Lula sworn in as Brazil president amid tight security, as Bolsonaro skips ceremony

Luiz Inácio Lula da Silva was sworn in as president of Brazil for a historic third term on Sunday, with security measures tightened after an alleged bomb plot by a supporter of outgoing leader Jair Bolsonaro.

Hundreds of thousands of people descended on Brasília for the leftwing leader’s inauguration, which featured a mix of political pomp and pageantry alongside a festival-style celebration with live music.

Following the most tightly fought election since democracy was restored to the South American nation in 1985, Lula delivered a speech focusing on unity, in which he promised not to carry any “spirit of revenge” against those who “tried to subjugate the nation to their personal and ideological designs”.

He said democracy was the big winner in October’s election and promised measures to halt deforestation in the Amazon and to repeal decrees by Mr Bolsonaro that loosened gun laws.

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Clad in the red of Lula’s Workers’ Party, with many bearing flags and images of his face, attendees began assembling in the central esplanade of the capital city in the morning.

Nilton Calez, a public sector worker in his 60s, had left his home in São Paulo state at 8am to travel by bus with friends.

“It’s a big victory for us – it’s what we’ve all been waiting for. Bolsonaro ruined this country. He’ll never win again,” he said, against blaring car horns. “Lula has already shown himself to be a good president. He helped the poor. Bolsonaro did nothing”.

The convivial atmosphere contrasted sharply with the mood among Bolsonaro supporters, hundreds of whom have camped for months outside military bases across the country, calling for the armed forces to annul the results of the elections in October.

On Friday evening, the defeated rightwing populist quietly left Brazil for Florida in order to avoid the event.

Mr Bolsonaro’s exit disappointed his more radical followers, who hoped he would contest the outcome of the ballot, which they claim without evidence was rigged. It also meant he shunned the tradition of handing over the presidential sash to his successor.

The former metalworker’s return to the presidency, just three years after he was released from prison, capped a remarkable political comeback. Lula, as he is universally known, ruled Brazil for two terms between 2003 and 2010.

But the 77-year-old former metalworker faces a host of difficulties as he seeks to honour campaign pledges that include ending hunger and destruction of the Amazon rainforest.

Alongside fiscal pressures and a weakened outlook for the region’s largest economy, the icon of the Latin American left must deal with a deeply divided nation.

“Economically and socially the challenges are greater now than in 2003,” said Graziella Testa, a political scientist at the Getúlio Vargas Foundation. “The first is how will the government respond to extremist groups who are openly anti-democratic and do not accept the result of the elections.”

Lula gained 50.9 per cent of the vote to beat the incumbent, a far-right populist once dubbed the “Trump of the Tropics”, in a second-round run-off.

A former army captain, Mr Bolsonaro promoted conservative values, gun ownership and a liberal economic agenda, while denying the gravity of Covid-19 and gutting environmental protection.

Tensions mounted after the arrest on Christmas Eve of a 54-year-old man, who had travelled to the capital to join demonstrations, in connection with an explosive device found in a fuel tanker near the city’s airport. The suspect told police that the aim was to “sow chaos” and provoke a state of emergency.

The incident followed disorder in Brasília a few weeks ago, when rioters torched vehicles and clashed with law enforcement after attempting to storm a police building. Several arrests took place over the past week.

Lula’s first two terms in office coincided with a period of strong economic growth, falling poverty and Brazil’s rise on the international stage.

However, it was a legacy tainted by corruption controversies and economic mismanagement under his handpicked successor, Dilma Rousseff. Many Brazilians distrust the longtime trade unionist owing to the chequered record of his Workers’ Party, or PT.

Its 13 years in power culminated with a huge political bribery scandal, the worst recession in Brazil’s history and the 2016 impeachment of Ms Rousseff.

Lula himself spent 580 days in jail after being found guilty of graft. But the convictions were annulled in 2021 by the supreme court – paving the way for his candidacy.

Whereas the country benefited from a commodities boom during Lula’s first tenure, the global economic picture is now less favourable. Expansion in Brazil’s gross domestic product is forecast to slow from 3 per cent in 2022, to less than 1 per cent in 2023.

Investors are worried that Lula’s promises of increased welfare and infrastructure expenditure will further strain the public finances and lead to tax increases, with extra inflationary pressures forcing the central bank to keep interest rates in the double digits for longer.

“The tight fiscal space will be the main challenge for the president-elect. It will not be possible to rely on the external scenario to provide revenue for an expansion in spending,” said Wagner Parente, chief executive of BMJ Consulting. – Copyright The Financial Times Limited 2023/Additional reporting: Reuters