www.forbes.com Reuters, 01.28.03, 2:31 PM ET By Mark Egan

WASHINGTON, Jan 28 (Reuters) - The International Monetary Fund on Tuesday gave Brazil's economic performance a resounding endorsement, saying there was every reason for optimism as long as the nation stayed the pace of economic reforms.

In a statement released on the lender's web site after IMF Managing Director Horst Koehler met Brazilian President Luis Inacio Lula da Silva in Paris, the fund said it was encouraged by recent strengthening in market confidence toward Brazil and that its economy was on track for recovery.

"We were encouraged by the general improvements in market confidence toward Brazil over recent months, driven by a wider appreciation that sound economic policies will be maintained in Brazil," IMF chief Koehler said.

"Of course, the global environment remains challenging and we agreed, therefore, to keep in close touch, as the IMF continues to support Brazil's efforts to emerge from its temporary difficulties," Koehler said.

Koehler said Brazil's economic program, backed by a $30.7 billion IMF loan, "is on track," saying: "There is every reason for optimism that a basis for sustained economic growth and social progress is being established in Brazil."

Koehler said his discussions with Lula and Finance Minister Antonio Palocci encompassed the global market environment, developments in Latin America and the situation in Brazil. The IMF chief said he was impressed by Lula's vision for speeding up economic activity in Brazil while improving social equity.

Koehler said the new Brazilian president told him that reforms aimed at bolstering Brazil's continuing recovery would be carried out in the coming weeks and months.

"Maintaining fiscal sustainability by progressive structural reforms will lie at the heart of macroeconomic policy," Koehler said. In December, the IMF gave Brazil's economy a positive bill of health, freeing up a $3.1 billion payment under the nation's massive loan, inked in September of last year.

That loan was aimed squarely at assuaging market jitters, which hammered the nation's currency ahead of November's presidential elections. Before the election, markets had feared that if leftist Lula was elected, he might abandon IMF reforms and undermine the Latin American economy by running up government spending on social programs.

With that in mind, the IMF structured its loan to make the bulk of the payments available only if Lula stayed the course of reforms during 2003.

The latest IMF endorsement came as a new poll released in Brazil showed that 78.4 percent of Brazilians expect the new government to do a good job.

Lula, a one-time radical union boss who became Brazil's first working-class president, was elected in a landslide on Oct. 27, winning the most votes ever in Brazilian history thanks to his promises to create jobs and wipe out hunger.

www.rabble.ca by Rici Lake January 28, 2003

History is scattered with the rubble of failed movements for social change. If these mistakes are to be avoided in the future, we must study and learn from these past failures.

With this introduction, Brazilian political columnist Marcio Moreira Alves inaugurated a “round table of controversy” on the question of how to cope with the gaps and tensions between social movements, political parties and political institutions on the third day of the World Social Forum in Porto Alegre, Brazil.

While the panellists agreed on several points, notably the importance of maintaining independent social movements, the three-hour debate did not achieve any deep consensus. What remains clear, though, is that the relationship between party politics and movement politics will remain a difficult one.

Louise Beaudoin, Quebec’s Minister of International Affairs, called for a reaffirmation of the role of party politics. “Politics is a place where we can return to building society,” she said. It is the role of the nation-state to provide basic services, distribute wealth, and “put an end to the global apartheid that separates North and South.” But, she said, the role of social movements is also important: “social democratic parties that forget [about social movements] have lost power.”

Willy Madisha, representing the Confederation of South African Trade Unions, offered a critical analysis of the South African experience after eight years of African National Congress (ANC) rule. While the ANC still enjoys much popular support — Madisha estinated that two-thirds of South African electors would vote for the ANC — there is growing dissatisfaction, in large part because of the failure of the ANC either to deal with the country’s dramatic income disparity or to radically restructure government institutions, but also because the ANC in government is no longer the dynamic social movement of opposition.

The transition was hampered from the beginning by the threat of capital flight, Madisha said, a threat which will condition the actions of any progressive government. This limited the ANC`s flexibility, particularly in the economic arena. South Africa remains a relatively wealthy country, but also remains a deeply divided country, second only to Brazil in income disparity.

However, he added, serious mistakes were made by the ANC and South African civil society. In particular, he said, rather than try to maintain active social movements, most of the progressive leadership moved into state roles, with better pay and more access to power, and many social movements simply put their faith into the newly-elected state rather than continue their activities.

This has left a vacuum in the political environment, he said, warning that “we must not sacrifice social movements to build the state.” This is the responsibility of both the progressive governments and the movements themselves: “social movements cannot just aim at getting progressive governments into power,” while the elected progressive governments must themselves work to “open a space for action by mass movements.”

The democratic transition did not instantly change the nature of the South African government, Madisha pointed out. “We inherited a repressive state and its institutions... and we did not move fast enough to reform the state to ensure representation.”

Jose Genoino, president of the Brazilian Workers Party (PT, Partido do Trabalhadores), distinguished between the social movements which helped build the PT, the political party itself, and the new federal government headed by the PT’s Lula da Silva. “The PT is a left-wing party,” he said, but the government of Lula is “more inclusive.” So it is important that the relationship between the government and the party be clear.

Genoino rejected both the “traditional” models: a “Stalinist” party-state and a party which is simply “an annex of the government.” But the third option — that the party be “the opposition” — is also difficult.

For both Genoino and Madisha, there is a necessary if uneasy alliance between social movements and left-wing political parties. “The duty of the social movements is to support progressive action,” said Mahadi, while “the duty of the government is to engage with the social movement... a left-wing government must see social movements as part of the parcel of team players.”

According to Genoino, the radical transformation of Brazil will depend on two simultaneous projects: the reform of the state to make it democratic and participatory, and the transformation of society through political action by “independent and autonomous social movements.” The PT as a political party and the social movements are “friends of the same process.”

Rici Lake is a Canadian activist currently living in Perú where he works for an international NGO. Watch for more rabble in Brazil — voices from Porto Alegre, this week on rabble.

www.hoosiertimes.com January 28, 2003 Associated Press

DAVOS, Switzerland — Corporate leaders at the World Economic Forum turned their attention Monday to the official theme of the conference — how to restore public confidence in business.

"We are dealing with this issue head on," J.T. Battenberg III, chief executive of U.S. auto supplier Delphi, told the forum, an annual meeting of 2,300 government and business leaders.

The crisis of confidence was brought on by scandals like the collapse of U.S. energy trader Enron. Several at the forum called for a new commitment to old-fashioned business ethics instead of relying completely on the laws and rules affecting corporate governance.

"We no longer live in a world where business can say, 'Trust us. We'll do it right,' but one where the public will say, 'Show me you'll do it right,"' said Jaap Winter, former legal adviser to Unilever.

The official of this year's forum was "building trust," but the meetings have been overshadowed by the U.S. threat of war against Iraq.

Business and government leaders at the forum also showed signs that they have moved closer to solving a problem that has threatened to bring global trade negotiations to a halt.

Intensive talks among the heads of pharmaceutical companies, South African trade minister Alec Erwin and other trade officials made progress in finding ways to ensure poor countries can afford vital medicines, said Supachai Panitchpakdi, director-general of the World Trade Organization.

"In the last few days I thought (drug companies) have shown the kind of understanding that really we aren't that far apart and we should still be looking for a possible solution," Supachai, who also participated in the talks, told reporters. "What we heard at the meeting was encouraging."

Negotiations on the issue collapsed late last year after the United States refused to agree to a plan that would have let poor countries in certain circumstances override patents and order cheap, generic drugs from foreign companies to treat diseases such as HIV/AIDS, malaria and tuberculosis.

Discussions are due to restart today at the WTO's headquarters in Geneva.

The forum, in the posh Alpine resort of Davos, has been criticized by some activists as putting corporate profit ahead of improvements for the world's poorest people.

But on Sunday, the new leftist president of Brazil, Luiz Inacio Lula da Silva, expressed hope that the forum can be brought closer to the opposition World Social Forum, where Silva also spoke before coming to Davos.

"This is like a simple negotiation between a labor unionist and an employer," he said. "Once they sit at the bargaining table, we can see there are many topics that can be improved so we can reach an agreement."

On Sunday, U.S. Secretary of State Colin Powell called to the nations of the world to back the Bush administration in a potential war with Iraq.

"History will judge us whether we have the strength, the fortitude and the willingness to take that next step," he said.

Jordan's King Abdullah told the leaders in the next session that there was little chance of avoiding war in Iraq. "We're a bit too little too late," he said. "Today I think the mechanisms are in place ... It would take a miracle to find dialogue and a peaceful solution."

www.dw-world.de

Brazil and Germany will continue to support each other’s applications for a permanent seat on the U.N. Security Council, German Chancellor Gerhard Schröder said after meeting with the newly elected Brazilian president, Luiz Inacio Lula da Silva, in Berlin on Monday.

Schröder made a similar declaration a year ago when he met with da Silva’s predecessor, Fernando Henrique Cardoso. Schröder said the German government had great respect for the speed with which da Silva - Brazil’s first left-wing president in more than 40 years - had begun to address his country's problems.

Da Silva took office on Jan. 1 on a platform of wide-reaching political and economic reform, and a promise to end hunger in Brazil.

www.voanews.com VOA News 28 Jan 2003, 13:41 UTC

Anti-globalization activists attending the World Social Forum in Brazil have held a final demonstration to close out the six-day event.

Thousands of activists from around the world rallied in Porto Alegre Monday to protest against a proposed hemispheric free trade zone stretching from Canada to Argentina. Demonstrators said it will strangle South American economies. Activists also protested against possible military action in Iraq.

Organizers say as many as 100,000 people attended the six-day forum, covering topics that included corporate corruption and the developing world's foreign debt.

The forum is designed to coincide with the World Economic Forum being held at the same time in Davos, Switzerland.

New Brazilian leftist President Luiz Inacio Lula da Silva and American actor Danny Glover were among those who attended the World Social Forum.