- The Washington Times - Monday, September 25, 2006

RIO DE JANEIRO

Four years ago as presidential candidate, Luiz Inacio Lula da Silva struck fear into the heart of Brazil’s business community with the fiery rhetoric of his days as a leftist union boss.

Now as he seeks re-election Sunday, he is widely seen as a moderate for a Latin America caught between declining U.S. influence and rising Venezuelan radicalism.

The man known to all as “Lula” has won worldwide praise for bringing gradual benefits to the poor in one of the world’s most economically unequal nations, without resorting to radical measures and by uniting a left-leaning party to free-market ideas.

Though he is far ahead in the polls, his presidency is being rocked by a corruption scandal that could unseat him. It’s a distant prospect, but an ironic turn of events since it was his Workers Party’s reputation for clean hands that helped him become Brazil’s first elected leftist president.

Under Mr. Lula da Silva, more than 6 million of Brazil’s 185 million people have risen from extreme poverty to the middle class, according to a study by the respected Datafolha Institute.

Help for very poor

Social programs such as Zero Hunger, which funnels $325 million a month to 45 million Brazilians, are considered the world’s biggest income transfer to the poor and the reason his support by the lower classes has withstood a landslide of corruption charges against members of his party and government.

Mr. Lula da Silva has accomplished this without soaking the rich or hurting the economy. His election in 2002 was considered the high point of a leftist surge in Latin America, away from free-market doctrines. But today, compared with Hugo Chavez of Venezuela and Evo Morales of Bolivia, he sometimes seems almost a conservative.

Mr. Lula da Silva is so popular that polls indicate he could win the election outright, without the need for a runoff. His biggest supporters are those he promised to defend from his first day in office: the extremely poor, a class from which he rose years ago.

“Lula da Silva represents the emergence of social sectors that Latin American society had excluded,” said Sergio Bitar, an aide to Chilean President Michelle Bachelet, another recently elected socialist. Mr. Lula da Silva’s own origins and his emergence indicate a deeper democratization in Latin America, and that is something we should value and support, the Chilean aide said.

A former shoeshine boy and grade-school dropout, Mr. Lula da Silva won the presidency on his fourth try as a legitimate champion of the left. But as president, blithely dismissing all evidence to the contrary, he insisted he had never been a leftist.

“I am a lathe operator,” he told an interviewer.

Economic orthodoxy

His mentor, the Dominican friar Carlos Alberto Libanio Christo, said that during two years as Mr. Lula da Silva’s special secretary, “I never heard the words socialism or socialist.”

“His government only had eyes for orthodox economic policies and balanced budget,” he wrote in a book about his experience in government.

Mr. Lula da Silva’s turnaround was particularly clear in the financial area. As an opposition leader, he struck a tone of Third World defiance by urging Brazil to renege on its foreign debt, pointing at the International Monetary Fund as one of the nation’s enemies. As president, he restrained public spending and generated budget surpluses sufficient to pay off the whole $15 billion still owed to the IMF in one installment.

Mr. Lula da Silva even went after comrades from the early years of the leftist Workers Party, which he had founded to oppose the 1964-85 military regime. A half-dozen leftist congressmen were expelled when they stridently opposed radical reform of a pension system chronically in the red.

It was a turning point. Double-digit inflation receded to 3.8 percent, one of the lowest rates in Brazil’s history, and Brazil’s currency, the real, gained steadily in dollar terms.

Government in turmoil

But Mr. Lula da Silva’s government has been engulfed in corruption charges. The Workers Party was accused of bribing congressmen to support government bills. Jose Dirceu, a powerful minister and former guerrilla, was expelled from his congressional seat. Finance Minister Antonio Palocci was forced to step down.

Just before the election, Mr. Lula da Silva had to replace his campaign manager and party president, Ricardo Berzoini, after party officials reputedly tried to buy documents incriminating a leading opposition politician.

Mr. Lula da Silva has repeatedly denied knowledge of any wrongdoing, but if Brazil’s nonpartisan Supreme Electoral Tribunal finds he broke the law in the documents case, he could be removed from office.

Despite the furor, a poll by Vox Populi published Thursday showed Mr. Lula da Silva with 51 percent — enough for a first-round victory over chief rival Geraldo Alckmin with 27 percent. The margin of error was given as 2.2 percentage points.

Mr. Lula da Silva’s strength rests on his social programs. In a Datafolha poll early this month, 48 percent said Mr. Lula da Silva would defend the poor better than Mr. Alckmin, who received 19 percent.

Honest about poverty

“He is the only Brazilian politician who, when speaking about poverty, is completely honest,” said Antonio Delfim Neto, a minister during the dictatorship who later became Mr. Lula da Silva’s friend. “In all politicians the idea of caring about the poor is cynical. In Silva, it is real.”

Mr. Lula da Silva won international applause for his deft macroeconomic maneuvering and his political drift to the right.

Outside of Brazil, politicians tried to tie themselves to Mr. Lula da Silva. Mexican presidential candidate Andres Manuel Lopez Obrador compared himself to the Brazilian president but lost the election by a hair after ads compared him to more radical Venezuelan President Hugo Chavez.

Mr. Chavez has thrown his support behind Mr. Lula da Silva, telling supporters recently: “He will win. He is already winning.”

But a key Chavez ally, Bolivian President Evo Morales, threw a challenge at Mr. Lula da Silva when he nationalized Brazilian natural gas installations, then confiscated two Brazilian refineries. Opponents said Mr. Lula da Silva was too soft on Mr. Morales for ideological reasons, but hours after a stern warning from Mr. Lula da Silva, Mr. Morales suspended the decree.

Mr. Lula da Silva’s change in style did not mean he embraced the politics of the Bush administration in Washington. He clashed head-on with President Bush over a U.S. proposal to create a continental free-trade area, calling it a U.S. scheme to annex Latin America.

Largely because of Brazil’s opposition, the free-trade area never took off.

Meanwhile, despite U.S. warnings that Brazil risked isolation by spurning the free-trade plan, Brazilian exports soared to record levels and monetary reserves rose to a solid $72.8 billion.

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