02.01.2003 10.46 am

BRASILIA, Brazil - Former metalworker Luiz Inacio Lula da Silva became Brazil's first working-class president on Wednesday, (Thursday NZT) as tens of thousands celebrated the historic changeover in Latin America's largest country.

At the sleek, modernist Congress in the capital, Brasilia, Lula took the oath of office as the first leftist elected to the presidency. Supporters from across the nation cheered outside as he promised to change the country's course to improve the lot of Brazil's working majority.

He cited his own struggle against poverty as proof that the continent-sized nation had the resources to overcome a long list of problems including escalating crime, a stagnating economy and rising unemployment.

"When I see my own life as an immigrant from the Northeast, a boy who sold peanuts and oranges at the port of Santos... who is now the president, I am convinced we can do much more, and to do so all we need is to believe in ourselves," Lula said. "We are starting a new chapter in Brazil's history."

Before reaching the convertible Rolls Royce that took him to receive the presidential sash from outgoing President Fernando Henrique Cardoso, Lula was mobbed by cheering fans.

It was the first time in 40 years an elected president passed the sash to another elected president.

Some broke through police guards simply to touch their new leader, while one stubborn supporter stopped Lula long enough to snap a picture alongside the gray bearded 57-year-old, who took the oath in a dark suit and striped tie.

With the humble classes that gave him a record-breaking 52 million votes in his fourth attempt at the presidency in mind, Lula organized a party for the people rather than for dignitaries.

Despite rain, festivities kicked off early with country music. More than 150,000 people were expected to converge on the city's central lawn for celebrations.

At the stark, white Planalto presidential palace, Cardoso capped off his second four-year term by handing Lula the sash decorated with the yellow and green of the Brazilian flag.

As Air Force planes swooped in formation over the city, revelers celebrated as they would for Brazil's world-famous soccer victories, driving along the sweeping avenues of the capital, honking horns, and dancing in a sea of green, yellow and deep red, the color of Lula's leftist Workers' Party.

In a country with one of the worst wealth distributions in the world, only surpassed by three African nations, the arrival of a man who never made it past elementary school to the highest office heralded a new beginning for the nation's 170 million people, 53 million of whom live in poverty.

Many of those present spent days on Brazil's bumpy highways, including Lula's 21 relatives from his poor hometown of Caetes, a caravan that drew cheers along the 2400km journey.

Although the New Year's holiday kept some heads of state from attending, most presidents from neighbouring countries were on hand, including Fidel Castro of Cuba and Hugo Chavez of Venezuela, two leftists who have supported Lula in his long quest for the presidency.

The world will watch Lula's management of a nation now seen as a model of democracy in a region troubled by political upheaval, particularly in neighboring Argentina and Venezuela.

• REUTERS

By HAROLD OLMOS | Associated Press 01/01/2003

Brazilian President-elect Luiz Inacio Lula da Silva and his vice-President Jose Alencar wave en route to the National Congress to be sworn in as Brazil's President. - AP | Victor Caivano RASILIA, Brazil—Latin America's biggest nation marked a dramatic change in leadership Wednesday with the inauguration of a former shoeshine boy as Brazil's first elected leftist president.

A beaming Luiz Inacio Lula da Silva took the oath of office in Brazil's Congress as tens of thousands of working class Brazilians cheered the elementary school dropout who went on to become a union leader and the head of Brazil's Workers Party.

As Silva traveled to Congress in the back of a convertible Rolls-Royce, a sea people of chanted "Lula! Lula!" and raised red flags bearing the color his party in the air.

Silva, dressed in a dark suit and blue tie, stood in the back of a car, smiling and waving to the crowd. He is popularly known as Lula. At one point, a horse carrying one of the country's presidential military guards apparently was frightened and fell to the ground in front of the car before being raised by its rider.

The incident only briefly interrupted Silva's trip down Esplanada de Ministerios to Congress.

A short time later, security guards pushed away a man who broke through barriers, rushed to the car and hugged Silva. The incoming president let the man hug him, then continued waving to the crowd.

And just before Silva walked on a red carpet into Congress, several young people broke through police lines at the side of an artificial lake, jumping into the water to be closer to the future president.

Leaders and representatives of 119 countries - including Cuban leader Fidel Castro and presidents of six other Latin American nations - were attending the inauguration.

Venezuelan President Hugo Chavez arrived Wednesday morning in Brasilia, the capital, leaving behind a crippling strike in his country that has virtually paralyzed oil production for the world's fifth largest exporter.

But the most prominent guest was Cuban President Fidel Castro. Castro, 76, looked healthy and in good spirits after recovering from a serious leg infection that kept him out of sight in Cuba for two weeks last month.

As he entered a Brasilia hotel, Castro waved to photographers and said that he was happy Cuba no longer holds the "monopoly of Jan. 1," the day that Cubans celebrate the revolution that brought Castro to power.

Silva counts Castro and Chavez among his friends. On Thursday, Silva plans to have breakfast with Chavez and lunch with Castro. The United States sent U.S. Trade Representative Robert Zoellick. Zoellick and Sen. Michael Enzi, a Wyoming Republican, met Wednesday morning for an hour with Antonio Palocci, Silva's finance minister.

"It was a listen and learn visit, in which the basic economic problems of Brazil were discussed," Zoellick said in a statement. Silva, 57, takes over from Fernando Henrique Cardoso in Brazil's first transition between two democratically elected presidents in over 40 years. He will be Brazil's 36th president.

A former radical who used to espouse socialism, Silva has promised to end hunger and economic misery in a country where an estimated 50 million of the 175 million citizens live in poverty. But he faces huge challenges: inflation has crept into the double digits for the first time in years, and a regional economic crisis that has plunged Brazil's neighbors into financial chaos.

Brazil's currency, the real, lost 35 percent of its value against the dollar last year, reflecting investor concern over whether Silva will keep his pledge of financing the country's large foreign debt burden - or whether Brazil will default, as Argentina did a year ago. People watching the ceremony said Silva is up to the job but will have a tough time keeping his campaign promises.

"I hope he's going to change things, but it's a huge challenge for him," said Fabiane Cristina, a 20-year-old baby sitter who lives in Brasilia.

In a break with tradition, organizers set up huge TV screens in the park and a stage where Brazilian pop groups started playing hours before the inauguration. Hundreds of outdoor stalls sold everything from grilled pork and beer to T-shirts.

Brazilian pop music superstar Gilberto Gil, who will serve as Silva's cultural minister, was one of the first to play.

"Viva Lula!" Gil shouted to thunderous applause from people waving red flags and dressed in the red and white of Silva's party. After a 14-hour bus ride from the financial capital, Sao Paulo, musician Joao Carlos Souza stretched his legs and changed into a bright red T-shirt reading "100 percent Lula."

Souza said he'd never been to a Brazilian inauguration before because the previous events "were for people in suits drinking champagne."

"This time, it's going to be fun to participate in history," he said.

     BRASILIA, Brazil, Jan. 1 (UPI) -- Luiz Inacio Lula da Silva took office Wednesday as the president of Brazil, Latin America's largest country. Known as Lula, the 57-year-old was sworn in at Congress amid cheers from his countrymen.

     "I am the No. 1 public servant of my country," Lula said in his speech, according to O Globo newspaper in its Wednesday edition on its Web site.

     He said he doesn't believe in sudden changes although the hallmark of his government will be change, according to O Globo, quoting him as saying, "We must walk with thought and solid steps." During his campaign, Lula pledged to reduce hunger in Brazil, a nation of some 170 million, with many of them living in poverty.

     Some have doubts regarding Lula's ability to govern, particularly when it comes to dealing with Brazil's $230 billion in foreign debt, and there is speculation as to whether he might default on it.

     Lula captured the presidency by winning the runoff election Oct. 27. He is Brazil's first leftist president, and succeeds Fernando Henrique Cardoso.

01 Jan 2003 20:33

(Updates throughout)

WASHINGTON, Jan 1 (Reuters) - The first day of the new year saw ongoing preparations for a possible war against Iraq, historic political change in Latin America's biggest country and new airline security measures to guard against terror attacks.

Against the backdrop of continuing economic uncertainty, people worldwide welcomed 2003 at scores of celebrations, where tight security prevented serious incidents.

U.S. air authorities marked the new year by screening all checked luggage for explosives in answer to the Sept. 11, 2001, attacks on the United States. Before the hijacked airliner attacks, just 5 percent of the bags were checked.

In New York, up to 1 million people had a night of celebration under tight security, watching the traditional crystal ball drop in Times Square.

As in other cities across the globe, thousands of extra police were on duty. The Coast Guard closed New York harbor to private boats in response to a threat of attack that never materialized.

In London and Paris, tens of thousands celebrated and extra police patrolled after recent arrests of suspects on terror charges. Cars were banned around Paris' famed Champs Elysees.

Violence and accidents claimed some lives, with a grenade attack killing nine and wounding more than 30 in the Philippines and a fireworks explosion in Mexico killing at least 37 and injuring dozens more in the port city of Veracruz.

PROSPECT OF WAR

The U.S. military proceeded with a buildup in the Gulf, moving into position for a possible war with Iraq with the deployment to commence of a full Army combat division, the first to the region since the 1991 Gulf War.

More than 11,000 desert-trained troops were soon to begin heading to the region, where U.S. President George W. Bush has threatened Iraq with attack if President Saddam Hussein does not disarm.

In Baghdad, U.N. weapons inspectors took no break for the holiday, as they searched for evidence of chemical, biological or nuclear weapons programs.

With tensions worsening between the United States and North Korea as well, Pyongyang issued a New Year's message calling on its people to build "a powerful nation" under its "army-based policy." North Korea has started reactivating a complex capable of producing weapons-grade plutonium and has expelled U.N. inspectors monitoring it.

In Vatican City, Pope John Paul II appealed for peace on all fronts in his first message of 2003.

"In the face of today's conflicts and the menacing tensions of the moment, yet again I invited prayer to pursue pacific means for settlement," he said during his homily to celebrate the Roman Catholic Church's World Day of Peace.

POLITICAL CHANGE

In Brazil, throngs were celebrating the start of a new political era as former metalworker Luiz Inacio Lula da Silva was sworn in as the first working-class, elected leftist president of Latin America's largest country.

In Venezuela, a 31-day general strike that has choked the country's lifeblood oil business dragged on with a large New Year's street party that organizers said was a show of determination to oust populist President Hugo Chavez.

In the United States, Americans began the year facing the prospects of continuing economic uncertainty, with concern about the consequences of potential war with Iraq casting a pall over 2003 prospects much as the aftershock of the Sept. 11, 2001, terror attacks did last year.

Bad weather also delayed Philadelphia's annual "Mummers Parade," with organizers fearful rain and wind would damage the Mummers' famed fancy costumes and fanciful displays.

SUSANNAH A. NESMITH, Associated Press Writer Wednesday, January 1, 2003

(01-01) 11:17 PST (AP) -- CARACAS, Venezuela -- President Hugo Chavez left his strikebound and politically riven country Wednesday to attend the presidential inauguration in Brazil, and again refused to bow to opposition leaders who have crippled Venzuela in a month of massive protests.

"It's not a strike, it is a conspiracy," Chavez said after arriving in Brasilia for Luiz Inacio Lula da Silva's swearing in. "Venezuelan workers are on the side of the government. ...The country hasn't stopped."

It wasn't immediately known when Chavez would return, though he was not expected to stay abroad for more than a day. He and Silva planned to have breakfast together Thursday morning. The strike, which began Dec. 2, has paralyzed Venezuela's all-important oil industry and caused gas lines and food shortages.

Venezuela is the world's fifth-largest oil exporter, and the crisis has helped push international oil prices above $30 per barrel.

Opponents blame Chavez's leftist policies for a severe economic recession and accuse him of trying to accumulate too much power. Chavez says he is ridding the country of a corrupt political system that has disenfranchised the poor.

In his New Year's Eve address, Chavez said the country would face more difficulties in the coming months. On Wednesday, he said he didn't know how long the strike would last but said it was "destined to fail."

"I don't think it's a matter of time," Chavez said. "Whether it's a week, one month, six months, the important thing is that they are destined to fail because we are in the right and have the support of the majority of the country."

Since the strike began, Venezuela has been forced to import gasoline and food. Brazil has shipped 525,000 barrels of gasoline, and Trinidad and Tobago said 300,000 barrels would arrive Wednesday.

Chavez has also fired dozens of striking workers at the state-run oil company, Petroleos de Venezuela S.A. The oil industry produces one-third of the country's gross domestic product and 70 percent of its export revenue.

Thousands of people gathered in downtown Caracas on New Year's Eve at political rallies -- one to demand Chavez's ouster, another to show support for the beleaguered president. On Wednesday morning, the city was quiet as workers swept up the refuse of the previous evening.

Opposition leaders said they had nothing planned for Wednesday, but Chavez's trip to Brazil was daring given the upheaval shaking Venezuela. He already survived one brief coup in April.

Strike leaders said Tuesday that if Chavez does not bow to demands for a nonbinding referendum on his presidency on Feb. 2, they will lead a march on the heavily defended presidential palace.

A similar march in April left 19 dead and prompted the failed coup.

Chavez says Venezuela's constitution only allows a binding referendum in August 2003, or halfway into his six-year term.

Negotiations between the government and the opposition were to resume Thursday.

Also Wednesday, lawyers for dissident National Guard Gen. Carlos Alfonso Martinez complained their client was being kept under house arrest, violating a court order granting him complete freedom.

Ten people were injured when Martinez -- one of dozens of military officers who have occupied a Caracas square for three months in rebellion against Chavez -- was arrested Monday.