By Roger Burbach, AlterNet October 29, 2002

On Jan. 1, 2003, Luis Inacio Lula da Silva – elected in a landslide victory with over 61 percent of the vote – will become president of Latin America's largest country. Lula, as he is commonly known, received three million more votes for president than George W. Bush did in the United States in 2000.

Leonardo Boff, a progressive theologian in Brazil, declares that Lula's triumph represents "the victory of a project from below, one of the poor." Lula's first act as president-elect was to create the Secretariat for Social Emergencies. Its primary responsibility is to end hunger and malnutrition among more than 20 million Brazilians.

"If at the end of my presidential mandate every Brazilian has three meals a day then I will have realized my life's mission," proclaimed Lula.

This was Lula's fourth run for president. In this campaign he abandoned much of the leftist platform of previous campaigns, forging an alliance with more centrist political forces. This shift is symbolized by his choice of vice-president, Jose Alencar, Brazil's largest textile magnate and a leader of the centrist Liberal party. Alencar declares that the alliance is the product of a "novel political society," reflecting a new social pact, "where Lula represents labor and I represent capital."

Asked why he accepted the position of vice president, Alencar notes: "In the history of civilization labor came first, and then capital. And also in my personal history...it was labor that built my capital."

But it is an open question whether the United States and international bankers will adopt as enlightened a position as Alencar. Brazil has a public debt of $240 billion, the largest in Latin America. In the run up to the election on Oct. 27, foreign capital began to flee Brazil, leading to a depreciation of the country's currency, the Real, by over 40 percent. Much of Lula's campaign questioned the free trade policies launched under the "Washington Consensus" during Ronald Reagan's administration in the 1980s. The consensus has meant not only the opening of Latin American markets to U.S. trade, but also the privatization of state enterprises and the slashing of social spending in health and education.

According to a Brazilian financial advisory firm, ABM Consulting, the 10 largest banks in Brazil, including Citibank and BankBoston, earned returns of 22 percent on their holdings in Brazil in 2001 compared to 12 percent on a global level. George Soros, a forward-thinking international financier with significant holdings in Brazil, declares: "The system has broken down;" it "does not provide an adequate flow of capital to countries [like Brazil] that need it and qualify for it."

In its initial response to Lula's victory, the Bush administration declares it "looks forward to working productively with Brazil." But even before Lula's victory, the U.S. Under-Secretary of the Treasury, Kenneth Dam, stated, "we have a contingency plan" if Brazil declares a moratorium on its international debt.

Dam provided no details, but the International Monetary Fund (IMF), the leading financial institution backing the position of Washington, moved to lock the future government of Brazil into an economic straightjacket when it loaned $30 billion to the outgoing government of Fernando Henrique Cardoso in an attempt to prop up the Real.

Only $6 billion will actually be spent under Cardoso, while the remainder will be released to the incoming government if it has a budget surplus of 3-and-a-half percent. No government in South America has achieved such a surplus in recent years.

Right-wing pundits and policy strategists in the United States have already begun to criticize the Lula government. Constantine Menges, a Senior Fellow of the Hudson Institute who served as the Latin American adviser in the National Security Council under Ronald Reagan, recently released the study: "A Strategic Warning: Brazil." In it he decries the "Castro-Chavez-Lula axis" (referring to Fidel Castro of Cuba and populist president Hugo Chavez of Venezuela). Menges argues that these countries are "capable of pushing other South American countries to the Left and establishing a dangerous alliance with communist China, as well as with Iran and Iraq, two terrorist countries."

This would constitute a gigantic "South American Left bloc," which would have a domino effect in countries like Colombia, Bolivia, Ecuador and Argentina.

While Lula certainly is not intent on provoking the United States by consorting with Iraq, he is looking to other Latin American countries to strengthen an independent economic stance and to expand regional trade agreements. His first international trip will be to Argentina, which has defaulted on its international debt and is Brazil's leading partner in the regional trade bloc known as Mercosur.

Lula has made it clear that he will not support the trade initiative of the Bush administration, the Free Trade Area of the Americas (FTAA), unless the United States abandons trade policies that discriminate against Brazil. Among other provisions, the FTAA advocated by the United States envisions the protection of Florida orange juice interests and Midwest soybean producers along with U.S. steel exporters. Brazil is the world's largest exporter of orange juice, a leading exporter of soybeans and also exports large quantities of steel. (Interestingly, Lula began working in the metallurgical industry when he was just 14 years old.)

If there is one position Lula consistently articulated in this presidential campaign, it was his call for "expanding Brazil's productive capacity." In his last presidential debate with Jose Serra, who represented the outgoing government, Lula stated: "Brazil is a great country. It has enormous resources that we have not even begun to turn to the benefit of our people."

The day after his election Lula proclaimed that budgetary restrictions would not prevent him "from expanding social programs," decreasing unemployment and "expanding educational opportunities for Brazil's poorest."

Roger Burbach is co-editor, with Ben Clarke, of "September 11 and the U.S. War" (City Lights, 2002), and author of the forthcoming book, "The Pinochet Affair: Globalizing Human Rights." He is director of the Center for the Study of the Americas (CENSA) in Berkeley, Calif.

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WHAT a mess in Venezuela. 2003-01-04 www.newsok.com

A national strike that began Dec. 2 is entering its second month, its organizers -- an unusual alliance of business and union leaders -- calling for an immediate referendum on President Hugo Chavez's continued rule.

The stoppage has put hundreds of thousands of Venezuelans in the streets in a stormy atmosphere the Los Angeles Times likened to a chair- throwing episode of "Jerry Springer."

Some are protesting Chavez's dabbling in Cuban-style socialism and an economy in recession. Others are marching in support of the president, who claims he is trying to distribute the country's oil wealth to the poor, which make up about 60 percent of the population.

Venezuela's oil industry, the world's fifth-largest, has been crippled. Long gas lines are common in Caracas. Recently the unthinkable occurred: importation of gasoline from neighboring Brazil. The U.S., which gets about 15 percent of its oil from Venezuela, is watching carefully.

The Bush administration has been criticized for meeting with members of Chavez's opposition. It was no more than a pro forma meeting, standard practice for U.S. governments, but still it drew a letter of protest from a handful of Democrats.

"While the Venezuelan president is trying to confiscate property, militarize the civilian government, take over the labor unions and squash a free press, congressional Democrats believe the biggest threat to life and liberty in Venezuela is America," the Wall Street Journal editorialized.

Others are criticizing the administration for not doing enough.

President Bush is taking the proper course for now: maintain contact but at a safe distance.

Venezuela's stalemate is largely Chavez's own doing. According to the country's El Nacional newspaper, 67 percent of those who supported Chavez now think there should be a new election.

America should let the Venezuelan drama run its course and stand ready to assist responsible leaders when the dust settles.

Calgary Herald Saturday, January 04, 2003

Brazilian President Luiz Inacio Lula da Silva plans to keep Petroleo Brasileiro SA exploring for new oil reserves at home and abroad, as the state-run producer strives to end the country's dependence on imports.

Petrobras' new president, Jose Eduardo Dutra, said he would stick to company plans to spend $32 billion to boost oil output by almost half by 2006. Petrobras also will increase efforts to add reserves outside of Brazil, he said.

"This company has a strategy and it will be followed," Dutra said in a news conference. "We plan to complete our $32-billion expansion."

Lula, who took office Jan. 1, wants to use Latin America's largest publicly traded company to help meet his economic goals such as creating jobs, boosting demand for Brazilian goods and services and to contain inflation.

Petrobras produces about 1.7 million barrels of oil a day and is expanding output to reduce the country's oil deficit. Brazil today imports about 20 per cent of the oil it consumes.

The new government also plans to offer subsidies, low-priced credit and other incentives for local contractors to bid competitively on offshore oil platforms and other Petrobras projects, said Dilma Rousseff, Brazil's new mines and energy minister.

"This government is interested in strengthening national industry," Rousseff told a news conference. "We need to develop an industrial policy."

© Copyright  2003 Calgary Herald

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Chavez can call a “state of exception”, allowing him to suspend certain constitutional rights

CARACAS, January 4 (IslamOnline & News Agencies) – Clashes between supporters and opponents of Venezuelan President Hugo Chavez late Friday, January 3, claimed two lives and several more were wounded, as Chavez said that Algeria was sending petroleum experts to help jumpstart the country’s strike-crippled oil industry.

Snipers fired at anti-government demonstrators, police shot back and protesters from both sides hurled rocks at each other, witnesses and officials said, according to Agence France-Presse (AFP).

Pedro Aristumono told Globovision TV that two people died of bullet wounds in hospital following the violent clashes between supporters and foes of President Hugo Chavez.

Globovision earlier quoted firefighters as saying six people suffered gunshot wounds, 12 people were injured by rocks and bottles and another 75 were treated for teargas inhalation.

The reports came after Caracas metropolitan police fired live ammunition at snipers who shot into a crowd of anti-government protesters, while military troops repeatedly fired teargas and rubber bullets at pro and anti-government demonstrators.

The clashes further fueled tension as a crippling strike, led by rich businessmen, aimed at forcing Chavez, branded “voice of Venezuelan poor and needy”, from office entered its second month with no solution in sight.

The incidents started after hundreds of thousands of people marched in protest to the Fuerte Tiuna military complex, where tens of thousands of Chavez supporters, known as “chavistas,” staged a counter-demonstration.

The chavistas (allegedly) hurled rocks and bottles at the protesters, some of whom responded in kind. “Voice of Venezuelan poor and needy”, among his supporters

The protesters threw themselves to the ground as a first shot hit an 18-year-old paramedic, who suffered a flesh wound. A little later, an AFP reporter also saw a police officer fall to the ground after being shot in the knee.

Late in the day, as most protesters dispersed, a few from both sides engaged in running street battles, and at least two people fired revolvers from their windows toward the chavista camp.

Demonstrators at one stage prevented heavily armed members of the staunchly pro-government political police from entering a building where armed anti-Chavez protesters were hiding.

The opposition claimed 30 of its members were detained.

Alberto Carrillas, a leader of the pro-Chavez Tupamaro vigilantes told AFP: “We will take to the streets with or without arms, masked or not, whatever it takes to defend the constitution.”

However, strike leader Carlos Ortega denounced what he called “this criminal attitude by the current government against peaceful demonstrations.”

At the protest, architect Delfos Lopez claimed Chavez supporters “have been paid to come here, to spread terror.”

After 33 days of disruption, both sides were deeply entrenched in their positions.

Algerian Oil Experts May Help Clashes in Venezuela took a new bloody turn

Meanwhile, Chavez declared Friday that Algeria was sending petroleum experts to help jumpstart the strike-crippled oil industry, adding, however, that it was improving slowly but surely.

The state oil company Petroleos de Venezuela (PDVSA) was making progress “despite ... the complexity of the operations ... and ... the progressive way an operation of this type must be handled,” he told reporters.

“Nobody should think that an act of sabotage of the oil industry ... can be rectified in one day,” he said.

Chavez said he met Friday with an Algerian delegation headed by ministerial advisor Abdelaziz Djafri and a member of President Abdelaziz Buteflika’s cabinet, Djaballah Zatout, who said Algeria was ready to “do all it could to cooperate.”

Both countries are members of OPEC, the Organization of Petroleum Exporting Countries.

The Algerian delegation, he said, was to make a preliminary evaluation of Venezuela's oil situation, visiting refineries and other PDVSA installations, to gauge the compatibility of assistance that Algeria could provide.

State of Exception

Chavez Friday raised the possibility of calling a “state of exception” which would allow him to suspend certain constitutional rights, but said he did not intend to do so at this stage.

“If they force me to do it, I will, let’s hope that’s not the case,” he said.

The latest anti-government rally was in protest at what the opposition called the illegal house arrest within Fuerte Tiuna of a dissident general, one of about 150 soldiers who have declared themselves in rebellion.