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Brazzil - Economy - March 2004

Brazil Breaks with IMF

Brazilian President Luiz Inácio Lula da Silva, despite a low
economic growth and high unemployment in Brazil is very
optimistic about the future. He said to be confident that Brazil
is going to grow this year and the next. "The worst is behind
us," he said. "We will not sign a new agreement with the IMF."

Émerson Luiz

Brazil and the International Monetary Fund are getting a divorce, but that should be an amicable separation. According to Brazilian President Luiz Inácio Lula da Silva, the country will leave the Fund "without screaming and without fuss," just by not renewing the agreement Brazil has now with the IMF.

Lula mentioned several projects that have been undertaken by his government including the construction of 40,000 houses that should replace stilt houses across the nation. He said he is confident that Brazil is going to grow this year and grow even more in 2005. And added: "The worst is behind us. So much so that Brazil will not sign a new agreement with the IMF."

Lula's announcement occurred during an interview with TV Globo's prime-time news show Jornal Nacional. It was the first time the President gave an interview to the media since his administration was shaken late last month with the revelation that government aide Waldomiro Diniz had solicited bribes from Rio bookmaker Carlinhos Cachoeira.

The President said that his government main concern is the unemployment and grumbled that jobs are the last thing to show up when there is a recovery in the economy. He asked the Brazilian population to be a little more patient: "You need to calm down," he told his fellow citizens.

"This is like a housewife preparing the Christmas dinner. Since the food is taking longer than expected the kids start to complain. What should she do? Get nervous, leave the kitchen and let the turkey burn in the oven? No, she has to do her best to prepare the Christmas dinner. Later, at the table, everyone will praise her."

He never felt better in life, said Lula, when asked about his health. He also revealed that he is having 45-minute daily treadmill sessions and that his arterial pressure is excellent: 11 by 7. The President admitted that he continues to smoke cigarillo and as every other contrite smoker promised he will soon break the addiction.

While the portrait of Brazil painted by Lula and his aides has the colorful tones of spring, the opposition in the country is getting somberer and somberer. Leaders of the parties opposing the current administration released a document in which they argue that Brazil is going through a crisis that might become a threat to democracy.

The Waldogate episode mentioned above seems to have worked as a catalyst for the opposition parties, which include the PSDB (the party from former President Fernando Henrique Cardoso), the PFL, the PDT, and even some members of the PMDB, which has strong links to the current administration. Those parties plus the leadership of Força Sindical—the second largest Workers' Federation in the country—got together in Brasília March 25, to launch the Permanent Forum of Opposition Parties.

According to Jorge Bornhausen, president of the conservative PFL (Partido da Frente Liberal—Liberal Front Party), Brazil is facing a problem of authority. The senator from the state of Santa Catarina singled out the President as the main culprit: "If you can give the crisis a name, it is called Lula," he said. "What we want is that the President rule, exercise his power, participate, act and not delegate everything."

His remarks were met with thunderous applause. If he could grade the government, he added, he would give the Lula administration a -0.2, in a reference to the percentage of the decline of the Brazilian GDP in 2003.

The united opposition front promises to become a "permanent forum of consultation and planning in order to adopt effective measures to fight corruption and ensure jobs."

In a document presented in the PFL website — www.pfl.org.br — the group maintains that Brazil didn't have it that good in years: "Our exports are growing, there is room for advancement in the multilateral negotiations. If with all that our economy is contracting this has to do with a government that is apathetic, confused, without leadership and imagination or projects, which is letting escape the opportunities for regaining our growth."

The government seems worried with a soon-to-be-released poll measuring the popularity of the Lula administration. Chief of Staff, José Dirceu, in a meeting with members of the governing coalition, suggested that Lula's appeal may be waning among the "opinion makers" although he is still popular among the masses, called classes C, D, and E by pollsters.

In an interview with CBN radio, poll expert Antônio Lavareda, pointed out that Lula might lose as much as 10 points in the next round of public opinion survey. The next survey, the highly-respected CNT-Sensus poll, should be released on Monday.

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