Prospect of leftist winning in Brazil worries investors

Ex-labor figure is leading in election for president

October 04, 2002|By COX NEWS SERVICE

RIO DE JANEIRO, Brazil - He's a one-time fiery labor leader who has enlisted a conservative textile magnate as a running mate. He's a vocal critic of U.S. domination of Latin America but insists he won't bring radical change to South America's largest economy.

Luiz Ignacio Lula da Silva might be a mystery to many outside Brazil, but within this sprawling nation the man known simply as "Lula" is riding a wave of popularity as the front-runner heading into Sunday's presidential election.

The prospect of a victory by left-leaning Lula has spooked investors from Sao Paulo to Wall Street, sending Brazil's currency plunging, its stock market swooning and foreign investors looking for the exits.

"It looks as if Lula is on a roll, and that won't be comforting to Wall Street," said Riordan Roett, a Brazil specialist at the Johns Hopkins University. "I imagine we will see a great deal of volatility, at least until Lula announces who his economic team will be."

For months, opinion polls have shown Lula, 56, with a commanding lead over his nearest rivals, former Health Minister Jose Serra, of the centrist party of Brazilian President Fernando Henrique Cardoso, and Anthony Garatinho, a former state governor.

Some think Lula might win outright in Sunday's first round by receiving more than 50 percent of the vote, avoiding a runoff later this month.

Runoff or not, with Lula's standing in the polls holding steady, it seems likely that South America's largest nation might soon embark on a new era.

With the nation's powerhouse economy, huge and resource-rich national territory, and population nearing 200 million, the direction Brazil takes will be of vital concern across the region and in Washington

The victory would be a remarkable achievement for a man from humble origins, but it seems likely to leave U.S. policy-makers as nervous as Wall Street investors.

While pledging to meet Brazil's substantial debt payments, Lula has been lukewarm toward the Free Trade of the Americas proposal backed by Washington and has criticized Latin governments for their lack of independence in relations with the United States.

Then there are his decidedly leftist credentials and rhetoric. While claiming that he has matured and moved toward the center, Lula founded a political party with a red star as its logo. His campaign rallies routinely draw Communists flying the hammer-and-sickle flag and vendors selling posters of Latin America's revolutionary icon Che Guevara.

"I think Americans never attached much importance to Latin America," Lula told reporters recently. "I think [President] Bush even less - mainly because our leaders have been very servile to American policies."

The comments come against a backdrop of heightened worries about Latin America.

After a decade of U.S.-backed market reforms and democratic elections replacing dictatorships, the region is unsettled again, beset by war in Colombia, an economic meltdown in Argentina, recession in Peru and unrest in Venezuela.

In Brazil, unemployment and poverty have spawned an epidemic of violent crime. Rio de Janeiro state requested federal troops to ensure safe voting Sunday after a spree by criminal gangs shut down much of the city last week.

Many say Lula represents a common thread running through the region's unease: dissatisfaction with market reforms and privatization of state enterprises, which were supposed to bring economic prosperity but instead have resulted mostly in renewed questions about income disparities and U.S. domination.

In some ways, Lula's career represents a refreshing trend in Latin American politics: the rise of the common man, breaking the centuries-old domination of politics by tiny, rich elites.

Like Peru's new president, Alejandro Toledo, Lula rose from a peasant family and succeeded on the strength of his intellect, ambition and talent.

But while Toledo earned a doctorate in economics in the United States, Lula became a factory worker in Brazil's thriving industrial hub, Sao Paulo, losing a finger in a machine along the way.

In the turbulent 1970s, with Brazil ruled by a military junta, Lula's older brother became a communist and Lula himself plunged into union work. He led a series of wage strikes and was jailed by the military authorities.

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