Brazil hates to bid Lula farewell

By Chris Kraul, Los Angeles Times

Oct. 2, 2010 12 AM PT

Reporting from Bogota, Colombia — When former shoeshine boy Luiz Inacio Lula da Silva was elected Brazil’s president eight years ago, some feared he would lead the country to ruin.

Now, having steered a booming economy through the global crisis and outdueled the U.S. to host the 2016 Olympic Games, the onetime union organizer is preparing to leave office praised by world leaders as disparate as President Obama and Venezuela’s Hugo Chavez.

Brazilians will vote Sunday for a successor to Lula, who will leave a country much more prosperous and more equal than the one he took over in January 2003. Lula has also raised Brazil’s international profile.

To say Brazilians are happy with him is an understatement: He enjoys an 80% approval rating. Nothing so demonstrates Lula’s popularity as the likelihood that his handpicked candidate, former chief of staff Dilma Rousseff, will be elected Brazil’s next president despite never having held elective office or giving many clues as to her policy initiatives — other than to continue Lula’s. If elected, she will be Brazil’s first female president.

Despite Lula’s successes, whoever follows him will have plenty of work to do.

Even with the highest tax rates in Latin America, Brazil doesn’t have enough money to fix its roads, ports and railways. Education and health services are weak, and red tape and corruption make Brazil one of the hemisphere’s least business-friendly nations. High crime, particularly in Rio de Janeiro, host city of the 2016 Olympics, is a continuing blight.

Still, the majority of Brazilians would say that Lula, 64, has been a highly successful president.

“This is a good moment for Brazil, and therefore people want continuity. And Dilma symbolizes continuity,” said Rio de Janeiro-based political analyst Amaury de Souza, when asked to explain Rousseff’s lead in the polls.

The admiration stands in stark contrast to the days when financier George Soros warned that electing Lula would be a catastrophe. In 2002, Brazil was beset by a power crisis, a recession and crushing foreign loans. Some feared that Lula, a former metalworker whose formal education stopped at the fourth grade, would make a bad situation worse.

“Everyone thought Lula would do crazy things, like default on Brazil’s debt,” said Aldo Musacchio, a professor of economic history at Harvard University.

But Lula proved a shrewd policymaker. He paid down the debt. He appointed Henrique Meirelles, a former head of Fleet Bank and member of the opposition party, to run Brazil’s central bank. And he continued the cleanup of Brazil’s bloated finances that had begun under his predecessor, Fernando Henrique Cardoso.

“Instead of coming in and changing the rules of the game as everyone expected, Lula accepted restrictions on his economic policies,” said Sebastian Briozzo, an economist with Standard & Poor’s in Buenos Aires.

With growth expected to top 7% this year, Brazil is leading Latin America out of the global financial crisis and foreign investment is flooding in.

His expansion of the Bolsa Familia program, under which 15 million poor families receive a monthly payment of up to $70, has reduced poverty. The percentage of Brazilians living in poverty has dropped from 28% to 16% during his tenure, and millions have moved into the middle class.

But in addition to being good, Lula was lucky.

Cardoso had already implemented many of the toughest reforms. Lula governed during a decade that saw skyrocketing global demand for Brazil’s commodities, including soybeans, iron ore, beef, sugar and coffee.

Then, in 2007, one of the world’s largest oil discoveries of recent years was made in deep waters southeast of Rio de Janeiro, a find that Lula declared was so rich it would finance the country’s infrastructure expansion for decades.

The Lula charisma has also been a factor. It allowed him to build consensus in a country where people innately regard politicians as inept, corrupt or both.

“When you think of leaders of democratic nations in recent epochs, few of those came from working-class backgrounds or had lived the life of a poor person — as Lula had,” said Kenneth Maxwell, former head of Brazil studies at Harvard. “No one should underestimate what he brought to the presidency.”

Typical of Lula’s supporters is college professor Wagner Belmonte, 41, a member of Brazil’s upper-middle class whose daughter goes to private school. Belmonte once had strong reservations about Lula, but the president’s combination of fiscal conservatism and social conscience changed his mind.

“I will vote for him forever — for him, Dilma and whoever he supports to continue his work,” Belmonte said. “I hope he comes back to run in 2014, because he will get a standing ovation.”

Kraul is a special correspondent. Special correspondent Marcelo Soares in Sao Paulo contributed to this report.