Luiz Inácio Lula da Silva

name=Luiz Inácio Lula da Silva

Lula's government

Political orientation

After winning the presidency, Lula changed many of his original ideals. His party moved progressively to center-left political position. Instead of deep social changes (as proposed in the past) his government chose a reformist line, passing new retirement, tributary, labor, and judicial laws, and discussing a university reform. Some members of the Worker's Party disagreed with these changes in focus.

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Significant laws

Here are some significant laws passed by Lula's administration, with his support.

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• Social Security Reform of the Civil Service - Passed in 2003, one of the first laws passed by Lula's administration. It aimed to guarantee retirement payments for civil servants for twenty years. In Brazil, civil servants and private sector employees are subject to different retirement and social security legislations. Critics (like critics of similar reforms around the world) say the law decreased the rights of civil servants; the main argument of critics is that Lula and his party were for years against any initiative about this matter.
• Tributary Reform - Partially passed in 2003.
• Judiciary Reform - Passed in 2004.
• Bio-security Law - Regulates activities related to the use of genetically modified materials and other related matters, such as embryonic stem cell research;
• University Reform - Being discussed in 2005.
• Disarmament Law - in order to decrease violence, prohibit citizens from having weapons for personal use, except for certain categories of law enforcement agents (police, judges, etc.).

Social projects

As a left-wing president, Lula da Silva made social programs his priority during his campaign and since his election. Lula states that one of the main problems in Brazil today is hunger. Possibly remembering his early years of poverty and hunger in Pernambuco and São Paulo, he has said that he made the fight against hunger a personal one. Some critics say that hunger is not a real problem in Brazil; the Brazilian Institute of Geography and Statistics IBGE, one of the best-regarded Brazilian public institutions, in 2005 released a survey showing that the number of hungry people in Brazil is far below that assumed by Lula's government. According to FAO, Brazil has 15.6 million undernourished people.

Related Topics:
Hunger - IBGE - 2005 - FAO

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One of Lula's government's best-known social programs is "Fome Zero" (Zero Hunger). This program distributes money to selected regions and cities whose inhabitants suffer severe difficulties. Fome Zero has a governmental budget and accepts donations from the public and international community. Despite massive propaganda, the government has as yet shown few concrete results.

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Another important social program is "Bolsa Família" (Family Aid), which unifies many other government efforts. Its objective is to fight poverty and hunger and it consists primarily of financial aid to families with incomes less than R$100.00 (around US$40.00 at the time of this writing). It demands that the families send their children to school and keep their vaccines up to date. There is some criticism about the program's effectiveness.

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Economy

The single most important member of Brazil's economic cabinet is the Minister of Finance Ministro da Fazenda, who is largely responsible for all economic decisions.

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Lula's Finance minister is Antonio Palocci, member of Lula's party (PT), physician by profession, and previous mayor of Ribeirão Preto. As mayor, Palocci privatized the telephone and Water company owned by Ribeirão Preto, and was much criticized by his own party. He was considered the best choice by Brazilian businesses and the international economic community.

Related Topics:
Antonio Palocci - Physician - Ribeirão Preto - Telephone - Water

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PT and Lula chose a prominent market figure for President of the Brazilian Central Bank, the Brazilian economic authority. This person was Henrique Meirelles, who was consequently approved by the Brazilian Senate. Meirelles was well known to the market, both at home and internationally, and had previously occupied high level offices at BankBoston. Meirelles was elected to the Chamber of Deputies in 2002 as a member of the PSDB (opposition to President Lula's party), but had to resign that position before becoming President of the Central Bank.

Related Topics:
Brazilian Central Bank - Senate - BankBoston - PSDB

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Lula and his cabinet followed in part the ideals of the previous government, by renewing all agreements with the International Monetary Fund (IMF), which were signed by the time Argentina declared its default in 2001. His government achieved a satisfactory primary budget surplus in the first 2 years, as required by the IMF agreement. Actually, Lula increased the surplus target without asking the IMF.

Related Topics:
International Monetary Fund - Argentina - 2001 - Budget surplus

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Lula strongly invested in international commerce to jump-start the Brazilian economy. He has signed political and economic treaties with countries like Russia, China and South Africa.

Related Topics:
Russia - China - South Africa

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By the time Lula was considered the favorite in the 2002 elections, fear of drastic measures (and comparisons with Hugo Chávez of Venezuela) increased internal market speculations. This led to low demand for sovereign bonds, a rise in inflation rate, currency attacks, and a rise in the sovereign risk factor attributed by Moody's to Brazil's bonds to more than 2000 base points.

Related Topics:
2002 - Hugo Chávez - Venezuela - Moody's - Bonds

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Two years after the election, Palocci is still slowly but firmly gaining the market's confidence, and sovereign risk measures fell to around 500 points. The government's system of inflation target kept the economy stable, and was complimented during the World Economic Forum of Davos in 2005. However, the system is publicly criticized by a number of important members of the government.

Related Topics:
World Economic Forum - Davos - 2005

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The 2005 economic agenda includes a debate for greater economic authority for the president (like in a number of other countries and in the European Union), and a debate on labor reforms.

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Foreign policy

Lula has an assertive foreign policy to unify opposition among poor and undeveloped countries against the Washington Consensus in order to to push for better terms of trade in the Southern Hemisphere. This was seen as one of the reasons for the walkout of developing nations and subsequent collapse of the Cancun World Trade Organization talks in 2003 over G-8 agricultural subsidies. Brazil assumed an important role in international politics and is becoming a regional leader in a fertile dialogue between South America and developed countries, especially the U.S. It played an important role in negotiations in internal conflicts of Venezuela and Colombia, and concentrated efforts on strengthening MERCOSUL/MERCOSUR.

Related Topics:
Washington Consensus - World Trade Organization - 2003 - G-8 - MERCOSUL/MERCOSUR

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During the Lula administration, Brazilian foreign trade increased dramatically, changing from a budget deficits to several surpluses since 2003. In 2004 it achieved a US$ 29 billion surplus due to substantial changes in its commercial focus. Since then, Brazil has been looking for new exchanges with other large underdeveloped countries and regions, such as China, the Middle East and Africa. A record surplus is expected in 2005, despite the relatively low value of the local currency against the US dollar.

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Another of Lula's key proposals is a small Tobin tax on international financial transactions that will go to fund developing nations. Brazil also sent troops to Haiti to show its resolve as a global player, and is currently pushing for a permanent seat on the United Nations Security Council.

Related Topics:
Tobin tax - Brazil - Haiti - United Nations Security Council

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Corruption scandal

In spite of the Worker's Party reputation for clean and efficient government at the local level, a burgeoning corruption scandal in mid-2005 threatened to destroy Lula's government. After Brazilian Labour Party (PTB) leader Roberto Jefferson was implicated in a bribery case, he accused the Worker's Party in June of paying members of congress illegal monthly stipends to vote for government-backed legislation. Then in August, campaign manager Duda Mendonça admitted that he had used illegal money to finance Lula's electoral victory of 2002. Lula's previously high popularity ratings fell and his re-election in 2006 was thrown into doubt.

Related Topics:
Brazilian Labour Party - PTB - Roberto Jefferson - Paying members of congress illegal monthly stipends to vote for government-backed legislation - Duda Mendonça

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