The victory of Lula in Brazil's presidential elections could begin a new chapter in that country's history. Hisham El-Naggar reports from Buenos Aires As polls closed on Monday night in Brazil, front runner Luiz Inacio da Lula captured 46.4 per cent of the vote, nearly double the votes claimed by his closest challenger previous front-runner, José Serra. However, the fact that Lula fell short of the mandatory 50 per cent victory mark will give Serra cause for hope in the second round of elections scheduled for 26 October. Unfortunately, a second round of elections will force Brazil to face another three weeks of costly and destabilising campaigning. At a time when much of Latin America is the throes of economic crisis, the prospects for a prolonged election are hardly cause for celebration. Especially since it would take a miracle for Serra to stop Lula from becoming Brazil's next president. It is remarkable that Lula has advanced so far and that he has an excellent chance of finally winning the office he campaigned for three times in the past. In a world where markets have zero tolerance for candidates who do not toe the line on absolutely everything; in a region whose growth prospects are hanging by a thread and a country with virtually no leftist tradition -- it is no minor feat for a union leader with a militant socialist past to come so close to winning the presidential prize. Not that the market has reason to fear that Lula is another Fidel Castro or even Hugo Chavez. Lula has learnt the lesson of his three previous defeats; he has come to understand that running aggressively against a solidly conservative establishment is fraught with risks. Hence the gradual transformation of Lula into a more centrist leader whose ideological convictions coexist with a commitment to Brazil's economic stability and prospects for growth. Not a minor consideration, since both are under attack at present. Brazil's currency has fallen nearly 60 per cent against the dollar since 2001. The economy, long accustomed to sturdy growth, seems mired in stagnation. And many suspect that Brazil, too, could default on its debt. So great is the fear of the average Brazilian that the economic collapse in neighbouring Argentina will spread to his country, that José Serra, President Henrique Cardoso's hand-picked candidate, played up the issue for all it was worth. He reminded voters that the victory of a supposedly "leftist" coalition in Argentina preceded that country's progressive implosion. Never mind that coalition's president, Fernando de la Rua, systematically applied policies which, far from being leftist, were more or less dictated by the International Monetary Fund (IMF). Serra's vigorous campaigning, backed up by the state's powerful propaganda apparatus, failed to propel him anywhere near Lula's dizzying heights in voter preferences. Slowly, a major part of Brazil's establishment came to realise that Lula was unstoppable, and that they might as well give him the benefit of the doubt, if not support him outright. Under strong IMF pressure, Lula joined other candidates a few weeks ago in pledging his support for a programme based on strong fiscal discipline. The message from Sao Paulo's powerful economic and financial lobby appears to be: "Prove it". In more than one respect, Lula will be inheriting a country which is at a short distance from a precipice. It will take all his skills to avoid disaster, after all, the powers-that- be know that if capital flight continues to grip the economy the country will be brought to a standstill. Much is at stake not only in the result of the presidential race. Most analysts, regardless of ideology, think Lula will win no matter what. Brazil is Latin America's largest economy, a country with a strong sense of destiny and regional influence. It is also the country which the US would most like to draw into the Free Trade Area for the Americas (FTAA), a project Lula is known to be reticent about. Many expect Lula to work on an alternative project: a free trade area for Latin American states which would not include the US. The initial focus would be the ailing Mercosur, which already includes Brazil, Argentina, Uruguay and Paraguay. Argentina's economic difficulties make the task easier rather than more difficult; there is a strong sense in that country that the United States has let it down and that a strong alliance with Brazil is the best strategic option. If a Lula-led Brazil can stand up to the world's only superpower in matters economic, might that not cast Brazil in the role of a serious rival to the US in the region as a whole? Brazil's pride, actually more overpowering than Argentina's, has also been hurt by insulting innuendoes being flung by the undiplomatic Paul O'Neill, US treasury secretary. Even under the much more market-minded Henrique Cardoso, Brazil was reticent about US policies in Colombia and Venezuela. What, then, can be expected under a not-altogether-sanitised red president? In fact, it is likely that Lula will be far more circumspect in his management of Brazil's fragile economy than in his handling of his country's relations with the American giant. The reason is simple: resisting US hegemony is one policy measure which would have near-universal support among Brazil's population. Nor would it pass unnoticed in other Latin American countries. Perhaps, as a symbol of a world vision that is not altogether unlike the Washington-produced variety that Lula has the most impact on the region. That he is a democrat and has a good chance of getting along with a nationalist-minded local establishment makes him potentially even more formidable than Castro or Chavez.
