• The divided Brazilian society and political opposition could make governance difficult for Luiz Inácio da Silva.
• Lula’s international standing is strong, with many foreign leaders from West to East offering him support and cooperation in trade and environment.
• Da Silva’s past presidency and the current global scenario encourage him to carry out his policies.

Why is Lula hot?

Answer: the episodes that succeeded Lula’s arrival to the presidency on January 8 gave him an opportunity to reaffirm his power. 

Two years after the US Capitol attacks, supporters of the Brazilian ex-president Jair Bolsonaro replicated similar events in Brasilia, targeting the Congress, the presidential palace and the Supreme Court. Their objective was to oust the newly elected president, Luiz Inácio Lula da Silva, under claims of electoral fraud. His response was swift and determined. More than a thousand demonstrators were arrested a few hours after the incidents, and the police and military quickly regained control of the ‘Tres Poderes’ square. This event marked the beginning of Lula’s presidency, and its many consequences have helped him pave the way towards a good start.

On the one hand, many international leaders and figures quickly addressed this attack on democracy and supported Lula through phone calls, statements and short videos. U.S. President Joe Biden, regional neighbours like Gabriel Boric, Alberto Fernandez or AMLO and many European presidents embraced the president, denouncing the events and backing the electoral process. Disregarding if their support was genuine or to prevent similar events from happening to them in the future, it offered Luis Inácio da Silva international legitimacy.

On the other hand, Brazilian society remains divided. First, Bolsonaro’s supporters, despite being morally weakened, are still a strong and large group. Due to Lula’s former political scandals (which put him in jail in the first place), even many non-Bolsonarist conservatives and centrists have reservations about the president’s return. It will be his responsibility to balance his government among friendly and reserved faces.

Who is changing Lula’s temperature?

Answer: Governance will be a challenge for Lula, as he faces strong political opposition. Foreign policy may be a more profitable enterprise.

Brazil has become increasingly politically polarised in recent years, with Lula and the Workers’ Party (PT) facing opposition both in the National Congress and in the streets. Despite his victory in the 2022 general election, the majority in the Chamber of Deputies still remains contested, complicating Lula’s plans to advance his agenda and policies. While his coalition still possesses the majority in Congress (with 229 or 44% of the seats), the PT only accounts for a total of 13% of the chamber.

The storming of governmental buildings in Brasilia last January displayed the spiral of ungovernability that many countries in the region are experiencing. With no exception, after four years under Bolsonaro’s management and the political crisis that preceded him, Brazilian democracy is weakened. Adding the underperforming economic indexes, as well as events like the COVID-19 pandemic, Lula faces many challenges that require special attention. 

However, outside his country’s borders, the grass seems greener. In contrast to Bolsonaro, da Silva wants to restore Brazilian diplomacy. Lula’s role in South American foreign relations during his past presidency was characterised by seeking leadership within the continent through diplomacy and cooperation. Adding on, he was a key figure of the South American left, exploring mechanisms to bolster the independence and relevance of the region. He contributed to placing Brazil in the international markets and reinforced its role in international organisations such as CELAC or MERCOSUR. 

Under the current scenario, Lula is surrounded by friendly faces, such as Alberto Fernandez in Argentina or Andres Manuel Lopez Obrador in Mexico. In fact, after just a few weeks of presidency, Alberto Fernandez and da Silva have already announced preparations to launch a joint currency that could serve as the Euro for South American nations. Many Western leaders, such as Joe Biden or Olaf Scholz, jumped to Lula’s support after his election. And the EU-MERCOSUR trade agreement will likely accelerate its rhythm. Foreign policy success might be easier for Lula than the internal politics of Brazil. 

What is driving Lula?

Answer: his past presidency and the convenient global scenario encourage Lula to carry out his policies.

During his first and second presidencies, Lula was Brazil’s most respected leader, accounting for up to 85% of the approval rate. Leaving the legitimacy of his conviction aside, which caused discomfort in Brazilian society and eroded the public opinion of Lula and the PT, he is still a popular leader with a history of reforming the country and placing the Brazilian economy among the largest of the world.

While Brazil has changed vastly in these last 10 years, both economically and politically, his third turn in the presidency offers Lula the opportunity to clean his image. To begin with, he has already complied with some of his electoral promises, such as the halting of the privatisation of 8 state-owned companies as well as revoking some of Bolsonaro’s gun acquisition loosening measures. 

Despite this, harmonising the different political factions and moving forward on his national and foreign agenda will require big efforts. Internally, Lula has adapted his discourse to appeal to different groups of leftists and moderates. However, opposition to Bolsonaro also played an important role in Lula’s electoral support. It is now his chance to solidify and develop this coalition into political support. Lula needs consensus not only in Congress but with the Brazilian Central Bank. To go through with many of his electoral promises and revive the Brazilian economy, the negotiation of an extraordinary budget will be required. His government is expected to ramp up spending, which has raised concerns regarding the availability of his projects. 

Moreover, his environmental agenda, which is focused on stopping the deforestation of the Amazon forest, faces the opposition of many farming and mining enterprises, which can exert enough pressure and influence to push back Lula’s new policies. At the same time, however, he counts on the support of many Western states such as Germany or Norway, which have committed to re-establishing their financing to the Foro Amazonia fund. 

There is a question of urgency in the process, too. Aside from national politics, much of his international support, particularly from his regional allies, may dissipate in the upcoming years as many of those leaders will soon face electoral processes. Among others, Alberto Fernandez’s Argentina will undergo elections next October, and AMLO’s Mexico in June 2024. Therefore, projects like the joint currency, which will require long-term cooperation, may not be successfully implemented. Still, Lula, as the head of Latin America’s major economy, is able to navigate his way into reinforcing former alliances with Western countries as well as opening the door to new parties, such as China. 

 What does this mean for you? 

Answer: the return of Lula to Brazil’s leadership brings good hopes to many different actors.

The 2023 CELAC summit counted with the awaited return of Brazil. Under the claim that “Brazil is back”, Lula not only celebrated Brazil’s return to the organisation that he once co-founded but recalled his nation’s role as an influential figure in the region. As an emerging actor in the food and energy supply chains, the Biden administration, the European Union and China are among the most interested in this return. 

While the increase in exports from China in Latin America has caused a decrease in internal trade within South American states (and affected the regional integration that Lula seeks), China is Brazil’s biggest trade partner, and there are no indications of this dynamic to change. Lula and Xi Jinping are set to meet in Beijing on March 28 to further discuss a possible trade agreement. 

China’s approach also encourages EU officials to recommence their expected EU-MERCOSUR free trade agreement. Stalled for some time, it could eliminate bilateral tariffs, increasing the export capacity of the two sides. However, the EU demands sustainability criteria to be incorporated into the agreement, something that many, like the farming sector, are sceptical on. Lula’s rapprochement with Europe has hinged on his environmental promises, which means that this deal may finally come to pass. 

The upcoming years of Lula as president of Brazil will leave us with many lessons about diplomacy and policy-making, regardless of succeeding or failing. Brazil’s stabilisation as a powerful international actor could modify global dynamics and trade routes. However, Lula has an abundance of challenges within Brazil. From the growing distrust in the democratic process and institutions to important financial and environmental troubles, he will need to prioritise and assume some difficult decisions.