DAVOS-Brazil's Lula urges world fund to fight poverty

www.forbes.com Reuters, 01.26.03, 10:48 AM ET By Mark Trevelyan

DAVOS, Switzerland, Jan 26 (Reuters) - Brazil's new President Luiz Inacio Lula da Silva urged rich countries on Sunday to declare "war on hunger" and create a global fund to fight poverty.

"I propose to form an international fund to fight misery, hunger and poverty in Third World countries," the former trade union firebrand told the World Economic Forum annual meeting in Davos, Switzerland.

He said the fund could be set up by the Group of Seven industrialised nations and supported by international investors. "Many times poverty, hunger and misery are the trigger for fanaticism and intolerance," declared Lula, who took office on New Year's Day as head of South America's most populous nation and the world's ninth-largest economy.

"We need urgently to unite ourselves around a world compact for peace and war on hunger, and you can be sure Brazil will do its share of the work."

In his first major speech before global political and business leaders, he did not elaborate on the proposal.

Lula, viewed nervously by some investors who fear he may hurt the economy with populist policies, has declared a 'Zero Hunger' programme in Brazil and made it the top priority of his centre-left administration.

A FAIRER DEAL FOR DEVELOPING COUNTRIES In an impassioned speech, he dwelt repeatedly on the world's rich-poor divide and the need to fight for a fair deal for developing countries, especially on trade and debt.

"More than 10 years after the fall of the Berlin Wall, we still see other walls that separate those that eat from those that are in hunger; those that have jobs from those that are jobless; those who live in dignity from those who live in the streets or in shanty towns," he said.

"Brazil has to get out of the vicious circle of getting new loans to pay back previous loans...We want free trade, but free trade characterised by reciprocity."

All Brazil's efforts to boost its exports would be useless, he said, if others practised protectionism while paying lip service to free trade.

He pledged to show the same toughness in bargaining with rich countries as in his years of negotiating with employers as a factory worker and union boss.

"We want to respect the rights of all, of everybody. But I also want for others to respect the rights of Brazil. We do not want to be treated as a second-class citizen. We want to be treated on equal terms."

Brazil, he said, was "fighting corruption with great force" and was open to foreign investment.

"Brazil cannot continue to be a sleeping giant. And if God wishes, we will awaken this giant," he said.

Lula, a frequent critic of globalisation, delivered one of the most electric speeches of this year's Davos forum, an event often derided by opponents as an uncaring, arch-capitalist jamboree. He arrived direct from the World Social Forum in Porto Alegre, Brazil, which is sometimes portrayed as an "anti-Davos".

His Davos speech was greeted by warm applause and cheers. "I would like to invite all of you attending this meeting, at this magical mountain of Davos, to look at the world with fresh eyes," he said.

"It is absolutely necessary to build the world economic order to meet the demands of billions of people who live at the margins."