MercoPress. South Atlantic News Agency

Brazilian president promises “Tropical New Deal” .

Brazilian president Luiz Inacio Lula da Silva admitted his dissatisfaction with the poor results of the economy and had given a 15 days “ultimatum” to his economic team and advisors.

So it was revealed by leaders of the Partido Movimiento Democratico de Brazil, PMDB, Lula administration main ally that ensures the ruling coalition a majority in Congress.

Apparently President Lula and PMDB leaders shared a private dinner last week to assess the Brazilian economy's results and the president admitted he was also concerned with the performance of the economy, "I'm dissatisfied".

Last year following strong austerity measures, the Brazilian economy contracted 0,2%, workers purchasing power dropped 12,5% and unemployment reached an all time record of 13%. Actually the domestic contraction was far worse since in 2003 Brazil managed record exports and trade surplus, complying comfortably with the macro economic objectives agreed with the International Monetary Fund.

However the domestic recession has eroded his administration's standing and Mr. Lula's popularity.

During the meeting with PMDB leaders including the president of the Congress and former president Jose Sarney, Mr. Lula revealed he had strong exchanges with some of his ministers demanding "results and better monitoring of programs".

President Lula da Silva anticipated to his alliance partners that next May 1 he will be presenting a package of initiatives, funded by government, to stimulate employment "similar to Franklin Roosevelt's New Deal between 1933 and 1939".

The "Tropical New Deal", as was described by the Sao Paulo press will attempt increasing the number of Armed Forces conscripts to 100,000 with the purpose of teaching them a trade during the twelve months in service preparing them for their return to civilian life.

Another project is contracting unskilled labour for the upkeep and recovery of the federal highways system and a program to stimulate employment in the tourism industry.

Mr. Lula added that he will attempt to simplify the current taxing system, besides favouring small and medium enterprises.

But the Brazilian president was not enthusiastic about raising the minimum wage (80 US dollars per month) as suggested by PMDB leaders, since "this would endanger budget stability".

Further more the coalition partners recalled that last year the Brazilian Army was forced to cut the number of conscripts and shorten their time in service because of a serious lack of funds.