www.lapress.org Tuesday,  March 4,  2003 Elza Fiúza/ Agencia Brasil Ricardo Soca.  Mar 3, 2003

"Zero Hunger" by 2007 was the promise made by Brazil' s President Luiz Inácio Lula da Silva when he served up a program to eliminate poverty and malnutrition Jan. 30. An estimated 50 million Brazilians, nearly one-third of the population, live in poverty (LP, Jan. 15, 2003).

At the program launch in Brasília, Da Silva also swore in the new members of the National Food Security Council (CONSEA), made up of cabinet ministers, legislators, governors, trade unionists, business leaders and representatives of indigenous and civil society movements. CONSEA will develop the program in partnership with the Ministry of Food Security and the Fight Against Hunger, headed by José Graziano. The Council was previously founded and disbanded respectively by ex-Presidents Itamar Franco (1992-94) and Fernando Henrique Cardoso (1994-2002).

Da Silva emphasized that the "Zero Hunger" program does not just mean more food. He aims to implement structural measures that will combat the causes and effects of hunger, targeting the most marginalized social groups in an effort requiring "the mobilization of society."

Da Silva recognizes the urgent nature of the program. "Those who are hungry can t afford to wait another day," he said. "Our fight against hunger is a fundamental step towards eliminating misery, poverty, the lack of opportunities and social inequality."

Food security, according to Da Silva, can only be guaranteed by increasing food demand, lowering the prices of essential foodstuffs and providing assistance in hunger-related emergencies. To do this, he intends to boost rice and bean production by 30 percent, at the same time creating 350,000 new jobs in the agriculture sector.

"Zero Hunger" consists of 60 action plans split into three groups and is set to be fully operative by August. The three-pronged attack aims to tackle hunger on "structural," "specific" and "local" levels. This involves increasing food production via technical training, assisting families in extreme situations and decentralizing the program to include the participation of civil society and 5,600 municipalities.

Da Silva has committed US$1.4 billion to the program in its first year, including $500 million in state funds and the remainder from other ministry programs, the World Bank, the Inter-American Development Bank and the United Nations (UN). "In Brazil hunger can be represented by a half empty plate or the acceptance of just one meal a day," said Andrew MacMillan, of the UN Food and Agriculture Organization. "In the long run this weakens the people and undermines the development opportunities in a country filled with potential."

"Zero Hunger" kicks off at the end of February with pilot programs in Acauá and Guaribas, in the northeastern state of Piauí. Electronic cards are to be distributed to 716 families with which they will be able to draw $13 a month from state-owned banks to cover their food needs. The cards are renewable every three months, subject to proof of sale receipts.

The program, despite receiving widespread popular support, came under fire from conservatives as well as some CONSEA members, including Mauro Morelli, Bishop of Duque de Caxias in Rio de Janeiro, who can t stomach the idea of controlling what beneficiaries buy.

World Bank officials share Morelli s critique, calling such controls pointless because hungry people do not waste money on products other than food anyway. Conservative commentators have called the program "a political marketing program that sells redemption for remorse."

Further discontent was expressed over the slow start to the program, limited to a small corner of Brazil. "We had to start somewhere and give priority to one area in particular," explained Rev. Carlos Livanio Christo (better known as Frei Betto), Da Silva s special "Zero Hunger" advisor. "Little by little the program will extend nationwide", said the priest.

Government goals target aid such as food banks and public dining halls for 1.5 million families in 1,000 municipalities across the semiarid region of the northeast, one of the poorest parts of the country, by the end of 2003. Da Silva s Minister of Cities, Olivio Dutra, intends to link "Zero Hunger" with his program "Zero Thirst", aimed at bringing an end to chronic water shortages in the same region.

With Da Silva s public approval at almost 84 percent, the new president appears to have the nation behind him. Politicians across the spectrum, as well as media moguls, businessmen, bankers, and trade union leaders, have lent their solidarity and support in the fight against hunger and poverty.

www.washingtonpost.com By Jon Jeter Washington Post Foreign Service Monday, March 3, 2003; Page A12

 	President Luiz Inacio Lula da Silva is considering revisions to a pension system that gives full pay to many retired workers. 

RIO DE JANEIRO -- To understand the difficulties facing Brazilian President Luiz Inacio Lula da Silva, get to know Carlos Borges.

The 46-year-old Borges is, in his own words, "just a regular Joe" who has put in 25 years on municipal road crews in Rio de Janeiro and is looking forward to retiring 10 years from now. No one, he said, cheered more loudly when voters in October elected Lula, as Brazil's leader is commonly known, as the first working-class president of this country of 176 million people.

But few have more to lose than Borges, depending on how Lula crafts a plan to reduce the generous public pensions that bog down this country's already indebted public treasury.

"I know that there is much pressure on Lula to cut our pensions," Borges said recently over a cup of espresso on a sizzling hot afternoon. "But many people like me voted for him because we felt the previous government paid too much attention to the bankers and the business community and ignored the needs of the poor and the ordinary workers. We voted for him because we see Lula as one of us and if he cuts our pensions, many of us will be very, very disappointed in him."

Borges's concerns reflect the political balancing act that the new president encounters in an attempt to reconcile the expectations of the broad coalition that catapulted him into office -- made up of the poor, the liberal middle class and disaffected business interests -- with the concerns of prosperous Brazilians and international lenders whose disengagement can wreck both his government and the fragile economy he is trying to manage.

The Brazilian retirement system, which doles out full-pay pensions after 35 years of service for many civil servants, contributed last year to a $20 billion deficit in the social security system and represents 42 percent of all government payroll costs, according to government statistics.

Neither Lula nor any of his advisers has made public any final proposals. But economists say that revisions to Brazil's social security system would likely focus on the ample benefits provided to some civil servants, especially the military, judiciary and police, who often receive more after retirement than they did during active service because they are entitled to wage increases along with active employees.

In the best scenario for people like Borges, lower-paid employees would suffer less than Brazil's higher-level public servants and the military, who can retire after only 30 years and are charged less than the 11 percent payroll deduction for most other government employees. Whether pension reform would treat rich and poor equally is one controversial issue. Another is whether a new plan would affect current recipients as well as new pensioners. Top-ranking military officials, prominent judges, diplomats and others are demanding that they continue receiving special treatment.

"Brazilians have no basis of comparison with other pension systems in other countries," said Richard Foster, a Brazil specialist in Washington who publishes the biweekly Brazil Watch newsletter. "Pension reform in Brazil is like health care reform in the United States, indispensable to the long-term prosperity of the country, but nearly impossible to approve because of special interests."

Heloisa Guerra, for instance, has never held a full-time job. She is 53 and draws a federal pension of nearly $750 a month. Under existing law, the unmarried daughters of high-ranking military personnel receive a lifetime benefit following the death of their parents.

Still, Guerra, like many others here, says that the pensions are one of the few tools that the poor and middle class can depend on to stay afloat in a country deeply divided between rich and poor. "Reforms will make the middle class even poorer," said Guerra. "It's going to hurt society."

Brazilian society is mostly poor, with a minuscule wealthy class and a middle class principally located in southern cities. The consumer price index is running at an annual rate of about 21 percent. But a majority of working-age Brazilians are underemployed and subsist below the minimum monthly wage of less than $100.

The president's support for pension reform runs counter to the way a leader of an organization called the Workers' Party would be expected to behave. A former lathe operator, Lula became famous in the 1980s as a trade union leader in the industrial heartland of Sao Paulo state, campaigning for workers' rights in the automotive industry. Early on, he opposed periodic efforts by the government to change Brazil's pension and retirement laws. Since then, his message has been progressively moderate.

"Pension reform has been the 800-pound gorilla in the room for years," said one Western diplomat. "Everyone knows it but Lula may be the only one with the political capital to do it. This may be the first really big test of his administration."

Less than 90 days into his presidency, Lula enjoys a honeymoon with the nation's news media and draws good reviews from diverse sectors. Last month, he told a gathering of anti-globalization activists in the southern city of Porto Alegre that he is committed to their social agenda. He then shuttled off to Switzerland, where he promised a meeting of bankers, corporate leaders and international diplomats that Brazil will not follow neighboring Argentina into default and will continue payments on its $250 billion public-sector debt.

Also last month, he submitted to Congress a budget proposal with $14 billion in spending cuts but also launched a crusade against hunger, introducing a $1.6 billion federal entitlement to provide food stamp-like vouchers for the neediest Brazilians.

He has been careful, meanwhile, to distance himself from presidents Fidel Castro of Cuba and Hugo Chavez of Venezuela, both of whom attended his inauguration as concerns were raised in the United States and elsewhere about his populist Workers' Party reputation. He has found room in his government for politicians such as Henrique Meirelles, a former executive of FleetBoston and a free-market disciple whose appointment as central bank president appealed to the international financial community.

"What you are seeing is a revolution but it's not a socialist revolution; it is a capitalist revolution," said Congressman Fernando Gabeira, a member of Lula's Workers' Party from Rio de Janeiro. Gabeira is a onetime guerrilla opponent of Brazil's former military dictatorship who participated in the 1969 kidnapping of U.S. Ambassador Charles Burke Elbrick.

"The government is not trying to overturn capitalism but to attract more poor people, more marginalized people to the capitalist center," he said.

One indication of Lula's calming influence has been the absence of any dramatic, sudden changes in economic policy.

"He understands that we have to fight poverty but he's practical about it. What's the use of making beautiful speeches about fighting poverty and then not being able to do anything about it," said Eliezer Batista, a former president of Companhia Vale do Rio Doce, the world's largest iron ore exporter, and an informal adviser to Brazilian presidents.

The new administration faces hurdles down the road. Despite his landslide victory, Lula's Workers' Party controls less than 20 percent of the seats in a fragmented Congress and political analysts say Lula will have to forge coalitions. He won a pledge of support on his pension and tax reforms last week from Michel Temer, leader of the opposition Brazilian Democratic Party, who hinted at joining forces with Lula to create a majority in Congress. "We will support and will approve the reforms," Temer said in a speech before the Chamber of Deputies, the lower house in Congress.

It is still early in Lula's presidency. Crime and entrenched poverty are chronic concerns. The public debt is now equal to nearly 56 percent of the nation's gross domestic product. Foreign analysts are uncertain there will be enough money for Lula to accomplish lasting changes.

"He's really done an impressive job of balancing people's needs so far," said one Western diplomat "But will he be able to maintain that very delicate balance on top of a pinpoint? That's what everyone is waiting to see."

• Disarming Central America Was al Qaeda trying to obtain surface-to-air missiles in Nicaragua? After an OAS investigation finds lax controls, Nicaragua's president seeks a regional solution but needs U.S. help.   

news.ninemsn.com.au 14:26 AEST Sun 2 Mar 2003

AFP - Thousands of masked revellers let loose to a samba beat in the streets of Rio as the first Carnival watched over by Brazil's military for safety's sake hit its frenzied stride.

The muted military shades of armoured vehicles were juxtaposed with the usual flashy carnival fashions, from sequined bikinis to feathered headdresses on the heels of carnival's official start on Saturday.

The eastern military command declined to say precisely how many troops are out in force, days after a wave of violence by drug gang members, including bus torchings and intimidation, sent authorities scrambling to ensure the 400,000 foreign and Brazilian partygoers expected are not caught in the crossfire.

President Luiz Inacio Lula da Silva on Thursday gave the green light to send in 3,000 army troops to try to ensure safe streets for the week of frenzied parties, which already was being minded by 38,000 police officers.

It is the biggest show of force Rio de Janeiro has seen since it hosted the Earth Summit in 1992, when 150 heads of state and government converged on the UN meeting.

Earlier in the week, gangs torched about 30 buses, threw homemade bombs at shop fronts and forced several businesses and schools to close.

Authorities said it was a coordinated bid to get a drug baron freed from a prison outside Rio.

Frightened shop owners had closed their doors in some 20 neighbourhoods here on Monday under threats from gang members, as police patrolled the city trying to bring order back to the streets.

www.time.com March 10, 2003 | Vol. 161, No. 10 BY TIM PADGETT AND ANDREW DOWNIE | BRASILIA

The carnival celebration that sambas through the streets of Rio de Janeiro this week is traditionally a showcase of coordinated public spirit. Class divisions give way to elaborate, egalitarian parades involving millions of people and months of preparation. But this year even Carnival became a reminder of Brazil's poverty-driven violent crime, as drug gangs spread terror through Rio's streets last week on the eve of the big party, killing at least 10. It was one more loud warning that to maintain order over the long term, Brazil has little choice but to tackle its epic social inequality, which is the worst in Latin America, if not the world.

Brazil's fractious and venal political system is usually the last place to look for real leadership on this or any other issue. But these days, alongside images of the Rio bloodshed, there's an uncommon sight that even Brazilian politicians apparently can't ignore: the nation's World Cup-champion football team Sporting Fome Zero (Zero Hunger) T shirts in support of leftist President Luiz In á cio Lula da Silva's ambitious antipoverty program. The team's gesture reflects, for the moment anyway, a rare sense of unified national purpose in Brazil. Last week's headlines also included all 27 of the country's state governors pledging to help Lula and his Workers' Party (PT) achieve crucial tax and pension reforms that will make it easier to fund his social projects — and even Brazil's dysfunctional Congress looks poised to cooperate. "I have to prove I'm capable of doing what previous Brazilian Presidents couldn't," said Lula, who took office Jan. 1. Lula's challenge is to make Brazilian government — which oversees Latin America's largest economy and the world's tenth-largest — work. If he can make that happen, he'll achieve something even more remarkable: a leftist Latin American government that works.

Lula, 57, is pursuing his own, more poverty-focused version of the Third Way, the socialist-capitalist hybrid once touted by European leaders like British Prime Minister Tony Blair. His ultimate goal is to improve the lives of the poor as well as the rich — something the free-market reforms that swept Latin America in the 1990s failed to do — and he's betting that fiscal responsibility will yield more wherewithal to fund a Brazilian "New Deal" that includes everything from hunger eradication to land titles for squatters. This mix of ideologies is also evident in Lula's cabinet. The President himself is a high school dropout, former metalworker and labor union leader, but his handpicked Central Bank president, Henrique Meirelles, is a Harvard graduate and former president of BankBoston. Welfare Minister Benedita da Silva rose from a squalid Rio de Janeiro favela, or slum, and was Brazil's first black female Senator, while Vice President José Alencar is a textile multimillionaire from the right-wing Liberal Party. Culture Minister Gilberto Gil, a pop music star, sports dreadlocks; Chief of Staff José Dirceu wears power suits and helped guide Lula from labor socialist to the more centrist "Brazilian Blair," as Brazilian and Wall Street pundits have taken to calling him.

So far the mix of social crusade and fiscal discipline has won Lula an 84% approval rating — even though he has yet to score a real achievement — and unexpected applause from Wall Street, where frantic fear of him during last year's election campaign helped push Brazil's currency, the real, down by more than 50% against the U.S. dollar. "The left in Brazil has learned the hard way," says Meirelles, referring to decades of populist economic catastrophes that were finally halted by Lula's predecessor, Fernando Henrique Cardoso.

While the markets are now more cheerful about Lula, the PT's radical wing (more than a quarter of the party) seems devastated by his move to the center. They've groused especially loudly about Meirelles and Finance Minister Antonio Palocci, a physician who, as a PT mayor in the '90s, engineered a very unsocialist privatization of local utilities. Both men have pledged to adhere to strict economic targets that the International Monetary Fund set last year in return for a $30 billion loan to Brazil. Senator Heloísa Helena, part of a PT group that wants Brazil to default on its $208 billion foreign debt, says she is "sad and disillusioned" by the government. "Did we win," she asks, "just to be the good little boy for international bankers?"

But Chief of Staff and former PT president Dirceu — who as a radical student leader was exiled to Cuba from 1969 to 1974 by Brazil's military rulers before slipping back into the country with a surgically altered face — has made it clear, with a somewhat high hand, that party discipline now means not criticizing Lula directly. Because it took Lula and the PT 22 years and four elections to win the presidency, says one Lula friend, "he's more cautious about not flaming out and screwing up" like so many Latin lefties before him. In a closed-door meeting last month, Lula warned regional PT leaders, "We can't fail in this economic situation."

Dream Team Lula hopes his diverse cabinet will get the right mix of policiesHenrique Meirelles The Harvard-educated Central Bank president hopes to get inflation down to single digits Jose Dirceu An ex-radical, Lula's chief of staff has guided the President from the far left to a more centrist position Antonio Palocci A former mayor, the Finance Minister has pledged to keep to strict IMF targets Jose Graziano Da Silva As Food Security Minister, the former economist will run Lula's Zero Hunger project Benedita Da Silva Born in a Rio slum, Da Silva is set to help Brazil's poor as the new Welfare Minister

Lula realizes that an erstwhile socialist has to work that much harder to prove he's a market-friendly President. Revenue gaps recently forced Palocci to slash $4 billion from the $75 billion budget (Brazil's most austere in a decade), while Meirelles raised interest rates 4.5 points to 26.5% in hopes of keeping 2003 inflation to single digits. Lula won praise across the political spectrum when, instead of trying to please everyone, he postponed the purchase of fighter jets in order to boost funding for Zero Hunger.

Perhaps the most important — and most immediate — steps that Lula needs to take are pension and tax reform. Brazil has a millstone public bureaucracy: its salaries and pensions take more than 8% of the nation's $1 trillion gross domestic product. Reining in the corrupt pension system, simplifying Brazil's baroque tax code and combatting massive tax evasion could help Lula drop interest rates and free up at least $5 billion — more than half of Brazil's entire education budget — for projects like Zero Hunger. "This government's macroeconomic approach has been impeccable," says Paulo Leme, head of emerging market analysis at Goldman Sachs in New York, noting wryly that the PT used to oppose pension reform. "They understand now that what causes poverty in Brazil is the excessive size of the state."

Will Brazil's Congress understand that too? Lula's bond with the governors, who wield considerable influence over their congressmen, was a critical stroke. But the PT holds only 14 of Brazil's 81 Senate seats and 91 of the lower chamber's 513. In a bid for the support necessary to pass the reforms more quickly, Lula took the risky decision to back former President José Sarney for president of the Senate. Many in the PT view Sarney as a crony of the oligarchs who control the country's impoverished northeast. But the votes to be mined inside the progressive wing of Sarney's Brazilian Democratic Movement Party were too much to resist. Either way, Lula insists that what also leaves a third of Brazilians in poverty, and an estimated 46 million hungry, is gross inequality: 20% of the population receive 70% of the nation's income, while 3% hold almost two-thirds of its almost half a billion hectares of arable land. Lula is careful not to declare a soak-the-rich crusade, and his hesitancy to come out for stiff progressive taxation makes his party's left wing crazy. And it's too soon to tell whether his four-year, $1.5 billion Zero Hunger program will be enough to make good on his promise to the poor. It is his presidency's one indulged, untouchable priority. He has made it a special umbrella ministry, coordinating 60 programs, that is not unlike the new U.S. Homeland Security Department. "This is like war mobilization for us," says special Food Security Minister José Graziano da Silva, an economist and longtime Lula adviser. In addition to food relief, the ministry is charged with attacking the causes of Brazil's malnutrition, such as laughable rural infrastructure and the nation's paltry $60 monthly minimum wage, which Lula hopes to double by the end of his term in 2006.

More important, Graziano and ministers like Benedita da Silva say they're kiboshing the waste, inefficiency and indifference of Brazil's social-welfare programs, converting them from political patronage rackets to engines of economic growth.

Zero Hunger, says Graziano, "is meant most to raise the productive capacity of poor Brazilians." It includes churches, NGOs and, significantly, the private sector: Nestlé of Brazil, for example, will donate 1 million kg of food and 248 small homes to the program this year.

Graziano concedes that Lula will stand or fall on this issue when he faces re-election in 2006; but he declined to pinpoint a gauge for success. Still, says Walder de Goes, a prominent political analyst in Brasília, "If Lula achieves most of the goal of Zero Hunger his presidency will be a success — it will have changed the culture of inequality here. There's no example of change like this in our history."

But De Goes fears economic factors beyond Lula's control — global recession, war in Iraq — could keep him too cash-strapped to succeed. "This year all he can do is muddle through, but starting next year he has to produce real results," says De Goes, who wonders if Lula and his inexperienced team can manage that kind of pressure, especially when so many other Brazilian crises — like violent crime — can't wait either.

Financial analysts like Leme also worry that Meirelles, despite the rate hikes, isn't taking the perennial Brazilian threat of inflation seriously enough. But Meirelles argues that "we're not in recession, growth should be above 2% this year and we've lowered the current account deficit from 4.6% to 1.7% of GDP. We can handle the shocks." At the Davos Forum in January, Meirelles, a dancing enthusiast, slipped on the ice and broke his ankle. He can't samba this week — but if that's the only setback the government has suffered so far, Lula might be able to enjoy his Carnival after all.

With reporting by Sol Biderman/São Paulo

www.theage.com.au Monday 3 March 2003, 08:05AM

Officials in Rio have promised to keep tens of thousands of police and soldiers on the streets to safeguard partygoers, performers and tourists enjoying Carnival from any replay of the violence that wracked Rio last week.

Thousands of extravagantly costumed people filled Brazil's famous Sambadrome, whirling to a frenetic samba beat under the summer sun, while military police patrolled the streets in an unprecedented show of security during Rio's world-famous party week.

"These patrols will be kept in place as long as necessary," Rio state Governor Rosinha Matheus said, warning that they would shoot anyone trying to reignite last week's gang violence.

"The drug traffickers are facing the police and risking death. If that's what they want, that's what they'll get. There will be armed conflict, and if someone has to die, so be it," she said in an interview published in the Jornal do Brasil's Sunday edition.

The security deployment is the biggest show of force Rio de Janeiro has seen since it hosted the Earth Summit in 1992, when 150 heads of state and government converged on the UN meeting.

President Luiz Inacio Lula da Silva on Thursday gave the green light to send in 3000 army troops to try to ensure safe streets for the week of frenzied parties, which was being minded by 38,000 police officers.

Earlier in the week, gangs torched some 30 buses, threw homemade bombs at storefronts and forced several businesses and schools to close. Authorities said it was a coordinated bid to get a drug baron freed from a prison outside Rio, and a protest over prison conditions.

"The bandits were unsatisfied by the ending of privileges in prisons," Matheus said.

Near the Sambadrome, in downtown Rio, another kind of tension was palpable today -- the nerves of performers preparing for the final annual showdown. Over two nights, some 50,000 performers from 14 samba schools will parade before 65,000 spectators.

Parade themes this year include theatre, soccer, pirates and the history of blacks in Brazil. One group has taken on a particularly challenging theme -- organ donation.

Performers are strictly judged in 10 categories, including costumes, rhythm, and originality. A ripped costume, a loose sandal, the blocked wheel of a carriage -- even the smallest detail can cost a coveted victory in the samba showdown.

Leaders were holding last minute rehearsals and helpers were putting the finishing touches on the heavy headdresses of scantily clad models, dancers and actresses hoping to dominate the limelight.

Matheus urged participants and partygoers to forget fear and revel in the festivities.

"They wanted to shut down all business during the week. They didn't achieve that," she said of the instigators of last week's violence.

Asked if she was afraid, the governor replied: "Afraid? Me, no. Anyone could be attacked. If we are prisoners to fear, no one would do anything."