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Lula Leaving a Legacy of Debts and Unfinished Work to His Successor

Dilma Rousseff with Lula Brazilian president Luiz Inácio Lula da Silva’s successor next January will receive a budget highly committed to infrastructure and with limited margin for economic decision-making according to reports in the Brazilian national press.

On January 1st, Lula will hand the presidential sash to the winner of next October’s election, a race which according to the public opinion polls has been cut to two main candidates: governor of São Paulo José Serra, representing the opposition party Brazilian Social Democrats, PSDB, and cabinet chief Dilma Rousseff, the incumbent hopeful in representation of the ruling Workers Party.

According to Rio’s daily O Globo, there are US$ 19.5 billion in contracts for infrastructure works signed between 2007 and 2010 but which have to be paid by whoever replaces Lula.

O Globo also estimates that the Lula administration has a backlog of US$ 14 billion in works not leased or under construction.

This means that the Brazilian government has only paid for 55.2% of the works contracted from 2007 to 2009, and which were included in the infrastructure program promised by Lula for his second mandate.

The newspaper is optimistic to a point about the evolution of works this electoral year: it estimates 65% of contracts will be finished which is above average.

“Even in the hypothesis that the government accelerates the execution of works this year, above the average of previous years – which is unlikely – the available revenue in the 2010 budget will not be sufficient to address the expenses of later years, which will be pending,” added O Globo.

In support of the incumbent candidate Rousseff the Lula administration is expected to announce at the end of March a program of public works that should be executed between 2011 and 2015, as a further stage of the infrastructure plan, but the bills will have to be paid by the next cabinet, be it of whatever color.

The plan includes works in major infrastructure, sewage and drinking water, transport and energy and pharaonic undertakings such as the Belo Monte hydroelectric dam, the third largest in the world with an initial budget of US$ 10.6 billion.

In the transport system, more specifically railways, there is a plan to build a super fast train linking Rio to São Paulo. The bill: US$ 18.4 billion

Mercopress

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