WORLD VIEW/Paul Gillespie: In his first two weeks in office the new Brazilian president, Luiz Ignacio Lula da Silva, has brought his cabinet to visit a poor village in the north-eastern Minas Gerais state to dramatise his anti-hunger campaign. Food coupons are to be issued to 10 million of the poorest families. He has delayed a €700 million order for new jet aircraft to help fund it. And he has ordered the army to help repair roads in remote regions.
In a colourful inaugural ceremony with reggae and country music singers, Lula, as he is universally known, set out the goals for his four year term. "Zero hunger" comes first - "if at the end of my mandate all Brazilians have the chance to eat breakfast, lunch and dinner, I will have fulfilled the mission of my life." He pledged to create "macroeconomic conditions for there to be sustainable responsible growth." He wants to eliminate illiteracy within 40 months by providing school places for all four year olds.
He will oppose trade protectionism, including "developed nations' scandalous farm subsidies which are hurting our producers". He also targeted corruption, fraud and waste which "continue stealing resources that belong to the people". And on international affairs he promised to help construct a stable, prosperous and united South America, based on democratic and social justice ideals.
He will try to create a "mature" relationship with the US based on "reciprocal interest and mutual respect". And he concluded that the "democratisation of international relations. . . is as important to the future of humanity as the consolidation of democracy within each country".
Lula, candidate of the Brazilian Workers' Party (Partido dos Trabalhadores), won the October presidential election by a landslide. He gained 61 per cent of the vote against the 39 per cent secured by his main opponent Jose Serra, successor to the outgoing president, Fernando Henrique Cardoso. He thus becomes the first president from a radical socialist background to assume power in the world's fourth largest democracy.
Lula is a veteran trade union organiser, a former shoeshine boy, street vendor then metal worker from the poor north-east, with a lifetime of hardship and social struggle behind him. His party was forged in campaigns against the military dictatorship, and the poverty and inequality that have dogged its subsequent democratic development.
It has an impressive mass membership, drawing on trade unions, Catholic liberation movements, community activists and left-wing academia. Over the last ten years it has successfully governed many of Brazil's major cities, including Sao Paulo, Belém, Recife and Brasília.
In Porto Alegre and other cities it has been the main inspiration for the remarkable experiment in radical civic republicanism - the participatory local budget process drawing in ordinary people to set annual priorities, including large numbers of women, blacks and indigenous peoples who are normally completely excluded from politics.
There was panic in the financial markets last autumn when it became clear that Lula was going to win. Would he maintain his promises to advance the modernisation of Brazil achieved by Cardoso, by accelerating economic growth to fund social progress? Or would he revert to his previous policies of repudiating debt, renationalising privatised state assets, tackling social problems by racheting up expenditure, and reversing open trade and investment policies?
These questions remain in the background as Lula has assumed formal political power in the last two weeks. But his pledges since the election, reiterated in his inaugural speech, have gone a long way to allay the markets. The country's risk premium has halved since October and the currency has rebounded 16 per cent in the last month.
THERE is a clear commitment to open markets, and to funding development and social policies by sustainable economic stability. Lula has pledged support for a $30 billion IMF loan requiring his government to maintain Cardoso's strict fiscal and monetary policies.
A key feature of this neo-liberal "Washington Consensus" is the maintenance of a primary fiscal surplus whereby tax revenues exceed state expenditures, minus interest payments on debt. Lula is committed to a continuing surplus of 3.75 per cent. His finance minister said this week there will be a year of austerity to ensure these fiscal disciplines can be adhered to.
This cuts across popular demands for and expectation of radical social change. Lula's government has inherited a huge public debt, high inflation and sluggish growth from Cardoso. Overcoming those millstones will require a growth rate of at least 4 to 5 per cent if Brazil's debt burden is not to explode. Much of the new policy is designed to steer a way towards such conditions, by targeting corruption and waste in social expenditure and reforming tax and pension arrangements.
He faces two major constraints: the need to harness market confidence as already outlined; and the fact that his party does not have a majority in parliament. Lula received twice as many votes in the presidential elections as his party did in the legislative ones. This means he must make alliances with other parties; two-thirds majorities are needed to change certain key policies such as pensions.
These tensions between radical and mainstream policies are symbolised by Lula's decision to open the left-wing World Social Forum in Porto Alegre next week and then to go on to address the establishment World Economic Forum in Davos. Will he be able to ride the two perspectives over the next four years?
At last year's Porto Alegre forum two clear tendencies emerged among the major speakers and 80,000 participants. The dominant one opposes existing neo-liberal globalisation in the name of strengthened national sovereignties and state economic involvement as the best way to regulate it. The second opposes national solutions and seeks a democratic globalisation instead.
The Brazilian Workers' Party has long been associated with the first position, but now appears more wedded to the second one. Whether they can maintain that stance in the face of suspicious markets and uncertain international growth makes their party one of the most interesting in the world today. Governing Brazil's 180 million people becomes a fascinating experiment in the politics of globalisation.