The election of Lula in Brazil will make a profound difference to much of Latin America, writes Hisham El-Naggar from Buenos Aires Click to view caption It has happened. The Brazilian electorate voted for a "leftist" president, for the first time ever, on 27 October. Luiz Inacio da Silva (known as "Lula") is of modest origin; his parents were illiterate, he was active in the union movement, and guess what? No PhD. Lula's "lack of preparation" has been repeatedly used by the conservative elite to suggest that he was unfit for rule. This argument might have carried more weight if his highly educated predecessors had done a better job of ruling Brazil. The fact is, Brazil -- and much of Latin America besides -- appears to be fed up with neo-liberal policies which have worsened social conditions and widened the gap between the rich and poor. The outgoing president, Fernando Henrique Cardoso, deserves credit for taming the country's inflation, which fluctuated between high and positively stratospheric levels. Alas, the impact on the economy was not what economists had been insistent it would be. Average income is now about 10 per cent lower than in 1994, when Cardoso became president. Poverty refuses to recede; the pockets of prosperity which stability engendered are inhabited by yuppies who shudder at the thought of the crime-infested slums which lie beside their affluent enclaves. Brazil has the reputation of being a giant economy, which in hard times, somehow manages to grow anyway. Certainly the enormous population -- 177 million strong -- makes for an economic dynamism few of Brazil's neighbours can match. Here protectionist policies do not mean holding a Lilliputian economy captive. As it turns out, though, Brazil has not done a bad job of exporting industrial products. But the difficulty of competing with world class rivals has meant that the local industrial lobby is inclined to think of markets closer to home. Neighbouring countries -- especially Argentina, Paraguay and Uruguay, who together with Brazil constitute Mercosur -- seem more promising and, furthermore, provide strategic depth in international trade negotiations. There is another far from insignificant problem. Brazil has borrowed heavily to finance its industrial growth and a sizeable, if not very efficient, public sector. The debt burden is so crippling that many observers think far-reaching debt renegotiation is inevitable. This is the Brazil Lula has inherited. Add to that the wild hopes for change which put him in the Planalto -- Brazil's equivalent of the White House -- and the extent of the pressure, to which he is certain to be subject, becomes quite clear. Lula does, however, have a few things in his favour. After speculating against him with a ferocity rarely seen in a speculation-prone region, international financial markets seem to have come to the conclusion that they have no choice but to deal with him. The local establishment, for one, softened its opposition to him, and some industrialists have nothing but praise for his nationalist stance. However, will Lula join Fidel Castro and Hugo Chavez as a revolutionary leader, given to anti-American rhetoric and none too market-friendly policies? Not likely, as he himself has made clear, he is above all a pragmatist. After running three times for the presidency, falling short because he was considered too radical, Lula opted for a tactical alliance with a segment of the business world -- the Brazilian business world, to be precise. His hand-picked vice president is a right-of-centre businessman. He has already indicated that his economic team will not come predominantly from his Labour Party. Are we talking Tony Blair then? Not quite. Lula is likely to make a clean break with his predecessors in at least two areas. Notwithstanding promises of fiscal austerity -- extracted by the International Monetary Fund (IMF) from all candidates in the middle of a financial near-meltdown -- Lula is certain to give top priority to social programmes, especially in the areas of education, health and assistance to the needy. Second, in all matters relating to trade, financial debt or indeed political negotiations, his policy will be less beholden to globalisation and more consistent with a "Brazil first" attitude. This may make a considerable difference to the rest of Latin America. Lula has made clear that his first foreign visit will be to Argentina, and he is adamant about the need to help Brazil's neighbour overcome its crisis. There is more to this than good samaritanism. Lula is inclined to strengthen ties to his southern neighbour in order to stand up to the giant of the North. It is no secret that the United States will subject him to immense pressure to join the Free Trade Area for the Americas as soon as possible. With Argentina, and the rest of the Mercosur, as an ally, he ought to be able to negotiate more deftly with an administration not known for its subtlety. That will be the challenge Lula will have to face in the coming months. He must uphold his country's interests and lay claim to a vigorous regional leadership role without antagonising the United States. Chavez has done this with very little to show for it. He must also pursue his social programme without surrendering to the bureaucratic clientelism model so rife in Latin America. For the moment, though, the focus is not on the tough struggle ahead but on the sheer joy of having succeeded in overcoming the fear fostered relentlessly by his detractors. All over Brazil, crowds are doing the samba in the streets in honour of the candidate who, after many tries, has changed the course of history. So, come to think of it, have they.
