A Leader With a Foot Now in Both Worlds (or Ex-Leftist In the Center As Brazil Wants Again)

www.nytimes.com By TONY SMITH

PÔRTO ALEGRE, Brazil, Jan. 23 — Arriving for last year's World Social Forum here, well before he had been elected president, Luiz Inácio Lula da Silva was blunt in his criticism of the world's top policy makers then gathering for the World Economic Forum in New York.

"The sheer amount of barbed-wire fencing," he said, showed that "what those men there were thinking was no good for the majority of humankind, especially for the poor." Advertisement

This year, Mr. da Silva will stop here only briefly to address the 100,000 or so antiglobalization activists gathered for the third Social Forum before jetting off to Davos to speak to "those men," now back at their traditional venue in the Swiss Alps, but still behind barbed wire.

The fact that Mr. da Silva is willing to rub shoulders with the Che Guevara T-shirts at the Social Forum and the suits in Davos illustrates the fine line he has been walking since taking office on Jan. 1.

On the one hand, Mr. da Silva, a former metalworker, has appeared on television and on magazine covers as popular "Presidente Lula," the caring leader who takes his cabinet on trips to some of Brazil's poorest regions to show he intends to make good on election promises to redress this vast country's appalling social inequities.

Ditching for a while the suits and ties that helped him win over more reticent, conservative voters during last year's election campaign, Mr. da Silva reverted to his working-class roots, touring shantytowns, embracing an AIDS-afflicted child here, comforting a poverty-stricken widow there.

If the popular reaction is anything to go by, Mr. da Silva is managing to persuade Brazil's poorest that their economic lot can improve. Wherever he goes, Mr. da Silva draws a crowd and he plays it like a rock star.

On the other hand, Mr. da Silva has struck a serious note with the markets, nominating an economic team that is bending over backward to persuade investors that Brazil is a safe bet and that unorthodox policies are simply not on the agenda. Its first major policy decision was to raise interest rates this week to their highest level in nearly four years, assuaging fears the new government would be soft on inflation.

The government is also advancing with plans, long awaited by the markets, to reform Brazil's wasteful public sector pension system, inefficient tax laws and archaic labor legislation.

Maybe because of such ambiguity, Mr. da Silva's announcement he would fly to Davos caused furor among radicals on the left of his Workers' Party. Cândido Grzybowski, a member of the Social Forum's steering committee, called the decision "lamentable."

Mr. da Silva was scheduled to speak here Friday before leaving Saturday for Europe.

"The decision to go to Davos had to be a controversial decision because it was a political decision," said Oded Grajew, a co-founder of the Social Forum and now Mr. da Silva's personal aide for social affairs.

Mr. da Silva "wants to show the world that it is possible to combat poverty and misery with at least the same weight as is being given to the fight against terrorism," Mr. Grajew said.

If Mr. da Silva delivers any antiglobalization message, it will most likely be here rather than in Davos, where he will be trying to persuade the international financiers present to reopen credit lines to Brazilian companies. Hundreds of millions of dollars in financing were cut off before Mr. da Silva's election triumph last October, when many were predicting Brazil's economy would collapse.

Given Mr. da Silva's most recent wooing of the markets, however, even Wall Street analysts say he could get a serious hearing at Davos for Pôrto Alegre's main political idea that for world prosperity, the plight of the poor must be addressed.

"Finally there's someone between those two poles of thought who can absorb both points of view," said John Welch, chief Latin American economist at the New York branch of WestLB, a German bank. "All his political life he's been a good negotiator. Maybe he can pull this one off, too."