A Month in Office, Brazil's Lula Full of Surprises
By Carlos A. DeJuana and Todd Benson
SAO PAULO, Brazil - Brazil's new president, Luiz Inacio Lula da Silva, has spent his first month on the job doing everything he can to break protocol.
The burly, gruff-voiced former metalworker cries in public and drives
his security detail nuts by jumping out of the car unexpectedly to chat
with supporters outside the
presidential palace. Recently he flew to Europe on a commercial flight to save his penny-pinching government some cash.
Lula, it seems, is surprising just about everyone, supporters and detractors alike.
"The critical question was always Lula's capacity to lead, and so far
he has shown that he is quite adept and frankly better prepared than we
thought for the presidency,"
said Riordan Roett, director of the Western Hemisphere Program at Johns Hopkins University in Washington.
Lula, 57, was elected Brazil's first working-class leader in October,
winning a landslide in his fourth bid for the presidency. To get there,
he had to overcome serious
doubts that he -- a former left-wing union leader who never went beyond elementary school -- could aptly steer the world's fourth-most populous democracy and
Spooked by Lula's radical past, financial markets plumbed to record
lows before his victory, expecting him to default on the country's $250
billion public debt and drive
Brazil -- and perhaps the rest of Latin America with it -- to ruin.
So far, he appears to be proving the skeptics wrong.
"On the economic front, the government has only put out positive signals," said Sergio Abranches, a political columnist and consultant based in Rio de Janeiro.
Lula's top economic chieftains, Finance Minister Antonio Palocci and
Central Bank President Henrique Meirelles, have repeatedly stressed the
commitment to low inflation and austere fiscal policies, evoking cries of betrayal from the far left of Lula's own Workers' Party.
Investors took notice and sent Brazil's stocks, bonds and currency soaring
in the first half of January before the threat of a U.S. war against Iraq
cast a pall over global
Brazilians too are rallying behind their new president who is mobbed
like a rock star wherever he goes. A poll this week showed nearly 80 percent
of Brazilians believe
Lula will do a good or a great job of leading the country.
If anything, Lula has spent his first month in office trying to temper
those hopes, saying it will take time to narrow Brazil's yawning income
gap, create more jobs and get
the economy running at a healthy rate.
Analysts say he is spending his political capital wisely.
While the finance ministry is busy cutting spending across the board,
Lula spends the bulk of his time talking up social programs like his flagship
"Zero Hunger" project.
Some of his first acts as president were to suspend a $700 million fighter jet contract, arguing the money would be better used on social programs, and to take his entire
Cabinet on a reality tour of Brazil's poorest ghettos to "look misery in the eye."
He has also been careful to cultivate allies in Congress, skillfully
brokering the nomination of former President Jose Sarney to lead the Senate
over a rival candidate who
was more hostile to the president's agenda.
On the international stage, Lula has won praise from anti-globalization
protesters and the world's financial elite alike, while leading a push
among six nations to negotiate
a peaceful end to Venezuela's political crisis.
"Both in terms of the political handling internally and the foreign policy initiatives, what we've seen so far is very encouraging," said Roett.
But Lula, and Brazil, aren't out of the woods yet.
If the honeymoon is to last, analysts warn, Lula is going to have to
move swiftly to pass much-needed economic reforms, like overhauling Brazil's
costly pension and tax
Abranches, the political analyst, fears Lula's penchant for opening each policy initiative to debate with the public could hamper the reform efforts.
"Every time you allow more players in the game, the chances of maintaining the status quo increase violently," he said.
Lula will also to have to get even tougher on the fiscal front to reduce Brazil's crushing debt burden, now equivalent to 56 percent of gross domestic product.
One way to do this would be by pushing up the government's budget surplus
above the current target of 3.75 of GDP -- something Finance Minister Palocci
has said is in
While raising the surplus would certainly win Lula and his economic
team more points on Wall Street, fickle financial investors are unlikely
to give the new president an
"Lula is beginning to acquire credibility, but this process is far from
being consolidated," said Paulo Leme, managing director of emerging markets
at Goldman Sachs in
New York. "The demanding part will come, which is delivering the goods."
© 2003 Reuters