www.enn.com Friday, February 14, 2003 By Michael Astor, Associated Press

RIO DE JANEIRO, Brazil -- President Luiz Inacio Lula da Silva extended a six-year-old moratorium on logging mahogany for another 150 days on Thursday to allow a commission to examine options for sustainable harvesting.

The tropical hardwood is one of the most valuable tree species in the Amazon region. Logging it has caused much rainforest destruction.

But logging also accounts for about 15 percent of the economy in the Brazilian Amazon and is responsible for about half a million jobs in the poor and sparsely populated region. The ministry estimates that mahogany logging between 1971 and 2001 generated about US$3.9 billion for Brazil.

Many scientists believe tropical hardwood species can be logged in a sustainable way using a series of practices that allow valuable trees to be cut down with a minimum of impact to the surrounding forest. There are areas then left untouched for decades to allow the forest to regenerate.

Because no study has accompanied the forest regeneration over the 40 or 50 years a mahogany tree needs to grow to maturity, the efficacy of these practices remains unproven.

In November, the Convention of International Trade in Endangered Species voted to limit trade of bigleaf mahogany by listing it as a threatened species. Brazil, Bolivia, and Peru -- the countries with the largest mahogany reserves -- opposed the measure, claiming their conservation measures were sufficient to protect the tree.

The newly formed commission that will look at sustainable harvesting also has been charged with making sure Brazil complies with endangered species convention, the ministry said.

The current moratorium prohibits mahogany logging except by companies that had management plans approved by Brazil's environmental protection agency prior to 1996, when the measure took effect. According to the environmental protection agency, there were almost no companies with approved management plans.

The agency has seized more than hundreds of thousands of cubic meters (yards) of illegally logged mahogany since the moratorium was put in place, likely only a fraction of what made its way to market.

Some environmental groups have criticized the moratorium, saying that by making virtually all mahogany logging illegal, loggers have little incentive to employ forestry management practices.

washingtontimes.com By Carmen Gentile UPI Latin America Correspondent

     SAO PAULO, Brazil, Feb. 13 (UPI) -- Brazil's president told his nation Thursday that he had inherited a grave situation and that the policies adopted by his predecessor did not prioritize economic growth or great equity in the distribution of income.      Luiz Inacio Lula da Silva painted a dire portrait of Brazil saying that income distribution had remained unchanged for the last 30 years and that former President Fernando Henrique Cardoso did little to change that during his eight-year mandate.      "But I was not chosen to lament, rather to face this situation," said Lula, who since assuming office on Jan. 1 has been steadily pushing for comprehensive reform in an attempt to narrow one the world's largest economic divides.      Brazil's left-wing leader stressed that the need to reform government institutions such as pension programs, welfare and taxes "was urgent" so that the country could grow and foster greater social cohesion.      Lula's dire assessment and demand for change came on the same day of the first meeting of his Council of Economic and Social Development.      Known locally as the CDES, the group of 82 non-elected business and labor leaders will advise the administration on how to cure Brazil's various social and economic woes and assist in the development of a reform package to present to Congress.      The president went on to assure Brazilians that CDES members were not chosen "because they are friends of Lula, or of his Workers' Party," nor would they diminish the role of elected officials. Rather, the council, said the president, would provide private citizens the opportunity to assist in forging their country's future.      "The council will not, under any circumstances, substitute nor will it diminish the power of the National Congress, which, in the Brazilian democratic system, is the privileged forum for the country's strategic deliberations," Lula said.      "The search for consensus in society, the search for an authentic strategic social accord, can be very useful to the work of the executive and the legislature itself, without removing any of its prerogatives, instead, adding to their importance."      Some elected officials, however, don't see it that way.      Jose Carlos Aleluia, a leader in Brazil's lower house and member of the right-leaning Liberal Party, said he didn't recognize "the party as a deliberative organ" and "guaranteed that Congress won't accept reform proposals" put forward by the CDES.      Some analysts are forecasting pitfalls in Lula's future for introducing what amounts to another, unofficial branch of government in his quest to implement reforms.      While the approval of the CDES may help create consensus among voters, it "might create some tension" with Congress, where Lula's Workers' Party does not hold a majority, predicts Tendencias Consulting Group analyst Christopher Garman.      "The government will play it up as, 'We are consulting society,'" said Garman, "though Congress could end up regarding it as an unnecessary mechanism that could subvert its authority."

www.brazzil.com Brazzil Politics March 2003

President Lula has gone back to being a timid tortoise. Style and not substance is marking his government. His showpiece Zero Hunger campaign, for example, is losing its impetus. The President is showing that he is prepared to listen, but leadership demands action.

John Fitzpatrick

Some years ago I was talking to a São Paulo-based Swiss banker about the glacier-like slow pace of institutional change. He quoted former President Fernando Collor de Mello as having said that "In Brazil, time takes time." I was struck by this phrase although it may be apocryphal because I have never encountered it and would be grateful to any reader who could confirm it.

However, the essence of the remark is certainly true. There are many reasons for this situation—the size of the country, the strong regional loyalties, the weak state of the political parties etc—and it is unlikely to change in the near future.

One of the reasons it will not change is that vested interests will not permit it. Unfortunately, President Luiz Inácio Lula da Silva is showing no sign of shaking the system up. The man who (thankfully) jettisoned a lifetime's convictions overnight and convinced the Brazilian people to put their trust in him has gone back to being a timid tortoise instead of using the momentum to streak ahead like a hare.

Style and not substance is marking his government. For example, the showpiece Fome Zero campaign against hunger is losing its impetus. An ambitious project like this would always be long term but the goodwill—the Portuguese expression boa vontade gives a better idea of the vibrancy and enthusiasm for this campaign—is already petering out. The minister in charge, José Graziano, has been an uninspiring leader.

In an unfortunate gaffe, he recently suggested that hungry Northeasterners were coming to São Paulo to take up crime. By implication, he said, ending hunger would mean that the law-abiding citizens of São Paulo would no longer need to drive around in armored cars. I believe Graziano's remark was taken out of context but by speaking as he did, he appeared to be slandering a large part of the Brazilian population, including his own boss, the President.

More worrying than this is the government's attitude towards pension and tax reform. Brazil's iniquitous pension scheme pampers public employees and throws private sector workers to the wolves, even though it is the private sector which raise the taxes to pay the public employees' salaries and pensions. Bridging the gap between what the government has to pay in pensions and what it raises in revenues is one of the reasons why the Brazilian economy is being held back. Lula said tackling pension would be a priority. This was excellent news since the PT has been against reform.

However, the minister responsible, Ricardo Berzoini, has vacillated over the kind of reform. One of the main issues has been whether to have a single system for everyone, including serving civil servant and the armed forces, or separate systems. The minister said this week that he had practically abandoned the idea of having a single system yet, at the time of writing, the chief of staff, José Dirceu, has stated publicly that no decision had been made.

This is not the first public telling off ministers have been by Lula's two strong men—Dirceu and the finance minister, Antonio Palocci. Instead of overruling their subordinates and telling us that no decisions have been made it would be heartening if these men at the center of power told us what decisions have been made and what was going to happen.

It is about time Lula took the pension issue on and made it as much of a priority as the Fome Zero scheme. Lula is in a good position to get this reform really moving. First of all he is enjoying enormous approval ratings, much more than his predecessor, Fernando Henrique Cardoso, ever enjoyed. A poll at the beginning of February gave him a personal approval rating of 83.6 percent and his government an approval rating of 56.6 percent. On top of that, 65.6 percent believe Lula will succeed in reforming the pension system. To this observer, this figure is quite astonishing and shows that there is much wider support for this reform than would be expected.

However, instead of assuming responsibility and striking while the iron is hot, Lula has turned the matter over to a recently created body called the Economic and Social Development Council. This group of 82 worthies from all sectors, ranging from business leaders to trade unionists and landless peasant representatives was set up to advise the government on social and economic issues.

The observer could conclude that establishing this council when the country, which already has a Congress which is supposed to be tackling Brazil's problems, shows that the Congress is being sidelined. Perhaps the council will be dynamic and come forward with ideas, but it is unlikely that such a disparate range of opinions will agree on something as contentious as pension reform. It will certainly take time and even then the Congress will have the final word.

By spreading the net and bringing in more views Lula is showing that he is prepared to listen. But leadership demands action. Time is pressing. Instead of thinking of the legacy he could leave in four years time—or even eight years if he were to win a second election—Lula is being urged by some advisers to think of the negative effect contentious reforms could have on the congressional elections in two years time. He should reject this view and, while listening politely to the views of the council, push through the necessary measures using his popularity as a weapon.

As to tax reform I think we can almost forget it. At the inaugural meeting of the council, finance minister Palocci stated bluntly that there would be no reduction in the tax burden, as the government needed the resources. So those of us who pay taxes can look forward to surrendering around 36 percent of our income to the government. This is a higher rate than in some developed European states, which provide their citizens with security, health care and educational opportunities for their children. We pay First World taxes for Third World services and will continue to do so for a long, long time.

John Fitzpatrick is a Scottish journalist who first visited Brazil in 1987 and has lived in São Paulo since 1995. He writes on politics and finance and runs his own company, Celtic Comunicações—  www.celt.com.br , which specializes in editorial and translation services for Brazilian and foreign clients. You can reach him at jf@celt.com.br 

© John Fitzpatrick 2003

You can also read John Fitzpatrick's articles in Infobrazil, at www.infobrazil.com

www.newsmax.com NewsMax Wires Saturday, Feb. 15, 2003

SAO PAULO, Brazil -- Brazil's president spoke with regional leaders Friday proposing a meeting to discuss the consequences of a U.S. showdown with Iraq.

In his telephone conversations with the presidents of Argentina, Chile and Ecuador, Brazilian leader Luiz Inacio Lula da Silva reportedly discussed how heightened tensions in the Middle East and the possibility of war have already adversely affected the economies of their respective nations.

"The war menace has already caused negative economic consequences to Brazil, even though we are we are many kilometers away from the point of conflict stage of the conflict," stressed presidential spokesman Andre Singer.

"The consequences could be much more perverse than they already have been."

Along with global markets, Brazil, too, has experienced a slump in its leading economic indicator -- the Bovespa index -- and its currency -- the real -- has posted regular losses in recent weeks.

Its neighbors are also reportedly feeling the sting of rising fuel costs due to concerns about stymied oil supplies in the event of prolonged fighting and global economic malaise caused by war concerns.

The Lula administration had remained upbeat about its economic situation until as recently as Thursday when Finance Minister Antonio Palocci said "an eventual war will not provoke a crisis for Brazil" despite the ill effects the continent's largest economy has already experienced.

'Best Possible Scenario'

Lula's Chief of Staff Jose Dirceu assured Brazilians this week that the president and his Cabinet "have worked toward creating the best possible scenario" in the event of a war to ensure the stability of the economy, though did not specify exactly what measures were taken.

Brazil has, however, adopted a decidedly anti-war stance since the United States first threatened military action against Iraq, issuing regular statements calling for the Bush administration to defer to the judgment of the United Nation's Security Council.

Earlier this week, the Foreign Ministry said it was "greatly interested in the joint declaration by Russia, France and Germany" denouncing U.S. proposals to use military force to make Iraq comply with council resolutions and remove President Saddam Hussein from power.

Lula now appears to be attempting to rally refiofal stppgrt for Brazil's stance in an effort to make the concerns of South American nations heard by the rest of the international community.

Brazilian officials said earlier Friday that Lula was scheduled to call President George W. Bush and express his concerns about the U.S. stance on Iraq. It was unclear whether Lula did indeed speak with Bush.

Copyright 2003 by United Press International.

All rights reserved.

Read more on this subject in related Hot Topics: Saddam Hussein/Iraq

www.forbes.com Reuters, 02.14.03, 3:17 PM ET SAO PAULO, Brazil, Feb 14 (Reuters) - Brazil's Social Security Minister Ricardo Berzoini denied on Friday the government had withdrawn from plans to unify the country's public and private pension systems, saying proposals on reforming social security are still under consideration. "There is no decision; the discussion is still open," Berzoini said after taking part in a conference on reforming the debt-ridden public pension system. On Thursday, Berzoini had indicated that in the government's reform proposal, the "ideal" would be for new workers to come under new pension rules and existing workers who have already accrued benefits to come under a different set of regulations. That suggested the government was pulling away from its idea of treating all civil servants in the same way as pensioners from the private sector, who have a ceiling for their retirement benefits. Civil servants currently receive pensions based on their final salaries -- meaning some workers retire with full pay, helping the bloated system bleed some $15 billion from government coffers every year. If the government only changed the system for new workers, the reform's benefits would be long delayed into the future. Financial markets are paying close attention to center-left President Luiz Inacio Lula da Silva's efforts in reforming the system after Brazil tried since the early 1990s to change it without success in Congress. Some players see Lula's success on this reform as a key test of the extent to which he has adopted market-friendly economic policies and turned away from past socialist rhetoric. However, Berzoini said the government would not change the rights of benefits already obtained by civil servants in mid-career. "I said yesterday the greater tendency is to seek specific rules for current workers," Berzoini said. "We are not going to attack acquired benefits." The challenge of reforming the public pension system has created a myriad of scenarios, not least due to questions about how to finance benefits during a transition period from one system to another. The debate is likely to get loud and public, not least because many civil servants are traditional supporters of Lula's Workers' Party. Lula's government has said it would send legislation to Congress to reform public pensions by May; but the process could be long-winded, especially as Lula created this week a special advisory council of business, labor and social leaders that will try to reach a common proposal for the government. Reconciling the interests of businesses, civil servants and labor leaders could prove difficult. "Mayors, governors, workers and business leaders will help construct the proposal," said Berzoini.