Monday, December 22, 2003

SAO PAULO, Brazil — A year in office has transformed President Luiz Inacio Lula da Silva from left-wing populist to self-styled pragmatist, at home with working stiffs and Wall Streeters alike.

Unlike leftist counterpart Hugo Chavez of Venezuela, who has antagonized investors as well as industrial workers and is being dogged by a recall campaign, Mr. Lula da Silva is riding high, drawing a 70 percent approval rating in a poll this month by the Sensus public opinion research group.

Stocky, bearded and gravel-voiced, Mr. Lula da Silva projects a roughhewn charisma. He is fiery on stage, but turns smiling backslapper behind the scenes. It’s a leadership style popular in South America’s biggest country.

“We have a strong aversion to ideology,” said political scientist Amaury de Souza at the MCM consulting group. “Brazilians are not prone to war or revolution.”

The day after his inauguration on New Year’s Day, Mr. Lula da Silva had breakfast with Mr. Chavez and dinner with Cuban President Fidel Castro, but he has steered a centrist course in dealing with Brazil’s slump.

“Little has changed in a year, but you can’t blame Lula for that,” pushcart vendor Arlete Xavier said, referring to the president by his popular nickname. “He inherited a recession.”

Mrs. Xavier did not vote for Mr. Lula da Silva, but said she might cast her ballot for his re-election in 2006 if Brazil’s economy improves.

But will it?

Investor jitters, big debt and high interest rates dragged Brazil’s economy into recession in the first half of last year. Disdaining government spending as a way to attack the slump, Mr. Lula da Silva’s finance minister, Antonio Palocci, a physician and former mayor, has held down the budget and gradually cut interest rates.

His approach won Brazil $14 billion in International Monetary Fund credits, which helped stabilize the currency and restore investor faith. It made the minister, as well as his boss, Wall Street darlings.

Economists are forecasting economic growth of at least 3 percent next year, with inflation down to 6 percent, less than half the rate last year.

Many Brazilian farmers also have hit the jackpot, mainly because of a soybean boom that has the country on track to pass the United States as the world’s biggest soy exporter.

“The mood among farmers is euphoric,” said Robson Mafioletti, an adviser to soybean cooperatives in the southern farm state of Parana. “We have had five straight years of burgeoning crops and rising prices. Farm income in Parana rose an average of 24 percent per year in the last decade. People are driving new cars and buying more land.”

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