Wednesday, October 17, 2018
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Lula´s new balancing act
José Pedro Martins
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In his second term, president expected to intensify his focus on the poorest Brazilians.

Running Latin America’s largest economy so that economic growth continues while improving income distribution will be the biggest challenge facing President Luiz Inácio Lula da Silva in his second term as Brazil’s leader.

Lula’s was re-elected in a second-round runoff Oct. 29 with 58 million votes, or nearly 61 percent support, topping Geraldo Alckmin of the Brazilian Social Democratic Party, who received just 39.2 percent of the votes.

The results represent widespread support for Lula ahead of his 2007-2010 term, but the electorate expects him to fulfill his hefty agenda.

Brazil "is now prepared to grow at least 5 percent annually" during his second term, Lula said shortly after he was declared the winner. Brazil’s economy grew an average of 2.5 percent annually during his first term.

Inflation is also under control at an annual average of 6.9 percent during Lula’s first four years, compared to an average inflation rate of 9.1 percent during his predecessor, ex-President Fernando Enrique Cardoso’s (1995-2002) eight years in office. Brazil’s reserves increased from US$35 billion in 2001 to $70 billion in 2006, and exports grew from $73 billion in 2003 to $118.3 billion in 2005, though he plans to increase this figure.

Interest rates, at 19.6 percent per year between 2003 and 2005, a drop from the average of 27 percent per year during Cardoso’s administration, still need improving. The tax burden is close to 35 percent of the gross domestic product, one of the highest in the world. But the internal market needs strengthening by providing better economic conditions to the poor and middle classes.

Ensuring stable growth

Lula must now ensure sustainable growth for Brazil, in all senses of the word. National patrimony such as country’s vast Amazon rainforest must be preserved, even though deforestation has slowed in recent years. The country has such a wide array of natural resources that it can produce a new development model, including sustainable energy, such as biofuel and solar and wind power, with its impressing biomass, year-round sunshine and more than 7,000-kilometer (4,400-mile) coastline.

Another factor that will help Lula achieve these lofty goals over the next four years is the broad support he gained in regional gubernatorial elections, something he lacked when he began his first administration in 2003. Of the 27 elected governors, 18 are members of his Workers’ Party, or support his policies.

And despite the corruption scandals that rocked his party, the Workers’ Party bloc in Congress was only reduced slightly, and was the second-most voted party for federal deputies.

This will help Lula carry out the reforms Brazil needs, he noted after he captured the second term, and education system improvements are high on his list of priorities.

"Brazil must guarantee that all children born today have a complete basic and secondary education until 2022; that’s our goal," said businessman Luis Norberto Pascoal, one of the leaders of the "Everyone Committed to Education" initiative that includes business and nongovernmental organizations, which was launched in late September when education became a hot topic in the presidential campaigns. "Without quality education, Brazil will be unable to face the challenges of the 21st century."

Lula also plans to improve during his second term the "Family Purse" program, which provides financial assistance to 11 million families, or close to 20 million voters. Federal monies in the form of $45-stipends are provided to families that earn less than $28 per month. At the end of 2006, the program will have cost Brazil more than $3.4 billion. Many analysts have said that the initiative boosted Lula at the polls, along with a 45-percent increase in the purchasing power of families who live on minimum wage of close to $145 per month. With improved buying power, families could more easily meet their basic needs.

But despite its successes, it is accepted that the Family Purse program needs to be adapted to include more encouraging policies to spur income growth such as microcredits, cooperatives, an improvement to the University for Everyone (ProUni) program, and technical schooling, with a particular focus on Brazilian youths, the most susceptible sector to unemployment.

Useful training

The goal is not simply to maintain the poor families who are dependent on the Family Purse program, but instead to provide useful training for them to join the workforce. ProUni has allowed to 400,000 low-income youths to attend university, a strong figure, but high-quality education is also on the list of goals.

"Our people’s suffering continues to be widespread. Unemployment, illiteracy, violence, ignorance, prejudice and corruption continue to destroy entire communities. Youths are lost, families are dislocated and people with AIDS are abandoned, the sick without resources. A climate of chaos, sadness, desperation reigns," said Father José Trasferetti, president of the Brazilian Moral Theology Society.

In order to battle these realities in his second term, many analysts say that Lula should be guided by ethics on the management of public affairs. If new scandals arise, the political base the president acquired Oct. 29 will erode.

The Brazilian Social Democratic Party "will run a responsible but vigilant opposition, attentive to the behavior of the federal government in all aspects related to ethics," said federal re-elected Dep. Carlos Sampaio, of that opposition party, in São Paulo.

Latinamerica Press / Noticias Aliadas
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