The Rise and Fall of Lula da Silva

 

Today, the G20 summit kicks off in Rio de Janeiro, and the eyes of the world will focus on Lula da Silva, a key figure of the Latin American left. He hopes to shine as he did 15 years ago, in London’s G20 summit, when the US and Europe were eager to engage with sizeable economies like Brazil to recover from the global financial crisis. According to Barack Obama, he was one of “the most popular politicians on Earth”.

 

It was for good reason. Back then, Lula was renowned as the architect of one of the most successful hunger relief programs across the world. He was dubbed “The Father of the Poor”, as estimates shows that a staggering 30 million Brazilians left extreme poverty during his first time in office. He built the program upon sound macroeconomic policy, one that aligned with his predecessor’s, the technocrat Fernando Henrique Cardoso, which helped Brazil heavily increase its international trade amidst the 2000s commodities boom.

 

Thus, once global markets had stumbled, Lula tried shaping the continent like no other Latin American had attempted.

 

Joe Biden visits Brazil in 2009

In 2009, the US Vice President Joe Biden travelled to Brasilia to discuss the biggest stumbling block for any negotiation: Cuba. In 1960, the US had imposed a controversial embargo on the island after the revolutionary leader Fidel Castro seized a billion-worth of American companies and aligned with the USSR, Washington’s biggest enemy.

 

By the 2000s, however, Cuba’s diplomacy had remained strong in Latin America, even after a strong wave of democratisation in the region. After all, during the 70s and 80s, the island provided a haven to left-wingers sent into exile by the far-right dictatorships that ruled the continent. Famously, Allende’s family moved to Cuba after Pinochet’s coup in Chile, with his sister and daughter dying in La Habana some years thereafter.

 

The US bore significant responsibility for those atrocities, and so in 2014, Obama surprisingly began a normalisation process with Cuba. It all began with a few prisoners’ exchange, but it quickly turned into a formal request to the House of Representatives to lift the embargo in 2015. Although the policy didn’t prosper, Obama visited the island in 2016, the first time a US President did so in almost a century.

 

For many, that would not have occurred had Lula not intervened. Although he had left office in 2011, his influence had lingered thanks to his ‘foreign ministry presidency’. Along with a decade of pouring foreign direct investment from the US and Europe, he had established the BRICS alliance, secured fuel agreements with Turkey and Iran, stretched economic links to China, and led one of the most compelling requests for a permanent seat at the UN Security Council. His negotiation skills had become an open secret at government bureaus, and his figure was unavoidable in Latin American politics.

 

Prison

However, a few days before Obama landed in La Habana, Lula was detained in Sao Paulo. A probe had begun a few years earlier at a small car cleaning workshop in Brasilia, wherein the Federal Police broke chasing a case of money-laundering. The operation was later named Lava Jato (“Car wash”) and uncovered a massive money laundering scheme at the core of Petrobras, Brazil’s state-owned oil giant and Latin America’s largest company at the time. The company’s board of directors would pay inflated payments for construction projects, ones that would later finance Lula’s Workers Party.

 

The investigation allowed prosecutors to uncover a money laundering scheme led by Odebrecht, Petrobras’ main developer, that involved a dozen Latin American Head of States. Famously, former Peruvian President Alan García shot himself before the police sought his arrest in Lima. Overall, Petrobras lost 92% of its market capitalisation from its peak in 2008, when the first claim against Petrobras was filled, and Odebrecht filed for bankruptcy in 2019. The investigation became one of the biggest corruption scandals in history, with a class action in New York led by Petrobras securities-holders achieving a US$3 billion settlement, the largest in the US history involving a foreign issuer.

 

In 2017, Lula was charged with corruption and money laundering and was sentenced to 12 years of imprisonment, but in the end, he only spent 580 days in jail, being liberated in November 2019 after the Supreme Court annulled the trial against him. A few months earlier, a newspaper had published leaked conversations between the judge and prosecutors that jailed him, suggesting they had colluded. In 2019, Sergio Moro, the responsible judge, was serving as the Justice Secretary for Jair Bolsonaro, Lula’s biggest opponent.

 

His liberation united his supporters, and in October 2022, he won the Presidential election against Bolsonaro, who never recognised the defeat. Around those days, Bolsonaro’s supporters blocked highways and attacked the police headquarters in Brasilia. Lula’s return resembled that of a national hero. He pledged to recover Brazil’s standing on the international stage, and recover the Amazon, which had been severely damaged by Bolsonaro’s deforestation policies.

 

However, his approval ratings, once as high as 80% when he left office in 2011, have now dropped to just 36%. In 2023, he faced severe criticism for hosting the Russian foreign minister Sergei Lavrov while intending to play a negotiation role in Ukraine, and in 2024 he showed complacency after Venezuela’s fraudulent 2024 elections, which many think helped dictator Maduro consolidate power.

 

The G20 summit will give him a chance to restore his credibility, but the challenge is formidable. He has shown an inability to propose a path for Latin American integration, and his climate diplomacy is unlikely to resonate with the new Trump administration. All of this leaves him in a poor position to play a significant role on the global stage. Can we expect a Lula’s comeback during this G20 summit? A miracle seems more plausible.