[OUTLOOK]Lessons from Brazil’s leaders

There are many similarities between Korea’s President Roh Moo-hyun and Brazilian President Luiz Inacio Lula da Silva. Since I’d seen much of our own president, I decided to go to Brazil to see what kind of a president Mr. Lula was.
What I was particularly curious about was how a man who made his name as the leader of a radical labor union would swerve so completely to the right in his policies after he became president. How did his aides and the labor forces that supported him react to this? How do the businesses and the international financial institutes that eyed him warily at first and the public in general view this change?
President Lula, too, was having a rough time. The economy recorded a negative growth rate in the first year of his term. The Lula administration is feeling the aftereffects of attempting to live up to certain rash campaign promises such as the “poverty zero” campaign and the redistribution of farmland.
Having implemented newly announced reforms such as drastic cuts in national pension benefits, President Lula has lost much of his support from the leftist parties and organizations that formerly supported him. The high interest rates to stabilize prices have made the businesses also unhappy.
Despite its troubles, the Lula administration is faring surprisingly well. President Lula’s Workers’ Party is one in a batch of small parties with less than 20 percent of the seats in the Brazilian congress. It has currently formed a coalition with nine other parties, a far weaker position in comparison to Roh Moo-hyun’s Uri Party. In addition, the Brazilian government is a federal government with a weak grip on the local governments. Yet President Lula’s popularity among the Brazilian public is still going strong.
President Lula is also a fascinating character. Despite several obstacles in his political life, he has always managed to pacify and persuade his political enemies with a mysterious charisma while passing policies that his allies and supporters would have opposed firmly.
I’d read about President Roh’s hardships in his childhood and youth with great admiration for the man, but President Lula’s story is even more touching. As a child, President Lula was so poor that he used to wait for his friend to finish chewing his gum and spit it out so that he could pick it up and chew it. Picking cigarette butts from the ashtrays for a smoke was nothing to this man.
He grew up in poverty and could only attend elementary school. He lost a finger in an industrial accident and worked as a labor union leader, leading walkouts at the docks he worked in. President Lula could have grown up into a very bitter man with very real grudges in his heart.
This was what worried the capitalists of the advanced Western countries when Mr. Lula won the presidential election. If such a man became the president of Brazil, the country’s economy, which was already bruised with populist policies, would go further down the drain, and vengeance would be taken out on the rich and the established.
However, President Lula completely defied these predictions. He accepted and continued with the basic framework of the policies of his predecessors that he had earlier criticized. Further on, he implemented strict reforms, such as overhauling the pension system, that have upset many of his supporters.
To the criticism that he was a traitor who betrayed the trust of his supporters, President Lula replied, “How could the mind of an unmarried bachelor and the mind of a married man with a family to support be the same?”
Mr. Lula is not the only one who has changed. Finance Minister Antonio Palocci, who had been the campaign manager for Mr. Lula in the presidential election, was a well-known hard-core leftist before. Now, as the finance minister, he seems to have forgotten his past and is busy catering to the United States’ Wall Street.
The other economic chief of the country, Central Bank President Henrique Meirelles, was once the president of FleetBoston Financial. He was elected to the lower house as an opposition party member before the president invited him to take charge of the country’s money line.
How can we compare this Brazil and this Mr. Lula to our country and our president? While Korea is left of center, the Lula administration is moving to the right of center in face of resistance and criticism from some of its former supporters. When asked whether the retrenchment policy could become a political liability for the president, both the financial minister and the central bank president were adamant that this is the only way for the Brazilian economy to survive.
It is amazing how such a finance minister and central bank president could last so long into the administration’s term. If it had been the Roh Moo-hyun administration, they would have never been appointed in the first place, and had they been appointed, they would have been sacked years ago.

*The writer is the chief economic correspondent of the JoongAng Ilbo.

by Lee Chang-kyu