<a href=www.infobrazil.com>InfoBrazzil by Ted Goertzel          Week of Apr 12- 18, 2003

Ted Goertzel is Professor of Sociology at Rutgers University in Camden, New Jersey. He is a former Assistant Professor at the University of Oregon (1968-73) and Visiting Instructor at the University of São Paulo (1967-68).  He holds a BA in Sociology and Anthropology from Antioch College in Yellow Springs, Ohio; an MA in Sociology and Latin American Studies from Washington University; and a PhD in Sociology from Washington University in St. Louis. A prolific writer, he has published numerous articles and books on Latin America and Brazil, and focused on several aspects and changes that took place in Brazil during the two consecutive tenures of President Fernando Henrique Cardoso (1994-1998 and 1998-2002). He is the author of “Fernando Henrique Cardoso and the Reinvention of Democracy in Brazil” (Boulder, Lynne, Rienner – 1999), released in Portuguese in 2002 – an update for the original English language version is available on his website (see link below). More recently he published the essay “Does Zero Hunger Make Sense?”, and the article “So This is Lula?”, carried also by one of Brazil’s top dailies, Folha de S. Paulo.

Lula has a lot to apologize for. Instead of giving Brazil a shiny, new economic model, he simply warmed up former President Fernando Henrique Cardoso's old one.

After eight years of attacking Cardoso's proposals to reform social security and taxes, he conceded that Cardoso was right after all. He announced a “Zero Hunger” campaign modeled on the American food stamp program, without mentioning that the previous administration under Cardoso had already instituted innovative anti-hunger and anti-poverty programs. In all the key policy areas – land reform, environmental protection, affirmative action, and foreign policy – Lula’s policies are almost indistinguishable from those introduced by Fernando Henrique Cardoso.

This may mean that Brazil has finally matured to the Tweedle Dee, Tweedle Dum stage of party politics, with a broad consensus on the major issues. No one wins an election by praising the other side, and Cardoso's popularity was so low that even his own party's candidate gave him only grudging recognition. Cardoso and Lula are old friends, going back to the long struggle against the military regime. They have similar goals for Brazil, and they are practical men who have no desire to go down in glorious defense of impossible dreams. After eight years in office, Cardoso left Brazil significantly better off than he found it. Lula will be doing well if he can say the same in four or eight years.

If this were merely a private matter between friends, there would be little need for an apology. They both understand political rhetoric, and Lula has expressed his appreciation of Cardoso's help in the transition. But a public apology would be good for the country. Not so much to correct the historical record, but to help Brazilians understand what happened to Lula's vision of a new economic and social model that would transform the country.

All through the campaign, Cardoso was frustrated because he could never pin Lula down on policy issues. Lula said he was against what Cardoso was doing, but he never explained what he would do instead. Would he renationalize industry or restructure the debt? How would he lower interest rates without increasing the debt and inflation? How would he increase salaries without increasing inflation? How would he implement and subsidize a more rapid land reform? In response to these hard policy questions, Lula just said that he would get together with the interested parties and negotiate. He never said what his own position would be.

Lula won the election without ever really answering Cardoso's questions. People were content to vote for images, without knowing exactly what policies would be used to implement them. The Workers Party's campaign centered on a meaningless slogan: "Another Brazil is Possible." Of course, many other Brazils are possible. And many of them would be worse rather than the one we have now. Brazil could rally around a populist demagogue like Venezuela or default on its debts like Argentina. A few in the leftover left would like Brazil to be a Marxist dictatorship like Cuba or North Korea. Almost everyone would like Brazil to be more like Sweden, but that will take a long time.

The question is not whether another Brazil is possible, but which of the many possible Brazils is most feasible. In my view, the best possibility for Brazil is to model itself on Chile. I don't mean the Chile of Allende or the Chile of Pinochet, but the democratic socialist Chile of the last fifteen years. Chile has cut poverty in half while raising everyone's standard of living and protecting human rights and democratic freedoms. Brazil could do the same. There is no great secret to Chile's success. It was achieved through four main policies:

• Working hard to maintain a political consensus, including sending important bills to the opposition parties for advice and consent;
• Reducing government expenditures so as to maintain a budget surplus and cut inflation;
• Increasing taxes to fund higher spending on education, health, youth training and housing for the poor;
• Greatly increasing the investment rate, including direct foreign investment;

This is more or less what Fernando Henrique Cardoso tried to do, and Lula is trying to do it even better. Brazil started down the right road ten years ago with the Real Plan. It made progress down that road, but it didn't get as far as it hoped. Lula hopes to go farther down the same road, and he will need all the help he can get. He will need people to be patient when he encounters roadblocks and detours along the way.

Fernando Henrique was less popular than Lula primarily because he told people exactly what he was doing. Lula won the popularity contest by offering vague promises and utopian visions. This is very much in the tradition of Latin American politics, and it certainly worked in the election. But it can be a recipe for disaster when people become disillusioned because the promises cannot be realized.

A public apology to FHC would correct the false impression that Lula has a revolutionary new model for Brazil – and the illusion that Brazil needs one.

See also: Does Zero Hunger Make Sense? by Ted Goertzel An essay published by Brazzil Magazine So This Is Lula? by Ted Goertzel English version on Brazzil Magazine, of an article originally published by the Folha de S. Paulo daily

Related sites: Ted Goertzel’s website crab.rutgers.edu

Zero Hunger Official website (Portuguese only) www.fomezero.gov.br

U.S. Food Stamp Program www.fns.usda.gov

Forbes.com-Reuters, 04.14.03, 9:44 AM ET

CARACAS, Venezuela, April 14 (Reuters) - Venezuela's Central Bank has lowered its discount rate for local banks seeking to borrow money to meet reserve requirements from 39 percent to 36 percent, the bank's Web page said Monday.

The discount rate cut was effective April 10. The Central Bank on Feb. 11 had lowered the rate to 39 percent from 42 percent.

The latest reduction came as leftist President Hugo Chavez's government continued to apply tight currency controls and price curbs to shore up international reserves and the country's bolivar currency.

The government put the controls, including a fixed exchange rate, in place in early February after a two-month opposition strike battered the economy and disrupted the oil exports that account for half of its revenues.

Access to U.S. currency was suspended for more than two months as the government fine-tuned the new control regime, and it has only recently started making limited amounts of dollars available for essential imports.

Chavez, a populist former paratrooper, has repeatedly called for the Central Bank to lower interest rates to compensate for the hard currency drought and keep inflation -- now running at an annualized rate of 34 percent -- in check.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, April 14, 2003 By: VHeadline.com Reporters

"There was a lot of confusion outside Venezuela during the last year about what has been happening ... some people have asked how could progressives and trade unionists support the Venezuelan government of President Hugo Chavez given the dedicated opposition of the Confederation of Venezuelan Workers (CTV)? How, when there was a general strike, could we side with the government rather than workers?”

Next Tuesday's (April 16, 2003) issue of New Zealand's Green Left Weekly clarifies the situation saying that there should be no confusion today ... "the CTV has been exposed as an arm of the employers' association Fedecamaras, with which it has been allied in the April 2002 coup d'etat and in the so-called general strike earlier this year."

"It was a strange general strike, indeed ... one in which workers in the oil industry, electricity, transport, public sector and other basic industries kept working and management walked out ... a strike in which workers were laid-off by the big local and multinational conglomerates, but were promised that they would receive full pay for the period of the lock-out (only now to discover that this promissory note was dependent on the companies defeating the Chavez government)."

Green Left Weekly continues ... make no mistake about it, this “general strike” was a capitalist offensive, supported by the US and its clients, to bring down the pro-poor Chavez government. Its immediate effect was an enormous blow to Venezuela's economy because of the loss of oil revenues for several months following the shut-down of PDVSA, the national oil company, by its managers. There were also losses in tax revenues that resulted from the lockouts and a tax strike by the companies. The resulting “opposition deficit” will make this year a difficult one under any circumstances but particularly so as the government attempts to meet the enormous needs of the Venezuelan people.

However, a longer term effect of this offensive by Venezuela's capitalist oligarchy has been a development of the political consciousness of the poor (most of them in the informal sector) and organized workers. There is a mood among workers of self-confidence -- one which emerged when the workers in PDVSA ran the company by themselves after management and technicians abandoned it.

In workplace after workplace, workers are talking about taking over and running their enterprises as cooperatives. PDVSA itself now has two representatives of its workers on its management board, and an associated petrochemicals firm is being run as a cooperative. This process is just beginning, but it looks like capital has lost one of its major weapons, its ability to threaten a capital strike -- rather than giving in, Venezuelan workers are moving in!

On March 29, a new labor federation was formed ... The National Union of Workers (UNT). The new federation emerged out of a long process of discussion which began last July among the Bolivarian Workers' Force, the workers' movement that is aligned with the Chavez government, the Bolivarian Circles, grassroots organizations among the poor, and independent trade unions (both in and outside the CTV) that are not “Chavist” but which support the general direction of the government.

At the core of these discussions was the question of how autonomous the new federation would be in relation to the government. After the last capitalist offensive, the matter has been resolved -- the UNT will be independent, class-oriented, democratic and revolutionary.

At its formation, the UNT already represents more workers than are nominally represented by the CTV, which will lose any credibility it has had outside Venezuela as its member unions leave. (Indeed, the petroleum workers' union, from which the current head of CTV Carlos Ortega came, is itself a key union in the UNT).

Of course, capital does not give up so easily ... through the CIA and its various fronts, such as the National Endowment for Democracy (which financed the American Center for International Labor Solidarity's support for the CTV), Venezuelan opponents of Chavez's “Bolivarian Revolution” will attempt to maintain the support of international labor federations such as the US AFL-CIO, the International Confederation of Free Trade Unions and the International Labor Organization.

This is why it is especially important now for progressives and trade unionists to inform themselves of what is happening in Venezuela and in the Venezuelan workers' movement.

Referendum 2003 discuss the pros and cons of a revocatory referendum

President Hugo Chavez Frias express your opinions on the Presidency of Hugo Chavez Frias and his Bolivarian Revolution

Bolivarian Circles Are Bolivarian Circles a Venezuelan form of Neighborhood Watch Committees or violent hordes of pro-Chavez thugs?

Venezuela's Opposition What is it? Is a force to be reckoned with or in complete disarray?

By Reuters, 4/13/2003

SINGAPORE, April 14 (Reuters) - Oil prices opened the week one percent down on Monday, weighing up the prospect of a return of Iraqi crude exports to the world market against possible supply curbs by the OPEC cartel to avert a potential price crash.

U.S. light crude fell 29 cents to $27.85 a barrel.

Renewed downward pressure on oil prices came after weekend comments by a senior U.S. engineer that Iraq's giant Kirkuk oilfields could start pumping within weeks.

The northern fields are capable of producing up to 900,000 barrels per day (bpd) of Iraq's pre-war production of roughly 2.5 million bpd.

''It's a definite possibility that could be just a few weeks away,'' said Tom Logsdon, a senior member of the U.S. Army Corps of Engineers charged with repairing Iraq's oilfields.

Logsdon said the southern oilfields, where output was up to 2.1 million bpd before the war began on March 20, could be up and running in less than three months.

''Depending how quickly workers come on line, we estimate we will have between 330,000 and 1,000,000 bpd being produced within 12 weeks from now,'' said Logsdon.

Oil prices fell about 10 percent after the start of the war as U.S. and British forces quickly secured a majority of Iraq's oil infrastructure in the south of the country and traders predicted a fairly swift end to hostilities.

But any resumption of vital crude exports will be up to an interim authority in Baghdad in conjunction with the United Nations, where some analysts forecast that diplomatic wrangling will keep Iraqi barrels off the market for many months to come.

VENEZUELA SUPPORTS OPEC CUT

Iraq's crude could hit world markets just as demand is expected to wane by up to two million bpd. The second quarter sees a seasonal slump between winter demand for heating and the peak consumption of gasoline during summer vacations.

Compounding the demand downturn, many commercial airlines have slashed routes due to the spread of the flu-like SARS virus around the globe.

At the same time, supplies from OPEC producers are running almost two million bpd above the group's self-imposed ceiling, to counter supply disruptions from Venezuela, Nigeria and Iraq.

The Organisation of Petroleum Exporting Countries is planning an emergency meeting later this month or in early May to discuss tightening compliance to current output quotas or even possible curbs to formal limits.

''Higher prices, slower economic growth, warmer weather in the northern hemisphere and lower jet travel due to the SARS outbreak have all depressed the demand for oil,'' said David Thurtell, commodities strategist at Commonwealth Bank in Sydney.

''We expect that with oil prices heading lower, OPEC will try to be proactive in attempting to keep oil prices at, or above, $25 a barrel,'' Thurtell said in a research note.

Venezuelan President Hugo Chavez said on Friday that South America's biggest oil producer was ready to back any proposed OPEC supply cut to support prices in the group's target band of $22 to $28 a barrel for OPEC's reference basket of seven crudes.

OPEC's basket price stood at $25.40 on Thursday, compared with a monthly average of $31.54 in February.

''If we have to cut production by one million bpd, or 1.5 million bpd, or 1.8 million bpd, we would be ready to cut,'' Chavez told a news conference.

An anti-Chavez strike in December and January slashed crude output in Venezuela, usually OPEC's third biggest producer, from 3.1 million bpd to just 40,000 bpd at its low point.

Officials at state oil firm PDVSA said at the weekend that production had recovered to pre-strike levels at about 3.05 million bpd for crude output and 150,000 bpd of condensate production.

Forbes.com-Reuters, 04.14.03, 8:20 AM ET By Jonathan Leff

LONDON, April 14 (Reuters) - Nigeria, battling for a bigger share of OPEC's output, has pushed capacity to over 2.5 million barrels per day -- and may use it all next month despite an expected cartel move to cut production.

Oil companies fearing more pre-election strife ahead of a presidential poll in Nigeria next week may be slow to resume full production after ethnic violence shut in over a third of the African country's output for half of March, analysts said.

But new developments have added more than 200,000 bpd of capacity this year, a figure that should double by late summer -- all from offshore fields removed from the west Niger Delta violence that closed some 800,000 bpd of production.

"Nigeria is going to be at absolutely full throttle," said one Western industry source familiar with production levels. "We're looking at 2.5 million bpd."

The International Energy Agency, the Paris-based advisory group to 26 industrialised nations, estimated Nigeria's sustainable production capacity in March at 2.44 million bpd. Nigeria has targeted year-end capacity of three million bpd.

Since mid-March, Nigerian produced well below its previous 2.3 million bpd level due to violence around ChevronTexaco's Escravos output and Royal Dutch/Shell's Forcados, costing a total of over 10 million barrels of output.

Production is slowly recovering to nearly three-quarters of normal levels, but the companies indicate a return to full production appears unlikely before May.

That may be as much for political reasons as practical ones as Nigeria braced for its second democratic vote since military rule ended in 1999.

"It's less a question of what's possible and more what is happening politically," said Gary Still, executive director of African energy consultancy CITAC. "Elections are coming, I think it's probably unlikely the (production) situation will get much better before there's some clarity on the political situation."

TotalfinaElf, which has only the small 7,500 bpd Upomami field on-shore Nigeria, has more or less written off trying to restart production before the election cycle ends.

And oil companies who buy the crude -- many of them U.S. refiners who put a premium on Nigerian crude's low-sulphur, gasoline-rich qualities ahead of the summer driving season -- say they have made other arrangements for the rest of April. Some are even shying away from May barrels, traders say.

Parliamentary elections at the weekend were more peaceful than many had feared, with only 10 deaths reported so far.

President Olusegun Obasanjo faces his vote on April 19. Since independence, Nigeria has never had a successful transition from one civilian administration to another.

OPEC BIND

Nigeria's production woes last month could not have come at a worse time. The Organisation of the Petroleum Exporting Countries was then turning a blind eye to massive quota cheating in order to avoid a price spike after Iraq's output shut down.

The situation now is quite different.

Prices have fallen by a third and a move to crack down on overproduction during the weak second quarter is afoot.

"The question is, if there's a shortfall this month, does Nigeria get an exemption from OPEC to allow them to make up this shortfall?" said one industry consultant, who asked not to be named. "I'm sure they will be producing well in excess of their allowance over the next few months."

But OPEC President Abdullah al-Attiyah has said the cartel traditionally does not compensate members for unexpected losses, citing recent cases in Venezuela, Nigeria, Iraq and Iran.

If output tops 2.5 million bpd, that will put the country some 25 percent over its official OPEC quota.

Nigeria could make up its estimated 20 million barrels of lost production by pumping an extra 330,000 bpd for two months or an additional 220,000 bpd over three months.

Expectations that Nigeria would maximise production from unaffected fields to compensate the outages appear to be unfounded, according to oil traders who track exports.

OFFSHORE UPS OUTPUT

The rapid expansion of production from Africa's most populous country comes courtesy of foreign investment in expensive deepwater developments -- money oil majors will want to recoup as quickly as possible with maximum output.

Exxon Mobil's offshore Yoho platform has scheduled nearly four cargoes in May, implying production of nearly 120,000 bpd after it started up in January, market sources say. Shell's EA, which came onstream in February, will produce nearly 80,000 bpd.

Agip started up its offshore Abo field in April, targetting 30,000 bpd in a few months time.

The tipping point is likely to be TotalfinaElf's Amenam development, which is scheduled to start up in the middle of the year, eventually pumping some 125,000 bpd, analysts say.

Shell's massive Bonga deepwater development will add over 200,000 bpd early next year, the company says.