- The Washington Times - Sunday, October 6, 2002

SAO PAULO, Brazil Brazilians, fed up with poverty and crime, have flocked to front-runner trade union leader Luiz Inacio Lula da Silva, who has built a seemingly insurmountable lead heading into presidential election today.
Riding a wave of dissatisfaction with the center-right government, the charismatic Mr. Lula, who has traded in his T-shirt for a snappy suit and tie, is leading voter-intention polls with 45 percent. His closest rival and President Fernando Henrique Cardoso's hand-picked successor, Jose Serra, is trailing with 21 percent, according to the latest Datafolha survey.
On the crowded, busy streets of this sprawling city of 16 million people, driver Joao Telles, a Lula supporter, bluntly explained his vote:
"Cardoso forgot the poor. He did some good things, but he forgot the poor."
Mr. Lula, who leads the left-leaning Workers Party, has swept the nation with promises of creating jobs, increasing the minimum wage, improving health and education benefits, and asserting Brazil's place on the world stage.
"The Brazilian people no longer accept being dependent on other countries and the current government's submissive attitude," Mr. Lula declared recently, criticizing Mr. Cardoso's appeal for foreign investment and dealings with the International Monetary Fund.
This kind of rhetoric has spooked investors wary of what Mr. Lula might do with the nation's $260 billion debt if he were to win the presidency, although he has vowed not to default and pledged to stick to the conditions of a $30 billion dollar IMF loan package, most of which is to be disbursed next year.
But faced with no other viable alternative the other two candidates are even farther behind the ascetic-looking Mr. Serra businessmen and politicians are beginning to hop on the Lula bandwagon, something that would have been unthinkable a few years back.
"Businessmen are 'lulando' because it's better to be on the winning side than to fight him," said Ladanir Lopes, president of Medycamentha, a pharmaceutical distributor based in the eastern city of Bahia.
"It's not a question of ideology; it's a question of practicality."
With Mr. Lula so close to a first-round victory, some business leaders are also throwing their lot in with him to forestall the need for a second round of voting, which they believe could further destabilize the markets and the currency, the real.
But those who remember the more radical, fist-in-the-air Mr. Lula of past presidential races are not convinced.
"He's smart. He knew he had to move toward a Social Democrat agenda. The problem is knowing to what extent he is sincere," said Pierre Jean Dossa, general representative of Natexis Banques Populaires for Brazil, a business group.
"There is an overall uncertainty, a fear of change in the fundamentals of the Brazilian economy," said an IMF official who asked not to be identified. That uncertainty has made foreign investors wary and rocked the Brazilian markets.
Despite Brazil being the world's 10th-largest economy and Latin America's industrial powerhouse, the real has plummeted against the dollar, and at least two Brazilian branches of Samsung Corp. and LG Electronics Inc. are cutting back on production.
Much will depend on Mr. Lula's choice of a Cabinet and whom he picks to lead his economic team. If he heads out to immediately fulfill all his campaign promises to the millions in the struggling poor and middle classes, he will find it hard to keep the 3.75 percent budget surplus needed to keep IMF money flowing in.
"He can't open the treasure chest right away," Mr. Dossa said.
Mr. Lula will also have to use his famous skills as a negotiator, honed during the years he challenged Brazil's military government through worker strikes in the 1970s, to work with the country's powerful national Congress.
His party is not expected to win more than 30 percent of seats there, and a lot will depend on Mr. Lula's ability to strike deals with other parties, including the ruling Social Democracy party.


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