Francisco José Moreno and Alejandro Eggers Moreno Pacific News Service Wednesday, Nov. 6, 2002

Calling Brazil's new president a leftist is far too simplistic, write PNS contributors Francisco José Moreno and Alejandro Eggers Moreno. In fact, the former metal worker's election is a clear demonstration of the changing face of Latin American politics, where nationalism and globalization are becoming more important terms than "left" and "right."

Headlines across the world shout about Brazil's new "leftist" president. But Luis Inácio Lula da Silva won a landslide victory in Latin America's largest economy by blurring traditional ideological boundaries and forming a broad-based, nationalist coalition of Brazilians ready to take on U.S. economic priorities and global financial institutions.

Lula's success is a clear demonstration of the changing face of Latin American politics. The traditional struggle between conservatives, backed almost unanimously by business and financial leaders, against socialists or populists supported by the working class is giving way to a new conflict. This conflict is between those committed to preserving national interests and those willing to accede to the demands of international financial institutions.

During the course of the campaign, Lula softened his staunch left-wing views and moved toward a more moderate, business-friendly position. He chose Jose Alencar, a millionaire textile magnate, as his running mate. He promised to uphold Brazil's international commitments and rejected a moratorium on foreign debt. He sought and won the support of numerous business and financial leaders, and proposed the formation of a Council of Economic and Social Development with representatives from business, trade unions and other sectors of society to negotiate a new social contract.

At the same time, Lula did not deny his dislike for the finance-oriented market policies driven by the International Monetary Fund (IMF) and other global institutions. He repeatedly denounced the current economic system and insisted he would under no circumstances support the U.S.-backed Free Trade Agreement of the Americas, claiming the proposed hemispheric free-trade zone would essentially signify the American annexation of Brazil's economy. Global free trade models, he said, would only become viable when all countries have equal opportunities and conditions to become competitive.

This is how did Lula managed to reconcile his seemingly leftist economic views with his newfound friendliness toward business leaders.

The demands of the international financial community over the past decade, specifically the strong emphasis on finance over production, has put Brazil in the position where the interests of most local businessmen, many local investors and middle-class professionals are beginning to coincide with those of the workers. The IMF-backed policies of recent years have been designed to pour money into the country, regardless of how it is used or distributed.

As a result, most of the money has turned to profits for foreign corporations or gone to the richest Brazilians, and much has been taken out of the country for investment elsewhere. Little attention has been paid to actually strengthening the ability and capacity of the Brazilian economy itself, leaving in the lurch all but the largest businesses, all the workers and most of the professionals who serve them.

So when Lula talks about how Brazil's problems go beyond its debt and that the country needs to focus more on boosting imports, creating jobs, and stimulating local business, he speaks for a wide range of Brazilians, employers and employees alike.

He reframed the election from a contest between the left and the right to a struggle over who gets to determine Brazil's future – the U.S.-led global financial community, or Brazil.

It is not difficult to explain how Lula secured such a large percentage of the vote. Unlike other recently elected leftist leaders in the region – Hugo Chávez in Venezuela, for example – Lula's popularity does not stem from a personality cult or an overwhelmingly destitute population desperate for any kind of change. He has been very clear that he has no interest in a Chávez-style popular revolution, and there is no indication that Brazilians would have any interest in such a change.

Lula managed to gain the support of his old enemies because he is no longer seen as protecting the poor against the abuses of businesses, but as protecting Brazil against the abuses of the United States and the financial policies it sponsors. Yet Lula's blurring of traditional liberal-conservative ideological distinctions in favor of a common nationalistic outlook is not limited to Brazil. In Argentina, for example, the financial crisis has polarized the country into pro- and anti-IMF camps, the latter including workers and business owners.

As Latin America continues to reject the economic model that has been foisted upon it during the past decade, politics will increasingly take this form in the rest of the region.

FRANCISCO JOSE MORENO, Ph. D., President of the Strategic Assessments Institute; former Vice-President of Philip Morris International; former Professor and Chairman of the Political Science Department at New York University; former Lecturer in Economics at the University of California, Berkeley; author of three books and over 30 academic articles; has served as adviser to two European Prime Ministers and four Latin American Presidents.

ALEJANDRO EGGERS MORENO, (Groton and Stanford) Vice-President of the Strategic Assessments Institute; contributor to the Christian Science Monitor and the Pacific News Service; former correspondent of the Información Newspapers.

E-mail: sai@strategicassessments.com

Venezuelan Strikers Disagree as President Seeks Brazil's Help By Harold Olmos Associated Press Friday, January 3, 2003; Page A16

BRASILIA, Jan. 2 -- President Hugo Chavez of Venezuela said today that his country's oil industry, crippled by a month-long general strike, is recovering and will reach its pre-strike capacity in 45 days. Domestic opponents said the claim was false.

Chavez made the comments in Brazil, where he was attending the presidential inauguration, despite the turmoil of a strike led by opponents who seek to remove him from power.

Chavez met with Luiz Inacio Lula da Silva, who was sworn in as Brazil's president Wednesday, and asked him to send experts from Brazil's state-owned oil company to replace some of the 40,000 Venezuelan state oil company workers who have walked off the job.

After a breakfast with Silva, Chavez said the Brazilian president said he would consider the request and discuss it with the new head of Brazil's oil company, Petrobras.

Chavez has fired dozens of striking managers from the state oil monopoly, Petroleos de Venezuela SA, and sent troops to guard installations across the country. He insisted that replacement workers were slowly bringing refineries and oil wells back online.

Chavez said Venezuela is now producing 800,000 barrels a day, up from the 200,000 barrels at the country's lowest level of production.

In Venezuela, opposition leaders disputed Chavez's claim and said most of the industry's workers remain off the job. Strike leaders insist the government will not be able to restart operations without them.

Also, opposition estimates of current oil output were at odds with government assertions. There was no way to independently reconcile the figures.

Venezuela's Democratic Coordinator -- a coalition of opposition parties, business associations and labor unions -- insisted output was only 190,000 barrels per day and that natural gas production was down by 80 percent.

The strike, which began Dec. 2, has forced motorists to line up at service stations for hours. Store shelves were increasingly bare.

The oil industry represents 30 percent of Venezuela's $100 billion gross domestic product and 70 percent of exports. Venezuela is the world's fifth-largest oil exporter and a major provider to the United States. The strike has helped push international oil prices above $30 per barrel.

Negotiations sponsored by the Organization of American States were set to resume today after a brief break for New Year's. The main topic is the opposition's demand that Chavez submit to early elections or at least a nonbinding referendum on his presidency.

Chavez has vowed not to resign. He argues that Venezuela's constitution allows a binding referendum only in August 2003, halfway into his six-year term.

© 2003 The Washington Post Company

For the Chavez Problem in Venezuela - www.larouchepub.com

U.S. Presidential pre-candidate Lyndon LaRouche has expressed his concern over the dangerous and rapidly degenerating political situation in Venezuela, and in particular over the added complications arising from the highly unstable and erratic behavior of President Hugo Chavez. Chavez's apparent personal state of clinical insanity, represents a significant security threat to the Americas. This, added to the overall explosive situation throughout the hemisphere, threatens to become the detonator which sets off the entire bomb.

LaRouche emphasized that, in his capacity as a leading candidate for the Democratic Party nomination for the 2004 Presidential elections, it would be negligent on his part not to draw attention to this urgent matter, and to emphasize the urgency of choosing the best path towards its solution. There is substantial evidence that Chavez is actually clinically insane. This evidence, which we indicate below, must be duly assessed, LaRouche urged. If Chavez is as insane as appears to be the case, then a prompt, quiet, non-bloody solution must be found and agreed upon by the relevant parties, under which Chavez would be induced to step down from office, perhaps with the assistance of suitable friendly professional advice.

LaRouche emphasized that such an approach is called for immediately, lest others might concoct very bad alternatives to the current Venezuelan chaos, such as coups, assassinations, and other approaches that will only trigger a chain reaction and spread the problem across the region. LaRouche stated emphatically "We don't want an 'Allende solution' to the Chavez problem." LaRouche also rejected the idea, currently promoted by the Inter-American Dialogue and other bankers' think-tanks, of using the Organization of American States (OAS) to orchestrate a supra-national intervention into Venezuelan affairs, in violation of that country's national sovereignty. This mechanism was employed in 2001 by Wall Street and the U.S. State Department, in order to overthrow the Fujimori government in Peru, which established a terrible precedent for the hemisphere.

LaRouche reiterated that his policy for the Americas is in the tradition of John Quincy Adams, Abraham Lincoln, and Franklin Delano Roosevelt, where a community of principle among perfectly sovereign nation-states is the framework in which mutually beneficial economic development tasks are jointly undertaken. -

The Chavez Dossier - The essential evidence of Hugo Chavez's insanity is to be found in what masquerades as his "religious" or "theological" views. Typical were his heady remarks after his forces won 120 out of 130 seats for the Constituent Assembly in July 1999 elections: "The victory of the patriots has been pulverizing!... You are either with God or the devil, and we're with God because the voice of the People is the voice of God.... Now Chavez is not Chavez; Chavez is the People, and the People cannot be stopped! We'll win with God's favor and the People."

Before Chavez ever ran for President of Venezuela, Lyndon LaRouche identified the two years from 1992 to 1994, in which Chavez was jailed under horrendous conditions, as a critical period in turning Chavez from an ordinary fool, into a mental case, producing a "miraculous metamorphosis" in his world-view. The specific form of his insanity, became the text-book Romantic fascist dictum of Vox Populi, Vox Dei: "The Voice of the People is the Voice of God." The controlling sense of personal identity of victims of this outlook—such as Napoleon Bonaparte, or Adolf Hitler—is that of ethereal unity with "the People," and thus with "God." The victim thereby feels entitled to act like a Roman Caesar, displaying impunity and disdain towards other mere mortals.

Since assuming the Presidency in February 1999, at any point at which he has been challenged, Chavez has asserted that dictum, with increasing fervor, as justification for his decisions. When the courts overruled him, he asserted that he is bound by no law or institution, because he represents the People, and thus, by derivation, his is the Voice of God. As the crisis has grown, Chavez's assertion of "Vox Populi" has taken on increasingly "religious" tones, as the Venezuelan population, too, has become increasingly overtaken by charismatic religious movements of various denominations. Each of these reports hearing divine "voices" telling them what they must do—and each of which coheres, to an uncanny degree, with the role which the international oligarchical elites would have them play within their overall game-plan for Venezuela.

In April-May 2000, Chavez attempted to force the Catholic Church hierarchy to bow before him, arguing that "Christ was resurrected from the dead, to become the People," and since Chavez represents the People, he threatened to unleash "legitimate violence" against those in the Church who opposed him. In so doing, he presented himself as a died-in-the-wool Catholic. Then in January 2002, Chavez announced he had become a born-again (Protestant) Evangelical Christian, only to retract the statement four days later. Meanwhile, Chavez's disaffected wife, Marisabel Rodriguez, has shown up at born-again (Protestant) Christian rallies, to urge Chavez to mend his ways.

Chavez's most recent public display of clinical dissociation came in a rambling, five-hour presentation on his national TV/radio show "Hello, President," on Dec. 15, 2002. There Chavez ordered Army troops to ignore any rulings by the courts which were unfavorable to him, and to follow no one's orders but his own. As for those calling for his resignation, he retorted: "Chavez will leave only when God commands, because I am in the hands of Christ.... He is the commander, and when He speaks I obey, understood? And secondly, [I obey] the People. And I assume the voice of the People is the voice of God. I will not leave because of pressures from a group of businessmen, a group of coup-makers, a group of fascists."

From this substratum, numerous secondary expressions of Chavez's insanity are nourished, some of which have been noted in the public media. For example, The New Yorker magazine published a profile of Chavez in its Sept. 10, 2001 issue, written by Jon Lee Anderson, which contained a report on the author's interview with Chavez's psychiatrist, Dr. Edmundo Chirinos. Dr. Chirinos, who considers himself a supporter of the Venezuelan President, explained that Chavez "prefers to embrace dreams that seem impossible to achieve, rather than confronting the harsh realities of life." Anderson summarized Dr. Chirinos's description of Chavez, as "a hyperkinetic and imprudent man, unpunctual, someone who overreacts to criticism, harbors grudges, is politically astute and manipulative, and possesses tremendous physical stamina, never sleeping more than two or three hours a night."

Anderson also interviewed officials at the prison where Chavez was incarcerated in the early 1990s, including the secretary of the prison psychologist from that period. "Every morning, he [Chavez] sat in a chair in the open-air caged yard that had been built specially for him outside his cell," they reported. "There was a plaster bust of Simon Bolivar there, and he would speak to it." He would turn the head around to face him for the conversations, they reported. Anderson also noted that Chavez's aides today report that he is a "caffeine addict," who used to drink 26 cups of espresso a day, until his staff managed to wean him down to "only" 16.

This article appears in the November 8, 2002 issue of Executive Intelligence Review. by Our Special Correspondent www.larouchepub.com

The electoral victory of Workers Party (PT) Presidential candidate Luiz Inácio "Lula" da Silva, with more than 50 million votes—the greatest proportional vote in Brazil's history—confirms what had been evident from the first round of the elections: that the nation is avid for a change from the neo-liberal, monetarist economic model, which has been in force since 1990 and has brought about a state of public calamity: the highest unemployment in history, the destruction of the public and private patrimony, the abandonment of the main urban centers to organized crime, and the trapping of the nation in an out-of-control debt bubble, increasingly dollarized, which has brought Brazil—with its $500 billion in total foreign obligations—to the brink of default.

The big question now, is whether the Lula government will represent a genuine transformation, or if all the hope his candidacy has engendered will be betrayed by continuing the policies of the previous administrations, albeit with a "social democratic" façade. Worsened by the terminal crisis of the international financial system, this would be a bitter deception.

No Compromise Possible

As is widely known, all of the campaign promises of the President-elect, especially those related to the generation of 10 million jobs, recovery of industrial and agricultural capabilities, reinforcement of social programs, and an increase in wages, are openly contradictory to the commitments and agreements made with the International Monetary Fund (IMF) and the international creditor banks. Today, for example, the liquid debt of the public sector is nearly 65% of the Gross Domestic Product, which means that merely servicing that debt will wipe out any effort to direct the resources of the national budget into the promised projects for recovery. The commitment to continue with the IMF's policies of fiscal austerity means complying with the new demands to raise the primary budget surplus (all of the budget excluding debt payments) to a level equivalent to 5% of GDP, a dramatic increase in sacrifice required, from the current level of 3.8%.

Thus, any effort to fulfill Lula's campaign promises will necessarily lead to a rupture with the collapsed world monetary system, and with the whole system of globalization. As several political analysts in Brazil have already noted, the only way that the new President will not disappoint his electorate, would be that he step forward as the true leader of the nation, and announce the impossibility of maintaining the genocidal agreements with the IMF and the sacrifice which that would mean for the population.

If Lula opts for temporizing, and imposes even greater fiscal austerity, however, he will compromise the social stability of the country, since there is no way that his promises can be met through submission to a so-called "globalization with solidarity"—a euphemism for trying to accommodate the Marxist belief structure of important sectors of the PT, within the hegemonic global order.

London and Wall Street are applying brutal pressure upon Brazil, demanding that the President-elect immediately name his finance minister and central bank president, and that the team make clear that it will implement an even more harsh austerity than the outgoing Cardoso government could. As the investment firm of Morgan Stanley bluntly put it: "Delays in the commitment to a more severe fiscal policy will negatively affect the market." Because there "is a very real risk of default," the London Times editorialized on Oct. 30, Lula must use his broad base of support to "sell difficult reforms" to both the elites, as well as the impoverished millions who voted for him. So, too, the same day, the Washington Post threatened that if Lula follows the wrong policies, he could "trigger a messy debt default [which] would be a disaster for Brazil, and especially for Mr. Da Silva's supporters."

Yet, if a break with the system is not concretized by the new government in its first few months, the disillusion of the electorate will be as great, and as resounding as Lula's election victory itself. It will leave the country at the mercy of the radicals within the Workers Party, and of Jacobin groups such as the Landless Movement (MST), which, together with a constellation of non-governmental organizations and groups linked to the World Social Forum, will unleash the hordes which Italian terrorist Antonio Negri speaks of in his book Empire, the bible of the Pôrto Alegre World Social Forum. MST leader João Pedro Stedile interprets Lula's election victory as a product of "the people's mobilization," and has already announced that he will mobilize his base to keep up the pressure on the next government. Behind the demagogy, is a project to finish the destruction of the sovereign nation-state, in submission to the emergence of an Anglo-American world empire.

It is important to note that the strategy of the international financial oligarchy is to intentionally provoke chaos, as a means of bringing about the disintegration of the nation-state and its institutions. The international creditors are fully aware that their efforts to collect a debt which is physically uncollectable, will unleash chaos. And they have their controlled movements, such as the MST, to guarantee these results.

A Mandate to Save the Nation

The "Utopian" faction inside the U.S. government has circulated the rumor that, with Lula's election, Brazil will join an Ibero-American "axis of evil," which includes Cuba and the Venezuela of Hugo Chávez. But Brazil is not Venezuela, and Lula is not another Chávez—no matter how they both dub themselves leftists. Chávez is a philosophical fascist, with his expressions of extreme Jacobinism and his explicit defense of Carl Schmitt, the brains behind Adolf Hitler's "legal system." Lula is something else: He has formed a broad national coalition, which undoubtedly includes radical Chavista elements (the MST, for example), but which also includes genuinely nationalist elements—and what direction this coalition will ultimately take has yet to be defined.

No one, either inside or outside Brazil, should fool themselves about the real message delivered at the polls: The Brazilian electorate voted for a political figure who embodied the aspiration for a decisive change from the status quo, and not specifically for a political party, much less for the radical factions inside the PT. This is clearly seen in the defeats suffered by the PT in gubernatorial contests for the most important states in the country, above all, the largest: São Paulo, Minas Gerais, Rio de Janeiro, and Rio Grande do Sul.

The defeat of the PT in its bid to re-elect its governor of Rio Grande do Sul, is particularly significant, because that state became the headquarters of the World Social Forum under the PT, and that is where the MST conducts its most bellicose actions.

Likewise, the record, 1.56 million-person Congressional vote for Dr. Enéas Carneiro, a nationalist who has campaigned unwaveringly for 13 years on the grounds that Brazil can only survive and develop if it breaks with the IMF, reflects the same message. Dr. Enéas, who hosted Lyndon LaRouche's visit to São Paulo in June, is no Jacobin. As he told Folha de São Paulo, on the eve of the second election round: "I will be on the side of the President, whoever is elected, in everything which favors the population, and against all those actions which are against its welfare.... The polarity today is between the globalized world and the sovereign nation-state. My group defends the existence of the sovereign nation-state, and this will be our fight."

And so the new President was sent the following message: The country hopes that the necessary break with the neo-liberal economic model will not mean a new Jacobin-style "French Revolution," but rather a defense of the sovereign nation-state. This historic crossroads cannot be avoided, for it is the same that today faces the entire world. It is necessary that the President-elect understand this message well, for Brazil to maintain even minimal institutional stability over the coming months.

BY CARLOS A. DEJUANA Reuters www.bayarea.com SAO PAULO, Brazil - Luiz Inacio Lula da Silva makes his first trip abroad as Brazil's president-elect this week, traveling to Argentina and Chile to strengthen regional ties before a U.S. visit a week later.

A little more than a month after his election victory, the trip will be a test of whether the former union leader can recreate his surprising success at home on the international front. He leaves for Buenos Aires on Sunday night.

Throughout his campaign Lula stressed the importance of rebuilding trade links between Brazil and its Latin American neighbors, which are comparatively small and have been hit recently by economic and political turmoil.

"It's a reaffirmation, a reconsolidation of the entire regional trade bloc," said Marcelo Salomon, chief economist at ING Bank in Sao Paulo.

Lula and a small team of advisors are scheduled to meet with Argentine President Eduardo Duhalde on Monday and Chilean President Ricardo Lagos on Tuesday. He will meet with President Bush on Dec. 10.

FREE TRADE NEGOTIATIONS

At the heart of Lula's determination to strengthen South American ties is the desire to put up a common front against the United States in negotiations to create a free trade area that would stretch from Alaska to Argentina.

Lula has made it clear that Brazil, which is by far the region's largest economy and the linchpin in the proposal, will fight a tough battle to make sure its exporters get as good a deal as U.S. companies. Brazilians have long been irked by U.S. tariffs that put limits on key exports such as orange juice, sugar and textiles.

But cementing trade ties with some neighbors like Argentina will be difficult given the region's economic woes and political instability. Argentina, whose economic crisis the past two years battered Brazil and Paraguay and crippled the Uruguayan economy, will have elections in April of next year.

And trade relations between those four countries that make up the Mercosur trade bloc have already been strained by ongoing commercial spats.

Brazilian exports to Mercosur fell by more than half to $2.7 billion, or 5 percent of the total, in the 10 months to October this year compared with a year earlier.

Still, analysts say a united bloc will give the region more leverage in the negotiations.

"What (Lula) wants to say is that Mercosur is important and that, despite the difficulties, it's going to continue to be important, and that's key in trade talks with the European Union and United States," said Ricardo Caldas, a political scientist at the University of Brasilia.

RIDING HIGH AT HOME

At home, Lula has been beating expectations, say analysts.

Lula and his transition team have proved to be more fiscally conservative than expected by anxious investors, fueling a small recovery at Brazilian markets that were earlier battered by worries the former metalworker would mismanage the economy.

The benchmark Bovespa stock index rallied 3.4 percent in November, and the country's much maligned currency, the real, has been trading steady since the election after taking a beating for months.

Moreover, Lula has struck governability deals with political rivals and held off the radical wing of his leftist Workers' Party, known as PT, pleasantly surprising even his harshest critics.

"One of the key challenges for the PT government will be overcoming the credibility deficit they have with the market, and they have been doing that very well," said Christopher Garman, a political analyst at Tendencias, a Sao Paulo consulting firm.