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Lula won support of toughest critics with his actions to stabilize economy
Source: Globe and Mail*

Four years ago, the thought of electing a radical former union leader from a poor background made Brazil's business classes cringe. But today, populist President Luiz Inacio Lula da Silva is widely praised for reducing hunger and stabilizing the country's economy, and he appears poised to coast to re-election.

According to pollster Ibope, 48 per cent of respondents plan to vote for Mr. Lula in the upcoming presidential election, compared with 27 per cent for his nearest rival, former Sao Paulo governor Geraldo Alckmin.

"People who were Lula's critics during the first election are his greatest supporters today," said political science professor Eduardo Gamarra, director of the Latin American and Caribbean Center at Florida International University in Miami. "For some, he has been a 'good leftist.' "

Although not all economic news has been good, since taking office in 2003, Mr. Lula has kept inflation in check and decreased Brazil's foreign debt, while keeping the economy growing at an average 3 per cent. He has created 4.8 million jobs and increased Brazil's minimum wage by 60 per cent, from 200 to 350 reais -- about $150 Canadian.

"There's no denying that Lula has shown results on economic matters," said Tomas Malaga, chief economist at Brazil's Itau Bank. "More growth and less inflation -- it's what everyone wanted, and in comparison with the government of [predecessor Fernando Henrique] Cardoso, he certainly achieved it."

Mr. Malaga said Brazil has benefited from Mr. Lula's pragmatic attitude, especially his refusal to renege on the country's foreign debt. In December, Mr. Lula announced that Brazil had fully paid off its $15-billion (U.S.) debt to the International Monetary Fund.

Still, economic growth has been below expectations. Mr. Malaga said Mr. Lula's economic challenges for a second term will include increasing investment, expanding infrastructure, reducing taxes and maintaining a fiscal surplus.

Moreover, critics point out that the unemployment rate is still hovering above 10 per cent. "The only way to end hunger is with more work," said Rogerio Crisostomo, as he waited for fares at a taxi stand in Sao Paolo. He said Mr. Lula hasn't done much to help people who aren't dirt poor, but who are doing their best to eke out a living.

On the political front, however, Mr. Lula has been praised for keeping good relationships with his neighbours. His leadership is even cited as a regional model.

"He didn't come in on a vengeful agenda, as happened with leaders in Bolivia and Venezuela," Mr. Gamarra said. "Populists often come to power at very crucial moments and they represent a tremendous opportunity to redress social grievances. They also come in with a leftist agenda and are facing the biggest challenges to make the left credible."

Mr. Gamarra said Mr. Lula has established cordial relations with the United States and shown that the left can govern efficiently. Still, he notes that there have been several major corruption scandals in Mr. Lula's government, including one last year that nearly toppled his party.

Yesterday, Mr. Lula blamed his former campaign chief in the most recent scandal for having hired "a nutty gang" that was accused of trying to buy materials that could implicate opposition presidential candidate Mr. Alckmin and opposition candidate for Sao Paulo state governor Jose Serra in a kickback scheme linked to ambulance purchases by state authorities.

Equally damaging, perhaps, have been accusations of abandonment from within his own party, Mr. Gamarra said. One of his opponents for this round of elections is Heloisa Helena, a senator expelled from the Workers' Party who decided to form her own splinter group, the Socialism and Freedom Party. She has argued that Mr. Lula governed against his constituency.

In this election campaign, Mr. Lula has kept his focus on his ambitious poverty-reduction plan, dubbed Zero Hunger, but he hasn't cited specific targets. Brazil is the world's fourth-largest food exporter, but more than 40 million Brazilians -- a quarter of the population -- lived below the poverty line when Mr. Lula took power. He vowed to stamp out hunger by December 2006, with the family grant cash-transfer program. This June, the government announced it had surpassed its goal, reaching 11.1 million families (roughly 40 million individuals).

Mr. Lula's commitment to end hunger and expand social programs has even won praise from the likes of the World Bank, not normally keen on social spending.

"We constantly receive requests from other governments around the world to learn more about Brazil's experience," said Kathy Lindert, a World Bank economist based in Brasilia. She calls Brazil a "superstar" in exporting its trademark family grant program to Latin American and African countries.

Still, not all of Brazil's rural poor have access, and there have been problems with the distribution of resources, said Maria Carmeli Yasbek, a professor at Sao Paolo's Catholic University. "But the main problem is that the program has been conceived as a humanitarian or moral idea, rather than one which fulfills citizens' rights. The state has to recognize its responsibility for fulfilling social and economic rights."

To that end, Mr. Lula's party hopes to pass a bill in a renewed term that would make the alleviation of hunger a human right guaranteed by the state. His Minister for Social Development and Hunger Eradication, Patrus Ananias, said the challenge is changing the attitudes of Brazilian society.

"We have a social debt, and it is our responsibility to reduce inequality. Now we're trying to take a step larger than our legs."