhat more reliable figure emerging to challenge Lula, namely Jorge Bornhausen. Bornhausen was another rich businessman, but was young at 43 and his stint as Governor of Santa Catarina was actually fairly well regarded. It was hoped he might be able to rally voters against Lula by playing to anti-communist sentiments. This wasn’t enough for him to beat Lula, but he did put in a much more credible showing than Frota, and more importantly, to secure the national strength of his Republican Party as a force for the right to rally around, one which also began to sap some of the strength from the centrist PSD (which quietly split over Lula and focused on endorsing Neves).
While the left had decisively retaken power in Brazil after a decade of right-wing governance, Neves and Lula were not in for an easy five years, and by the end of their tenure, one would be dead and the other would be almost as embattled as the last President had become.
