By Roger Burbach* 13 December 2002

Luis Inacio Lula da Silva, the incoming president of Brazil, is demonstrating an uncanny ability to move forward a progressive agenda while keeping his conservative antagonists at bay. This was clearly demonstrated in his meeting with George W. Bush in Washington on 10 December 2002. Pablo Gentili, an Argentine international analyst at the State University of Rio de Janeiro, declares: "Da Silva reaped the support of the Bush administration while making it clear that his government will set its own agenda and priorities. He has an extraordinary capacity to build broad support for his left-leaning policies in the face of domestic and international adversity."

Before da Silva's arrival in Washington key Republican Congressional figures, along with right-wing conservatives identified with the Reagan administration's bellicose policies in Central America, were calling for Bush to take a tough stand against the incoming president who is commonly referred to as "Lula". They decried the new leftist threat in Latin America, asserting that a "Lula, Castro, Chavez axis" was in the making, referring to Presidents Fidel Castro of Cuba and Hugo Chavez of Venezuela.

Lula had also been hit by international speculators prior to his visit to Washington. Fearful that the social policies advocated by the new government will adversely affect Brazil's ability to make payments of its huge international debt totalling 240 billion US dollars, the investment bank of J.P. Morgan on 2 December downgraded its rating of Brazil from "neutral" to "negative". This shift led to a slide in the value of Brazil's currency, the real, and a slump in the country's stock market.

As Francisco Meneses of IBASE, an independent research institute in Rio de Janeiro, notes, "Before coming to Washington, Lula positioned himself so that international institutions and politicians like Bush would find it difficult to go after him." The day after he won the Brazilian election, Lula declared that his number one priority when he takes office on 1 January 2003 was to end hunger among 23 million Brazilians, approximately one-seventh of the country's population. The campaign will be accompanied by increased subsidies to poor families aimed at keeping their children in school, by a fairly radical agrarian reform programme and by significant government support for agricultural cooperatives.

"By making the ending of hunger his number one priority, Lula has inoculated himself against many of his detractors," says Meneses. As an expert on agrarian issues, Meneses has been participating in the planning meetings for the government's campaign against hunger. He says the World Bank, along with the United Nations Food and Agricultural Organization, have already informally committed their institutions to spending 5 billion US dollars over the next four years on the campaign against hunger.

Even the most orthodox international lending institutions have been checkmated by da Silva's announced policies. Just days before Lula left for Washington, the head of the International Monetary Fund, Horst Kohler, went to Brazil. After meeting Lula, Kohler proclaimed that the incoming president "is a leader for the 21st century". He even endorsed Lula's call for increased social spending and lamented J.P. Morgan's downgrading of Brazil's investment rating.

One major area of discussion between the Bush administration and Lula in Washington focused on the Free Trade Area of the Americas (FTAA). Bush has made this agreement the lynchpin of his Latin American policy, calling for all the countries of the hemisphere (except Cuba) to begin reducing trade barriers in 2005. Lula has repeatedly expressed reservations about FTAA, asserting that it favours US domination of Latin America.

Lula positioned himself strategically in the FTAA debate by meeting regional allies before going to Washington. As Marcos Arruda, a foreign policy consultant to the incoming government notes: "Lula intentionally visited neighbouring countries before visiting Bush to make it clear he would not grovel for US support and that Brazil has its own agenda and interests in South America." On 2 December Lula visited Argentina, Brazil's leading partner in MercoSur, the regional trade block that also includes Uruguay and Paraguay. Next he went to Chile, an associate member of MercoSur. In his major address in Buenos Aires Lula called for a strengthening of MercoSur "so we can take control of our destiny" and end "our dependency on international currency flows". In Argentina as well as Chile, Lula asserted that MercoSur should take priority over other trade agreements, and went on to call for a common currency among MercoSur nations and the formation of a regional Parliament.

In Washington Lula was able to seize the commercial high ground by pointing to a series of US protectionist measures that actually run counter to authentic free trade. Approximately 25 per cent of Brazil's exports valued at over 14 billion US dollars currently go to the United States. Twenty of the leading products face average US tariffs of 39 per cent. If the trade barriers were removed on just four products - orange juice, steel, meat and soy products - it is estimated that annual Brazilian exports to the US would jump by 2 billion US dollars.

Francisco Meneses of IBASE believes it is doubtful that the talks between Lula and Bush will actually lead to any significant reduction of US trade barriers, particularly on products like orange juice. "Bush's brother Jeb, as governor of Florida, obviously has a stake in keeping out Brazilian juice because of his alliance with local orange growers." Moreover, Meneses worries that even the apparently favourable rapport between Lula and George W. Bush will soon sour. "With Iraq and the Middle East, the administration has its hands full; it doesn't want to create a crisis with the Lula government for now. Bush is biding his time. He will wait for the inevitably deeper reactions of domestic and international interests opposed to Lula's progressive social policies before moving against the new government."

January 3 2003 By Hector Tobar Brasilia

Amid a swirl of red flags and a chorus of leftist slogans, Luiz Inacio Lula da Silva was inaugurated as President of Brazil on Wednesday. He promised to launch a crusade for social justice, but his aides announced that one of his first acts would be a fiscally conservative move to limit the size of government.

"When I look at my own life, I know with great certainty that we can do much more," said the man most Brazilians call simply Lula, recalling his rise from an impoverished rural family, to factory worker and union leader, and now President of Latin America's largest nation.

"We will bring about change with courage and humility," Mr da Silva said in an inauguration speech before the National Congress that lacked specifics on measures he will take to address the nation's economic crisis and its $A464 billion debt.

That didn't seem to matter at the inauguration: More than a few of his supporters greeted the arrival of Mr da Silva's caravan with the wild enthusiasm of rock fans. One man nearly pulled the new President out of his moving Rolls-Royce in an attempt to embrace him, while others jumped into the pools of water that surround many government buildings, waving their arms frantically.

Yesterday Mr da Silva was scheduled to sign his first decree. It will require all ministers to reduce their staffs by 10 per cent and will prohibit them from issuing new contracts for 30 days.    advertisement       advertisement

Such austerity defined the government of his predecessor, Fernando Henrique Cardoso.

"Change will be slow and gradual," said Luciano Dias, a political scientist. Yet, as was clear again on Wednesday, many of the voters who elected Mr da Silva in a landslide in October expect nothing short of a wide-ranging social revolution. They want quick action on the promises he reiterated in his inauguration speech, including agrarian reform and a "zero hunger" program.

"This is a victory of the people," said Odete Costa, an activist from the President's Workers' Party from the Amazonian state of Para. "We will have a new kind of government, we will do away with corruption, and we will fight hunger."

In all, more than 100,000 people, many of them Workers' Party activists, descended on the capital to celebrate.

Cuban President Fidel Castro was among the visiting dignitaries, as was beleaguered Venezuelan President Hugo Chavez - both fiery leftists.

In his speech, Mr da Silva received the loudest and longest ovation for a jibe at the Bush administration's war plans in Iraq. "International crises, like the one in the Middle East, should be resolved through peaceful means and negotiation," he said.

More than 100 countries sent representatives to the inauguration. The US sent its Trade Representative Robert Zoellick, who met Antonio Palocci, Mr da Silva's Finance Minister, for an hour on Wednesday.

"It was a listen-and-learn visit, in which the basic economic problems of Brazil were discussed," Mr Zoellick said.

While still a presidential candidate, Mr da Silva agreed to abide by an agreement with the International Monetary Fund to maintain a budget surplus of 3.75 per cent during his first year in office.

In the weeks before the inauguration, he filled key economic posts with men considered friendly to Wall Street and the international investment community, including his nominee for president of the Central Bank, Henrique Meirelles, a former executive at Bank Boston.

"One thing that the Workers' Party has learnt in these past eight months is that the markets have power and the party will have to abide by that," said Alexandre Barros of Political Risk Analysis, a Brasilia consulting firm.

• Los Angeles Times

By Brian Ellsworth Special to UPI From the Business & Economics Desk Published 1/2/2003 3:38 PM

CARACAS, Venezuela, Jan. 2 (UPI) -- The Venezuelan government and the political opposition have not been able to agree on almost anything in 2002. However, neither side seems to have any doubt that the opposition strike will have a crippling impact in 2003 on the economy of the world's fifth-largest petroleum producer.

The Venezuelan government is losing an estimated $35 million per day from the decline in petroleum revenue, which accounts for almost half of government finances. While it has been able to continue functioning during the first month of the strike, time may be running out.

The first month of the strike is expected to cause an additional reduction of 1.28 percent in 2002 gross domestic product, which declined by a staggering 6.6 percent in the first semester of the year.

"From a fiscal point of view, the government is against the wall," said Francisco Rodriguez, the head of the government economic analysis office. Rodriguez indicated Thursday that in order to continue meeting obligations, it will have to chose between defaulting on domestic debt or stopping payment of government workers' salaries.

Private sector analysts had a similar perspective.

"The extension of the protest beyond 45 days would make it impossible for the government to pay off its debts," says a report released by the currency exchange house Econoinvest. The report estimates that the government only has enough resources to pay debts until the end of January.

To make up for the losses in December, the government has dipped into its dollar reserves. Central Bank figures show that reserves have declined by $1 billion of a total of $15 billion. As a result, the local currency, the bolivar, has declined sharply against the dollar, slipping from Bs 1,263 on the dollar on December 16 to Bs 1,401 by the end of December.

Legislators are expected to announce changes in the proposed 2003 budget this week.

The strike leaders insist that Chávez must either resign or call early elections, both of which he refuses to do. The opposition hopes to shut down the country's refineries to restrict the supply of gasoline for local consumption. This would eventually restrict transportation prevent effective transport of food, increasing the pressure on Chavez. They also hoped that restricting petroleum exports could starve the government of cash, leaving few alternatives when reserves begin to dwindle. As part of the strike, opposition leaders are encouraging businesses and industries not to pay their taxes to further decrease government funds.

Although it has pinched government finances, the strike has far from paralyzed Venezuela. The shortage of gasoline caused mostly long lines and headaches, but no serious food shortages or public order disturbances. Many small businesses have opened their doors, and the informal economy has kept the streets filled with holiday shoppers.

The strike, combined with the possibility of U.S. military action in Iraq, has pushed the price of petroleum on the international market above $30 per barrel, 57 percent higher than the closing price last year.

The strike represents the culmination of the conflict between Chávez, a populist former left-wing leader who led a failed coup in 1992, and the country's political opposition who say he governs autocratically. A similar petroleum strike last April led to a coup that removed briefly removed Chavez after political violence left 19 people dead. Loyalist troops and supporters restored him to power two days later.

The opposition accuses Chavez of trying to create trying to turn Venezuela into a communist state, and is angered by his populist rhetoric and friendship with Cuban President Fidel Castro. They say the Chavez government has politicized the armed forces, taken over public institutions, and restricted free speech.

Nonetheless, Chavez swept in six consecutive elections starting in 1998. He currently has roughly 35 percent support of the population, which is one of the highest levels of support of any Latin American leader today. He still retains enormous support from Venezuela's poor, which make up 80 percent of the country's population.

The opposition spent most of the year blaming Chavez for the economic recession that began in 2002. Nonetheless, they acknowledge that the strike will cause enormous economic damages in the coming year. The government, for its part, has been put in the awkward position of trying to deny that the strike has affected the country, while simultaneously condemning it as "terrorism."

The opposition and the government maintain a media war over the functioning of the petroleum industry. According to government leaders, the country is producing 800 thousand barrels of crude oil per day, far below the 2.8 million barrels allowed by its quota mandated by the Organization of Petroleum Exporting Countries. However, strike leaders say the nation is only producing 150,000 barrels per day.

Government leaders have given varying estimates of actual production. Last week, PDVSA President Ali Rodriguez announced the country was producing 1.2 million barrels per day, but two days later corrected himself, saying the production was in fact only 800,000.

Sources in the United States indicate that U.S. crude reserves have fallen since the start of the strike. However, some say that both sides are manipulating information.

The government also says that refineries are functioning normally, while the opposition assures that they are almost completely shut down.

The government assures that the petroleum industry will be functioning normally by the end of February. During his a visit to Brazil to celebrate the inauguration of President Inacio Lula da Silva, Chavez asked the Brazilian government to send technicians and equipment to help restart petroleum operations.

The request comes a week after the Venezuelan government purchased 520,000 barrels of refined gasoline from Brazil. It was the first time in Venezuela's history that it had ever imported gasoline. It also purchased gasoline from neighboring Trinidad. However, gasoline purchases have been expensive, since the government buys gasoline on the international spot market at roughly $60 per barrel, and sells it at a subsidized rate of $11 per barrel on the domestic market.

By ALAN CLENDENNING, Associated Press

New Brazilian President Luiz Inacio Lula da Silva speaks during his first meeting with government ministers in Brasilia, Brazil, on Friday, Jan. 3, 2003. BRASILIA, Brazil (January 2, 4:35 p.m. AST) - Breakfast with Hugo Chavez, dinner with Fidel Castro.

The first day in office for Brazil's new president, Luiz Inacio Lula da Silva, projects the image of a leftist alliance in Latin America - one that Chavez, Venezuela's president, has already nicknamed the "Axis of Good."

Such an alliance could hinder U.S. efforts to create a Free Trade Area of the Americas stretching from Alaska to the tip of Argentina by 2005.

Despite the perception of a new Latin American troika, doubts abound that Silva really wants to form a bloc with such close ties to Chavez and Castro, Cuba's leader.

But by giving Latin America's other two leftist leaders such a warm welcome a day after his inauguration, Silva gets huge political mileage in Brazil, where Castro and Chavez are revered by the far left of his party.

The United States sent Trade Representative Robert Zoellick to the inauguration, seen by the Brazilians as something of a snub because Zoellick suggested last October that Brazil's only trading partner would be Antarctica if it did not join the hemispheric trade zone.

Silva responded by calling Zoellick "the sub secretary of a sub secretary of a sub secretary" during his election campaign.

At the breakfast meeting, Chavez asked Silva to send technical experts from Brazil's state-owned oil company to replace some of the 30,000 Venezuelan state oil workers who have joined a crippling nationwide strike. Silva said he would consider the request.

And before dining Thursday night with Silva, Castro told Associated Press Television News that Brazilian-Cuban relations will grow stronger now that Brazil has its first elected leftist president.

Arriving at Silva's rural retreat 20 miles outside Brasilia for dinner, Castro shook hands and signed autographs for about 50 cheering Silva supporters. He did not speak with reporters.

Castro and Chavez had front-row seats in Congress at Silva's inauguration Wednesday, where an estimated 200,000 Brazilians waved red flags. Many were dressed in red and white clothes, the colors of Silva's Workers Party.

The Cuban and Venezuelan leaders had dinner together, and talked until 4 a.m. Thursday at the Brasilia hotel where Castro is staying.

But experts said Silva's efforts to accommodate Castro and Chavez in Brasilia could be carefully calculated political window dressing.

Silva angered his party's left wing by appointing fiscal moderates to key cabinet posts, but needs its help to push programs through Congress, where he lacks a majority.

"Embracing Castro and Chavez, the symbols of anti-U.S. influence in Latin America, gets Silva political capital in Brazil," said Stephen Haber, a Latin American expert at the Hoover Institution at Stanford University. "But this is a dangerous game, you go too far one way or the other and this will blow up in your face."

Silva doesn't want to scare away investors, who already sent the value of the Brazilian currency, the real, down 40 percent last summer over fears that his administration might not follow responsible economic policies.

So far, Silva seems to be pleasing his supporters without spooking financial markets. The real, which ended down 35 percent last year, finished stronger Thursday as the market reacted positively to second-tier finance ministry appointments.

Named to the posts were a mix of left-leaning, moderate and liberal economists with strong credentials, along with officials from the administration of former President Fernando Henrique Cardoso who will keep their posts.

Chavez coined the "Axis of Good" term after Silva was elected in October, hailing the victory and saying Venezuela, Brazil and Cuba should team up to fight poverty.

"We will form an 'axis of good,' good for the people, good for the future," Chavez said at the time.

But Brazilian political scientists dismissed the possibility of an "Axis of Good" being created by the meetings between Silva, Castro and Chavez.

"There is no way this represents the beginning of Chavez's 'Axis of Good' and much less the 'Axis of Evil' imagined by right-wing Americans," said Luciano Dias, a political scientist at the Brasilia-based Brazilian Institute of Political Studies.

Silva, who is popularly known as Lula, "would never even consider creating a nucleus of leftists in Latin America, he is too smart for that," Dias said.

U.S. State Department spokesman Richard Boucher would not comment Thursday on the possibility of the alliance.

Chavez left his strikebound and politically riven country despite the crippling work stoppage aimed at toppling him from the presidency of the world's fifth largest oil producer.

Silva also has a compelling reason for staying on friendly terms with Chavez: The long border the two countries share.

"Brazil worries very much about violence in Venezuela spilling over into Brazil," Haber said. "So you want to have peaceful relations with the Venezuelan, regardless of who is in charge."

During his breakfast with Silva, Chavez also brought up the idea of increasing cooperation among Latin American state-owned oil industries and setting up a company called Petro-America.

"It would become a sort of Latin American OPEC," Chavez said. "It would start with Venezuela's PDVSA and Brazil's Petrobras," and could come to include Ecopetrol from Colombia, PetroEcuador from Ecuador, and PetroTrinidad from Trinidad and Tobago."

Last week, Cardoso's outgoing administration sent a tanker to Venezuela carrying 520,000 barrels of gasoline, but that barely dented shortages around the country.

If Silva decides to help Chavez with Brazilian oil workers, it probably won't accomplish much either, said Albert Fishlow, who heads Columbia University's Brazilian studies program.

"If he does, it will be minimal and not enough to affect the situation," Fishlow said.

Yo, al contrario de las voces agoreras de los profetas del desastre –no quiero señalar nombres, pero los siento muy cerca, casi al lado–, solo veo cosas buenas para este año que acaba de comenzar. Según el horóscopo chino, entramos en el año de la cabra. Ya se sabe que cuando pretende aludirse a la locura de alguien suele decirse: “está como una cabra”. La cabra produce leche y hay alguien importando leche, no sé si me explico. La cabra tiene cuerno y el cuerno simboliza el poder, pero el diablo se representa también con cachos. El que tenga entendimiento que entienda. Me perdonan lo críptico, pero así somos los profetas.

Ahora bien, si analizamos el 2003 desde el punto de vista de la numerología, tenemos que la suma del número es igual a 5. Pero 5 menos 1 que se va, son 4, día del golpe de febrero. Febrero es el mes 2, más 4 suman seis, menos 1 que se va, tenemos otra vez 5. Pero fíjense en el detalle de los dos ceros: los ceros no valen nada; luego, si quitamos los ceros, nos queda 23, al revés 32, que sumados dan 55, 5+5 = 10, pero como el cero nuevamente no vale nada nos queda otra vez 1, el que se va. Y por último, si multiplicamos los números del año, el resultado es 6, que es igual a cinco cuando el 1 se va. Conclusión: alguien como que se va, se va, se va, se va.

También podemos, para saber qué nos depara el 2003 a los venezolanos, recurrir a las profecías de Nostradamus. En la centuria XII, 52, puede leerse –en francés antiguo– la siguiente cuarteta: Ce qui est nè dans cetè sabane Ne regarde pas cete fleur Quelque choise que Dieux a doné Le peuple ce àrrêbaté Lo que traducido al español significa: El que nació en esta sabana Deja de mirar las flores Lo que Dios le ha dado El pueblo se lo arrebata.

La interpretación de esta cuarteta es muy clara: El que nació en esta sabana. Esta sabana es Venezuela, pero si se voltea la expresión “esta sabana” es “sabana esta”. Sin duda, Nostradamus alude a Sabaneta, lugar de nacimiento de Chávez. “... Deja de mirar las flores” se refiere, obviamente, al palacio de Miraflores.

Lo que “Dios le ha dado” puede ser el poder, pero puede referirse también a Diosdado, uno de los más cercanos colaboradores de Chávez, y que en abril le entregó el poder.

“... El pueblo se lo arrebata” es una expresión muy clara: alude a un proceso electoral. El significado de la frase es inequívoco: Chávez, que nació en Sabaneta, deja el palacio de Miraflores por decisión del pueblo.

Yo, por mi parte, no sabía que tenía inclinaciones proféticas, pero, el otro día, trasegando en el estacionamiento unos galones de gasolina que me consiguió Graterolacho, comencé a tener visiones y he aquí lo que vi: –El Presidente renuncia o lo sacan o pierde una elección o se enferma o alguien lo traiciona o alguna vaina.

–Un hombre relacionado con algo negro que sale de la tierra y que se procesa en refinerías, catire, de lentes, nacido bajo el signo de Cáncer y cuyo nombre comienza con J y su apellido con F, será presidente.

–Tarek dejará de ser “el poeta de la revolución” y pasa a ser conocido como “el poeta de la oposición”.

–Las colas de Caracas serán cosas del pasado.

La gente descubrirá lo sabroso que es andar sin carro. –Le agarraremos el gusto a cocinar con leña.

–Más de una maracuchita será bautizada el año que viene con nombres como “Nafta Catalítica Montiel” o “Marina Mercante Urdaneta”.

–Como compensación al Grupo Polar, cuando el paro termine, todos nos tomaremos una caja diaria de cerveza.

–Marta Colomina tendrá un programa de cocina.

–La reconciliación en Venezuela será de tal magnitud que Freddy Bernal se enamorará perdidamente de Nitu Pérez Osuna y Ernesto Villegas trabajará en Globovisión.

–La gente, entrenada en marchas, vigilias y cacerolazos, experta como se ha hecho en reconocer la demagogia, el oportunismo y la arbitrariedad, no se calará otro mal gobierno nunca más.

Y para todos, ¡un Próspero Gobierno Nuevo!

Laureano Márquez El Nacional 5 de Enero de 2003