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Brazil Elections

Brazil: President-Elect Lula Elucidates Goals

Kenneth Rapoza, São Paulo, Brazil, Oct. 31, 2002

Lula waves to supporters after winning Brazil's presidential elections

Luiz Inácio Lula da Silva waves to supporters after meeting with outgoing President Fernando Henrique Cardoso, Oct. 29, 2002 (Photo: AFP).

When Luiz Inácio Lula da Silva of the Workers’ Party heard that the Supreme Electoral Court of Brazil had pronounced him the winner in the presidential elections on Oct. 27, he collapsed to the floor in laughter and tears, he told reporters. Millions of Brazilians had similar reactions. They can’t believe this four-time presidential candidate from a humble, working-class background, who more closely resembles the average person here than members of the political class, won more votes than almost any other leader in history. Lula received 52.7 million votes, or 61.3 percent of the total. Rival Social Democratic candidate José Serra lagged far behind, winning only 38.7 percent of the vote. Of the democratic countries with an electoral base of 100 million voters or more, only Ronald Reagan’s 1984 victory—based on 54.5 million votes—beat Lula’s record.

If the streets of São Paulo are any indicator, Brazilians are happy for Lula. A veritable sea of red-and-white flags displaying the Workers’ Party star logo waved along Avenida Paulista, the main drag in downtown São Paulo as the first results came in on Sunday. By midnight, a reported 150,000 people had crowded the streets in front of TV Gazeta to wait for Lula’s promised address. The last time the avenue saw this many people was on Aug. 25, 1992, when nearly 100,000 protestors called for the impeachment of President Fernando Collor. From the moment Lula was announced president-elect, people began painting Lula’s name on their bodies, and stuck blue and green campaign stickers with the words “Agora é Lula” (“It’s Lula Now,”) on their faces and clothes. Fireworks went off. Lula’s theme song (Click here to listen to it) echoed through the streets. Car horns blared.

Lula triumphantly told the assembled crowd, “Hope beat fear,” referring to Serra’s campaign strategy that played on the population’s uncertainties regarding Lula’s radical past as a union organizer, his economic plans, and his lack of experience in elected politics.

Interrupted by cheers, Lula said, “You must know what’s going through my head and in my heart. I want to say that what we did until now is much easier than what we all have to do going forward.”

Lula made his first official public address as president-elect on Monday at the Hotel Intercontinental, where he thanked “companheiros” who helped form the Workers’ Party but were either killed or disappeared during the military dictatorship. And there he told reporters that his first two orders of business would be to combat hunger and invest in civil construction projects.

“My first year will focus on combating hunger. It’s an appeal of solidarity with the Brazilians who have nothing to eat. I’m announcing the creation of a Social Emergency Secretary, who will have the power, as early as January, to fight for the victims of hunger,” Lula said. Photojournalists, many with red stars and Lula pins attached to their carrying cases, took pictures of Lula each time he raised his head from the prepared script titled “Promise of Change.”

The program, inspired by former U.S. President Franklin Delano Roosevelt’s food stamp initiative, is expected to cost roughly US$1.5 million. Funding will come from the federal budget, half of which has already been designated to combat hunger. An estimated 46 million Brazilians eat less than 2 square meals a day, according to a government survey. The program aims to provide an additional 76 reals monthly for 20 percent of the 46 million by the end of 2003, in a country where the minimum wage is 200 reals per month.

“Creating jobs will be my obsession,” Lula said. “We are going to immediately mobilize the available resources in public banks—through private initiatives—to invest in national civil construction and sanitation projects. Beside creating jobs, it will help us return gradually to sustainable growth.”

Lula said he would create a Social and Economic Development Council, an eclectic group of conflicting interests, including large, national workers’ unions, bankers, non-governmental organizations, the landless farmers’ movement, professors, and ex-ministers, to play an active role in determining government economic policy.

This week’s edition (Oct. 30) of São Paulo’s liberal Istoé magazine quoted transition government coordinator Antônio Palocci as saying the idea was inspired by European countries. “In France, for example, there are councils like this that are really active. It’s part of our pact and is an effort to try to preserve external credibility and neutralize reactions from the more traditional sectors that are resistant to change,” Palocci told Istoé’s reporter.

Antônio Prado, an economist who is now part of the transition team, said at the Hotel Intercontinental that the programs depend on one thing: economic growth.

Brazil’s economy grew 0.5 percent this year, according to government numbers. Lula hopes to boost that to better than 3 percent.

João Claudimir Ferreira, a 59-year-old sheet metal worker with rough hands and split knuckles who used to work with Lula in São Bernardo do Campos, São Paulo, furrowed his brow in disgust when asked, “What if Lula can’t make the social and economic changes he promised?” Ferreira allows that Lula “will have a tough time making changes next year, but in the second year he will do much more for the people of Brazil. But he’s not a dictator; he can’t do it alone.”

He was personally invited to the press event. “Here he is, the president of Brazil now, and he invites me, his poor friend? Ah, man, if people see what Lula can do, he will be re-elected in 2006,” Ferreira said.

Lula flew to Brasilia on Tuesday to meet with outgoing President Fernando Henrique Cardoso. There he was greeted by more Lula fans and treated like a pop star.

Lula’s biggest challenge will be to reassure the international financial markets, which do not like uncertainty. Leading lights from international finance organizations are now clamoring to meet with the president-elect to get a better sense of what he plans to do. Lula has already been invited to attend the World Economic Forum in Davos, Switzerland in January, and World Bank President James Wolfensohn has said he wants to talk with Lula about reducing poverty. The bank has US$5.3 billion invested in Brazil. The markets will be watching to make sure Brazil doesn’t invest too much of its cash in projects that are unlikely to generate revenue and will increase the country’s US$288 billion public debt.

In this week’s edition (Oct. 30) of São Paulo’s centrist Veja magazine, Sérgio Abranches, a well-known political scientist, wrote that “Lula will have the biggest load of responsibility since the end of the military dictatorship. He created a lot of negative expectations in the financial markets and positive expectations in sectors that were promised changes that are impossible given the domestic and international scenario.”

São Paulo’s conservative Jornal da Tarde rehashed an editorial from the Oct. 30 edition of London’s Financial Times that warned Lula that the international markets were watching him closely. “Any policy error or a poorly chosen phrase before he takes control in January will cause a disaster,” The editors of the Financial Times wrote, noting that Brazil’s debt-to-GDP ratio means that a “debt moratorium… is only a question of time.”

Lula has sought to reassure investors by saying the only way Brazil would be forced to default on its debt is if it were to continue on its present economic course, which he says relies on attracting investment dollars in high-yield government bonds rather than through investment in the productive economy.

The composition of the Lula government is expected to take shape as early as Nov. 1.

In an Oct. 30 poll conducted by Valor, an investment daily, 66.4 percent of respondents thought the financial markets would be less volatile than they have been in the last few months once Lula announces his cabinet. Among international and domestic financiers’ biggest concerns are who will lead the central bank.

While Lula’s choice may yet reassure investors, early indications from Washington suggest that Lula faces an uphill battle in his attempts to reassure U.S. politicians. On Oct. 30, the Brazilian news agency Agencia Estado, reporting from the Seventh Business Forum of the Americas in Quito, Ecuador, carried a warning from U.S. Chamber of Commerce president Tom Donahue. Asked about Brazil’s future, Donahue reportedly told reporters that any government opposed to open markets “would pay a heavy price.” The message was likely intended equally for Ecuador, which is on the verge of electing Col. Lucio Gutierrez, whose campaign speeches are marked by rhetoric similar to Lula’s.

Donahue’s statements were mild compared to those of some leading conservative lawmakers. An Oct. 24 letter from House International Relations Committee Chairman Henry Hyde (R-Ill) to U.S. President George Bush accused Lula of a “10-year-long association… with Latin American, European, and Middle Eastern terrorist organizations…. There is a real prospect that Castro, Chávez, and Lula da Silva could constitute an axis of evil in the Americas which might soon have nuclear weapons and ballistic missiles,” Hyde concluded, urging Bush to “help the people of Brazil understand the truth about Chávez so that they do not make a similar mistake and elect another pro-Castro radical.”

Few in the Brazilian press shared Hyde’s view. “I have no doubt that he will maintain economic and institutional stability in the country,” Célio Borja, justice minister in 1992, wrote in the Oct. 30 edition of Veja. “What is hoped for is what he promised on his campaign: a reactivation of economic activity that improves the lot of the working class.”

Like most Brazilian magazines, the progressive Brazilian finance magazine Carta Capital’s cover featured the banner headline, “Lula da Silva” this week. Inside, columnists cheered Lula’s victory. Meanwhile, the editors of the left-wing monthly Caros Amigos asked their readers what they expected from a Lula presidency. One reader wrote back that “Lula gave Brazilians a chance to dream of a more just country. Forget stocks and dedicate yourself more to people: That's the solution.”

“We live in a decisive and unique moment,” Lula acknowledged on Oct. 28. “[Problems] will come without surprises and they won’t be unexpected. My government will have the mark of understanding and negotiation, firmness, and patience. We are aware that the greatness of this task overcomes the limits of one political party. This is the meaning of the effort that made this campaign reunite unions, nonprofits, and business leaders of all segments in one common action for this country.”