Lula’s surprising legacy

How the outgoing President turned around a troubled nation

Eraldo Peres/AP

Last month, the nonagenarian Brazilian socialite Lily Marinho hosted an extraordinary event at her Rio de Janeiro mansion—a political endorsement for the ruling Workers’ Party presidential candidate Dilma Rousseff. Over champagne, salmon remoulade and passion fruit crepes, Marinho introduced Rousseff as “Lady Democracy” to the 40 powerful women assembled at her grand colonial home. When a reporter asked her if she would be hosting luncheons for the eight other candidates, the bejewelled Marinho shot back from her wheelchair, “No, just for her!”

While Rousseff, the 62-year-old frontrunner in Brazil’s October vote, basked in the adulation, Brazil’s president and Rousseff’s former boss, Luis Inácio Lula da Silva, 64, must have been savouring the turn of events. After all, when he first took office in 2003, members of Marinho’s rareified circle worried that he would take Latin America’s biggest economy down the road to ruin, turning the country into a Marxist banana republic.

In fact, before his death in 2003, media baron Roberto Marinho—Lily’s husband—worked actively against Lula. During Lula’s first presidential bid in 1989, Marinho ensured that his Globo TV empire supported Lula’s principal opponent, Fernando Collor de Mello, the right-wing governor of Alagoas state, whose short-lived rule of Brazil proved a major disaster. His economic reforms went nowhere and he resigned amid accusations of influence-peddling and corruption in 1992. “Stop for a minute and look back to 2002,” Rousseff told the Rio socialites at the luncheon. “Understand just how different this country has become. Twenty-four million Brazilians have left poverty and 31 million others have entered the middle class. The country grew and companies grew.”

Indeed, Lula has poured billions into social programs to alleviate hunger and improve education. The efforts seem to be paying off. Brazil’s income gap—one of the world’s biggest—is shrinking while the bottom 10 per cent of the population saw their income rise by nearly 60 per cent between 2001 and 2006.

In March, he launched the second phase of an investment scheme that will pump more than US$800 billion into everything from roads to housing to renewable energy. Even Lula’s former rival, Collor, now a senator, recently described Lula as “the best president Brazil ever had.”

Many would agree. Lula proved full of surprises. Instead of the raving Marxist feared by the upper and middle classes, the married father of five built on the tough economic plan of his predecessor Fernando Henrique Cardoso. Sustained growth and curbs on inflation helped the economy improve from its periodic bouts of hyperinflation, and steadied the shaky currency. Last year, Brazil’s real was the fifth-best performing industrialized currency in the world, rising 30 per cent against the U.S. dollar.

A growing economy—GDP will increase by nearly six per cent this year—and a burgeoning export sector have bolstered Brazil’s position on the world stage. While the country still has areas of chronic underdevelopment, it has emerged in the last two years as a major donor nation. The Economist recently noted that its total development spending could top US$4 billion a year, on par with more traditional donor countries such as Sweden and Canada. In recent years, Brazil has played an important role as head of the UN stabilization force in Haiti. “Lula’s legacy is that he actually opened up a space for Brazil on the world stage,” said Annette Hester, a Calgary-based associate at the Center for Strategic and International Studies. “It’s true he could have done a lot more for Brazil internally, but he created a new paradigm—a democratic leader who rises from the lower classes in Brazil.”

The seventh of eight children, Lula was born in Brazil’s hardscrabble northeast. He left school in the fourth grade to help support his single mother, who had moved her family to São Paulo in search of a better life. From about the age of 12 Lula worked as a street vendor and a shoeshine boy. Later, he worked as a lathe operator and became deeply involved in union politics. He was one of the founders of the Workers’ Party in 1980. His years involved with union leadership, says Hester, made him “a wise and skilled conciliator.”

That’s probably why he is so comfortable with everyone from U.S. President Barack Obama to Venezuelan strongman Hugo Chávez. And he hasn’t shied away from controversy. Earlier this year, Brazil plunged into the Iranian nuclear debate. Lula warned the U.S. that sanctions on Iran over its nuclear program could lead to war. “We don’t want to repeat in Iran what happened in Iraq,” he said. Brazil’s powerful multinational oil company Petrobras has made important inroads in Iran during Lula’s two terms in office. At the same time, he’s forging strong ties with Israel. He is the first Brazilian leader to visit that country, and wants to be considered a peacemaker in the region. And, according to Hester, Brazil is now demanding more influential roles on world bodies such as the UN Security Council and the International Monetary Fund. The country will host the World Cup in 2014 and the 2016 Summer Olympics.

And while he is backing Rousseff—the daughter of a Bulgarian émigré is a political lightweight whose only federal government experience is working as Lula’s energy minister and chief of staff­—in the upcoming election, Lula, whose popularity is over 80 per cent, has indicated that he may not be done with politics.

He is barred from pursuing a third consecutive term, but has indicated that he may take another shot at the country’s top job in 2014.

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