MercoPress. South Atlantic News Agency

The day after

With opinion polls indicating that Luiz Inacio Lula da Silva Hill and his Workers Party will be victorious in the first round of this Sunday's Brazilian crucial presidential election eyes are now set on the day after.

But Mr. Lula has become quiet a different character from the radical union leader who started in politics in the late seventies organizing strikes against the military regime and now is in his fourth bid to the presidency of Latinamerica's main economy and the country with one of the most unfair wealth distribution systems.

With a strong ample support Mr. Lula according to the polls, more than doubles his runner up, Mr. José Serra, handpicked by president Fernando Cardoso and the darling candidate of the markets that have been particularly volatile fearing the victory of a "Socialist" and growing difficulties for Brazil to honour its 260 billion US dollars standing public debt.

However Mr. Lula not only chose as vice-president a distinguished industrialist José Alencar, and committed himself publicly to the current open market economic policy, but also promised fiscal discipline and a stringent budget.

Besides since Brazil is a federal state, governors are very influential and he will have to build a working majority in Congress. Polls indicate that the Workers Party will possibly become the strongest single Congressional group, but far from the needed majority, and there's not much else to the left, rather the contrary.

Mr. Lula has promised his followers the creation of millions of new jobs, (the main concern of the Brazilian electorate) but has also told the business community that the coming 2003 budget will possibly have a more ambitious target than the anticipated 3,5% primary surplus, and exports industries, with strong government incentives, are to become the main thrust of his economic policies.

And in the political field not only did Mr. Lula have kind words for some of the General-presidents during the military regime but has graciously accepted support from notorious Conservative former presidents such as Jose Sarney and Itamar Franco.

But the big question is how Mr. Lula, once seated in the Planalto, will reconcile the social expectations of a first round victory with fiscal discipline, a tight budget, and further more convince foreign investors and Brazilian bond holders that their fears should not become a self fulfilling prophecy.

Under Mr. Cardoso's eight years, Brazil managed to stabilize the economy and attract massive foreign investment but since 1998 the economy has grown insufficiently even to keep up with population growth.

This situation and the growing unemployment in industrial areas such as Sao Paulo significantly eroded the ruling coalition's support and convinced much of the urban middle class to join the alternative candidate, Mr. Lula.

The US State Department also anticipated they are certain of a positive working relation with Brazil's next administration, even when it's known Mr. Lula is not convinced of the US sponsored Free Trade Association of the Americas which he considers a form of submission.

However the finesse of the Brazilian political system, similar to Italy's, and its acceptance of a scenario with Mr. Lula president instead of the eternal opposition rival, might be indicating that after all the former radical union leader has definitively joined the club.