MercoPress. South Atlantic News Agency

Brazil: Interview to Lula da Silva

Brazilian president Luis Inacio Lula da Silva said this Sunday that “we haven't advanced as fast as I'd liked to, but for the first time we have sustainable economic growth with reasonable economic stability”.

In an interview with Spanish newspaper El Pais and talking about his 17 months in office Mr. Lula da Silva added that you can't repair "in four years the mistakes of 500 years in Brazil", although he was optimistic things would begin "to improve and considerably".

The Brazilian president admitted that on taking office his greatest disappointment was "the totally de-structured government machinery" as well as a financial situation far worse than expected.

"I'm convinced of the expectations we created in the Brazilian society and our historic commitment with the poor", but at the same time, "I'm aware of the reality we encountered on taking office".

Insisting on the financial situation of Brazil, the founder of the largest Workers Party in Latinamerica and former union leader said that "we took the decision of honouring commitments", although "surplus is not enough to pay the huge interest on loans".

Mr. Lula da Silva revealed that 70% of Brazilian bondholders are small Brazilian investors and "if I didn't commit my administration to honour payment of those interests, it wouldn't stimulate foreigners or Brazilians to invest in our country", which would undoubtedly harm growth and the economy.

Regarding his much publicized "Zero Hunger" campaign, Mr. Lula da Silva reiterated his commitment with three hot meals per day for the Brazilian poor, but "it's an emergency policy and we want to create conditions for the economy to expand and help create jobs".

As to his loss of popular standing (over twenty points) and if electoral expectations had been fulfilled, the former union leader replied, "if when I go to sleep I'm at peace with my conscience because I feel I'm doing what I should, then I consider myself satisfied".

However Mr. Lula da Silva stressed that one of the major mistakes of previous administrations, including from 1930 to 1980, when Brazil did not cease to grow year after year, was not to think the country "30 years ahead; we only think about Brazil at election time. This way there's no consistent long term policy".

"We have to think about Brazil in 15, 20 years time, creating strong foundations for future administrations", he emphasized.

Regarding foreign policy in the region, he said he favoured closer links between countries and greater trust between rulers and citizens. Either "we achieve agreements, or we'll never be developed countries".

With the US and the EU, "I want a peace and love relation, but defending my country's interests, the same interests they defend. I'm not satisfied with being poor".

The interview follows IMF's strong support and confidence in the Brazilian economy which is estimated to expand 3,5% this year.

"Our point of view about the Brazilian program has been quiet clear as far as its very strong performance under this program", said IMF spokesperson Thomas Dawson.

Brazil since 2002 has a 40 billion US dollars stand-by agreement with the IMF, which Brazilian authorities have anticipated will be discontinued when it expires next March 2005. IMF is currently monitoring the seventh review of the agreement and has repeatedly praised the Lula da Silva administration for its strict fiscal accomplishments.

"Economic recovery continues and we can estimate growth will reach 3,5%", indicated Mr. Dawson.

However the government suffered a significant defeat last week when the Senate decided to increase the minimum wage to 275 reales, above the 260 proposed by the Executive. Lula da Silva's administration is concerned because civil service pensions are linked to the minimum national wage, and any minor increase could hinder budget surplus targets.