www.forbes.com Reuters, 01.10.03, 11:34 AM ET  By Raquel Stenzel

TERESINA, Brazil, Jan 10 (Reuters) - Making good on a campaign promise to confront misery head on, President Luiz Inacio Lula da Silva took 30 of his top aides back home to Brazil's hardscrabble northeast on Friday to visit some of the nation's worst pockets of poverty.

Dubbed "the caravan of hunger," the two-day tour is intended to highlight Lula's anti-hunger program called "Fome Zero," or "Zero Hunger," that he has made his center-left administration's top priority.

Lula, Brazil's first elected leftist leader, kicked off the trip at the Irma Dulce shantytown in the city of Teresina, where he was greeted by thousands of residents, many bearing written requests on sheets of paper. One dweller, Lula said, asked for a soccer field. Another wanted a septic tank.

"A poor person is a poor person anywhere, but the truth is that you have poverty here that is worse than any other," said the former metalworker, his shirt soaked from the sweltering heat.

"You have a situation in which poverty stops being just poverty, and turns into misery."

Lula introduced his cabinet one by one like a rock star presenting his backup band before a short speech focusing on hunger and the rights of Brazilians to basic services like health and education.

Although in a better state than many other Brazilian shantytowns, or favelas, Irma Dulce is home to some 30,000 people who like nearly one in three people in Brazil are poor and have only limited access to basic sanitation, health and education.

Lula had originally planned to launch the Zero Hunger program during the trip but delays in putting it together have postponed its unveiling until later this month.

The details are still sketchy, but it will reportedly involve new measures such as food coupons and existing programs Lula says will be made more efficient.

LULA AT HOME The trip was Lula's first since taking office on New Year's Day. Although he has made a strong effort to put forth a statesman-like appearance, the 57-year-old of humble origins is at his most comfortable on the streets with the working class.

Even with a presidential security detail and bow-tied waiters with cups of water behind him, Lula still showed the common touch that gave him a landslide victory in October. He peppered his speech with words and phrases common in the northeast, where he was born, and stopped to talk to people and sign autographs.

"I really liked his simplicity. If it were a campaign, it would be another thing, but he's already been elected," said Joselino Rodrigues de Souza, a 29-year-old unemployed construction worker.

Lula was scheduled to fly to the city of Recife in his home-state of Pernambuco, where he will spend the night. On Saturday, he will visit a poor area in the state of Minas Gerais he dubbed the Valley of Misery during the campaign.

Friday January 10, 11:13 PM sg.biz.yahoo.com

RIO DE JANEIRO (Dow Jones)--Brazil's Petroleo Brasileiro (PBR), or Petrobras, said late Thursday it has postponed yet again tenders for the construction of two oil platforms.

Petrobras said in a statement that interested bidders now have until between Feb. 12 and 26 to hand in their proposals. The previous deadline was between Jan. 13 and 27 while the original date was Dec. 16.

The oil giant is tendering for construction of the P-51 and P-52 drilling platforms at a cost of $1 billion, according to market sources.

Petrobras said it was "complying with requests from interested bidders for the extension of the deadline for the delivery of the proposals."

President Luiz Inacio Lula da Silva, who came to power Jan. 1, has severely criticized the federally owned oil giant for ordering construction of oil rigs abroad instead of building them at home.

The controversy fanned nationalist sentiment in the last weeks of Brazil's presidential election campaign ahead of a final Oct. 27 vote. Lula and the former Petrobras' chief executive Francisco Gros engaged in a heated debate through local media about where to build the rigs.

Recent press reports suggested the extension of the deadline was political, but the company's chief executive Jose Eduardo Dutra said the decision came after potential bidders made the request for more time.

One platform, called P-50, was awarded in July to Singapore-based Jurong Shipyard, whose bid was $14 million lower than that of the Brazilian-Singaporean consortium FelsSetal.

If finished on schedule, the $496 million platform will go online in 2004, processing up to 180,000 barrels of oil a day in Brazil's rich offshore Albacora field.

The rigs are key for Brazil's goal of becoming self-sufficient in oil production by 2005, when domestic consumption could be as high as 2 million barrels per day. Brazil has won worldwide recognition for its deep-sea drilling technology.

-By Adriana Brasileiro, Dow Jones Newswires; (5521) 3288-5004; adriana.brasileiro@dowjones.com

www.falkland-malvinas.com Brazil’s new Foreign Affairs Minister and former Ambassador in London Celso Amorim said that doing everything possible to help Argentina, Brazil’s main partner in Mercosur, is a matter of solidarity but also of interest.

“For investors in foreign pension funds, Brazil and Argentina are the same, so the new Brazilian administration will have a more active participation in regional affairs, so long as we are asked to do so; we have no desire to interfere, but the current Brazilian process could be of inspiration for others”, said Mr. Amorim in an interview with the Argentina press.

Regarding Mercosur Mr. Amorim indicated that the ideal model should be based in a customs union, with free movement of people, capital, technology, so “we effectively become not only an economic space but a social space. This will enable us to jointly negotiate with other blocks and countries”.

Mr. Amorim anticipated the agenda for the coming visit next week of Argentine president Eduardo Duhalde to Brasilia to meet with counterpart Luiz Inacio Lula da Silva: “it’s an open agenda but priorities are the recovery of Mercosur, how to further advance in the integration of Mercosur with other blocks such as Free Trade Association of the Americas, the European Union, the Andean Group”.

“Distortions in Mercosur must be transitory, we must rapidly return to harmony, if not it won’t be a block. With out a clear understanding between Argentina and Brazil, there’s no Mercosur”, emphasized Mr. Amorim, adding that the Mercosur project is not only commercial but also political, and this means mending distortions in the Common External Tariff and creating supranational institutions such as a Mercosur parliament.

As to relations with the United States and the coming discussion involving FTAA, Mr. Amorim revealed that in talks with US Trade Representative Robert Zoellick Brazil pointed out that the incoming administration “can’t sacrifice the content of our proposal to a rigid timetable. We have to consult with industry, Congress and other sectors”.

However Mr. Amorim said the Lula administration was open to negotiate the FTAA, but Brazil is concerned about the size and of its industrial capacity, and “we’re going to defend our interests in the same way as the United States defends its own interests”.

Finally regarding the Lula administration’s foreign policy, Mr. Amorim stressed that a greater emphasis will be given to South America; a stronger stand in trade affairs, be it with the FTAA, European Union or the World Trade Organization, as well as reinforcing relations with other large developing nations such as South Africa, Russia, India and China.

www.falkland-malvinas.com US President George Bush announced this Thursday the naming of hardliner Otto Reich as “special envoy” to Latinamerica. Mr. Reich, born in Cuba and who until last November was Assistant Secretary of State for the Western Hemisphere, will report directly to National Security Advisor Condoleeza Rice.

This way Mr. Reich’s nomination avoids legislative confirmation. Last November Mr. Reich was forced to resign as Assistant Secretary after a powerful group of Democrat Senators refused to accept his nomination.

Mr. Reich is a recognized anti castrate, former Ambassador in Venezuela who was also an outstanding figure in the Reagan administration as coordinator of efforts and resources, (some illegal) in support of the “contras” with the purpose of derailing the Sandinista government in Nicaragua in the eighties.

In private business Mr. Reich has worked for the Bacardi group, a company belonging to exiles Cubans and as a representative of Lockheed during the recent sale of jet fighters to Chile.

In his new post as presidential special envoy Mr. Reich will have an office adjacent to the While House and direct links with Ms. Rice and therefore quick access to President Bush himself.

Another hardliner, former advisor to Senator Jesse Helms and currently Ambassador in the Organization of American States, Roger Noriega, will take the post of Assistant Secretary of State for the Western Hemisphere.

'Axis of evil' would expand, expert warns www.globeandmail.com By JEFF SALLOT Friday, January 10, 2003 – Print Edition, Page A8

OTTAWA -- Brazil is scrambling to clean up the diplomatic fallout from a suggestion by its rookie Science Minister that the country needs to know how to build nuclear bombs.

The comments -- since "clarified" by Brazilian diplomats -- tripped alarms at the United Nations and in Washington, where jittery officials are trying to deal with nuclear crises in North Korea and Iraq, and hardly need a new one in South America.

For Brazil or others, hinting about going nuclear as part of a strategy to win respect internationally is bound to backfire, some experts said.

"This unfortunate statement has done political damage," said Luis Bitencourt, director of the Brazil Project at Washington's Woodrow Wilson Center.

Any hint that the newly elected government of President Luiz Inacio Lula da Silva is trying to revive Brazil's nuclear ambitions would be exploited by suspicious U.S. right-wingers, who would lump Brazil in with U.S. President George W. Bush's so-called axis of evil, Mr. Bitencourt said.

Brazilian officials have to be careful about their words because many UN members remember that the country's military dictatorship tried to develop nuclear weapons, Mr. Bitencourt said. Brazil has the most advanced nuclear-energy and research programs in Latin America.

The furor was set off by a radio interview this week in which Science and Technology Minister Roberto Amaral was asked whether Brazil needs to develop the knowledge to manufacture nuclear weapons.

"We cannot renounce any scientific knowledge -- the knowledge of the genome, the knowledge of DNA, the knowledge of nuclear fission," he said.

Earlier in the interview, Mr. Amaral said Brazil is against nuclear proliferation but cannot erase its knowledge of the technology.

The minister said that although Brazil is a country of peace, it needs modern armed forces with "high technological development."

When the interview was broadcast on the Portuguese-language service of the British Broadcasting Corp., it set off alarms at the Vienna headquarters of the International Atomic Energy Agency.

The IAEA, the UN's watchdog on nuclear-proliferation questions, is involved with crises in Iraq, where its inspectors are looking for evidence of a nuclear-weapons program, and with North Korea, which recently expelled UN nuclear-program inspectors.

The agency sought clarification from Brazil, and is satisfied that the country intends to adhere to the Treaty on the Non-Proliferation of Nuclear Weapons, IAEA spokesman Mark Gwozdecky said last night.

The Brazilian Ministry of Foreign Relations said there has been no change in the country's fundamental commitment to renounce the development of nuclear weapons.

The ministry noted that the Brazilian constitution prohibits bringing nuclear weapons into the country aboard the ships of other countries. Other officials vowed that Brazil favours nuclear research only for peaceful purposes.

Brazil and rival neighbour Argentina halted their nuclear-weapons programs in the mid-1980s. But there are suspicions that at least some Brazilians want the weapons to give the country extra diplomatic heft to match its emergence as an economic power.

During the fall presidential-election campaign, Mr. da Silva criticized the non-proliferation treaty, saying it favours the original nuclear-weapons states -- the United States, Russia, China, France and Britain.