Brazil’s Lula: "We Have to Grow Again"

Brazil's Lula: "We Have to Grow Again"

"I’m going to do what I promised. I only ask for comprehension.
It has to be understood that all cannot be done
at once…Things
may be difficult, but if you are willing, have the will, you can
do them. I did not fight to win this
election and then do nothing.
I intend to do everything I said I would do."



In a speech on Thursday at the Palácio do Planalto, President Luiz Inácio Lula da Silva boasted that he could recite
the names of all of his ministers and then proceeded to point them out. But because of where two of them were sitting, one
on the President’s left, the other on the right, Lula did not see them and did not name them. Later, when the fact was
brought to his attention, Lula joked that he was not a leftist or a rightist, because since becoming President of Brazil he had
become a centrist.

Brazil’s President is a former union leader who built up a reputation as an able negotiator. Last week he once again
showed that ability when he got a first vote approval of his social security reform bill in the Chamber of Deputies. This
weekend, Lula gave his first exclusive interview since taking office to a radio station: Radiobrás’ Rádio Nacional.

Lula began by saying that the favorable vote for the social security reform bill had been "extraordinary." But he
would not classify it as a miracle. "What miracle? It was just an exercise in democracy. We talked to the public, whether they
were in favor or against. We talked to everybody and we listened to the pros and cons," said the President.

Because of the reform bills in Congress (besides social security, there is a tax reform bill), Lula has been working
12-hour days. But he says he is used to long hours. He started working very long hours at the age of seven when he sold
peanuts and candy on the street in the port city of Santos. "I have always worked long hours. And I did not become President
by accident. I was not invented by admen. I fought to be President. I lost three elections and kept on fighting," he said.

Why did you begin your administration with the difficult tasks of social security and tax reforms? Why
begin with such hard things?

It is important for the people to know that this was a campaign promise. We said we would discuss the social
security and tax reforms with the public and then send them to congress in the second half of 2003. There is a certain
urgency about both reforms. The social security system is almost bankrupt, especially in the public sector. States have
serious problems with revenue and taxes suffocate the productive sector.

We discussed the [social security] reform with 27 state governors. That was the first time that ever happened, with
them participating in drawing up legislation. Next we took the proposal to the Economic and Social Development
Council where representatives of civil society—union and business leaders, landless workers, intellectuals, NGOs,
churches—worked on it. When they finished, we went back to the governors and got their approval. Then we sent the bill
to Congress on April 30—a full two months ahead of schedule.

I am pleased and the Brazilian people are satisfied that we have done something in seven months that has taken
other countries years to do. The last President of Brazil spent eight years trying to get a social security reform bill
through Congress. Was it a miracle? No, just the exercise of democracy. Talking to people, listening to opinions, listening to
the pros and cons. That was how we got a vote on social security reform.

I really think it was an enormous plus for the federal government and even more so for states where there are
serious budgetary problems. The result of the reform is that I can look my grandson in the eye and tell him that 30 or 40
years from now he will be able to retire because the government will have the money to pay for it.

Social security reform was an enormous benefit for the Brazilian people. Obviously, some people were against
it—that’s normal. But the truth is that for the first time in Brazilian history we have put a halt to distortions in the system.
Everybody remembers back in 1989, president Collor said he was going to stop that. But here we are in 2003 and we
still have retirees in Brazil getting R$ 53,000 (US$ 18,000) per month, or R$45,000 (US$ 15,000), or R$30,000
(US$ 10,000). As of now, the most anyone can get is equal to the salary of the Surpreme Court Justice, that is, R$17,000
(US $5,700).

Actually there was quite a bit of resistance to the social security reform. Do you think the public understands
the benefits of the bill now, or will they only know that in the medium- or long-term?

The resistance did not come from the public. All the public opinion polls showed that 70 percent approved of the
reform. Even among civil servants there was a majority in favor of reform, especially those who earn low salaries. And why
was that so? Because in our social security reform we protected people with low salaries. Retirees who get up to R$
1,200 (US$ 400) will not pay any taxes. Retirees who earn more than R$1,200 will pay taxes only on what exceeds that
level. We also unified the system ceiling at R$ 2,400 (US$ 800). This reform means we can guarantee that our children
and grandchildren will have rights under the social security system.

So, would you call the social security reform a success?

So far it has been an extraordinary success. Some specialists are saying that the final bill is better than the one we
initially sent to Congress. And now we will send the tax reform bill to Congress within the next 15 days. We want a vote on it
by the end of the year. What we need to do is begin 2004 thinking about other things. We have to focus more on land
reform. We have to make changes in Brazilian labor legislation and union structure. We must discuss renewed economic
growth because that is our main interest. Brazil has to grow again so we can create jobs, generate income and improve
income distribution.

What is the government going to do next?

First, let’s see what has been done. When we took office, every Brazilian knew that the economic situation was
difficult and that our credibility with foreign investors had to be recovered. Let’s not forget one thing: in December 2003,
inflation estimates for the next 12 months were running at 40 percent. Today we are looking at 7 percent. In December
2003, Brazil did not have a dollar to finance its exports. Today we have export financing. We have begun to reduce
interest rates. When we have recovered credibility, both abroad and domestically, we can then focus on specific sectors.

We made extremely important decisions on farm policy. For the first time we released R$ 5.4 billion (US$ 1.8 billion)
for family farming. We released money before the planting season. And, most important, we are giving money not only
to landowners, but to the people who work the land, their wives, their children. It is now possible to finance
different projects on the same piece of land. And at the same time the Banco do Brasil has eliminated the red tape. People can
go to the bank and just get their money.

The agrobusiness sector is doing very well in Brazil. We are going to do everything possible to increase production
and export more. Then we have to deal with other important issues such as microfinancing. The problem is that poor people
in this country want to buy something, a home appliance, and cannot. If they go to a credit union they pay 300 percent
in interest a year. At a bank, they pay 116 percent a year in interest. So we have set up microfinancing at the
Federal Mortgage and Savings Bank (Caixa Econômica Federal) and the Banco do Brasil where people can get a loan and pay
2 percent a month. That is something extraordinary for someone who never had a chance to get credit.

We are going to do what we promised we would do during the campaign. The only thing I ask for is comprehension.
It has to be understood that all this cannot be done at once. You do not do everything at once in a home, in a town,
and much less so in a complicated country like Brazil. Now one thing I learned from my mother, an illiterate lady, was
the right to hold my head up, look people in the eye and talk to the Brazilian people, brother to brother. Things may
be difficult, but if you are willing, have the will, you can do them. I did not fight to win this election and then do nothing.
I intend to do everything I said I would do.

The Brazilian people are proud to have someone like you, a person from the lower classes, from the Northeast,
in the presidency. What changed in your life after taking office?

My responsibilities increased. I am working more now than when I was doing two hours overtime every day so I
could pay my bills.

What is your day like? Now you live in Brasília. What do you think of the city? Are you doing any exercises?

First, I do not see very much of Brasília. I see the road from the Alvorada to the Palácio do Planalto. It takes
eight minutes by car. I am up every day, including Sunday, at 6:00 am. My wife, Marisa, and I walk an hour.
Sometimes Minister of Finance, Antonio Palocci, joins us for the walk. Then I work out a little. By 9:00 am I am at my office at
the Palácio do Planalto. Some days I am there until 9:00 pm. On those days I am a wreck by the time I get to bed. Next day,
it all begins again. As you can see, I really don’t see Brasília. Just the trip to work.

A former president of Brazil said this is an easy country to govern. Do you agree?

It is not difficult. But, there are a lot of problems. And if they didn’t exist, I wouldn’t have anything to do. The fact is
that I was elected to do a lot of things, resolve a lot of problems. People believe in my party and my allies. They believe
we can resolve the country’s problems. I did not become president by accident. I fought through four presidential
elections before I finally won one. I lost three times and did not give up. I want to show people of this country that it is possible
to improve their lives. People in Brazil can have three square meals a day. They can also have decent housing.

It is also possible to have a peaceful land reform in Brazil. No one is going to force land reform in Brazil. The
government will do it, within its possibilities. It cannot take place the old way—tossing the landless into the brush and
leaving them at the mercy of God. We have to give them land, infrastructure, roads, financing, so they can produce and build
a farming community with schools, a doctor, a place for children to play. We want a civilized, humanitarian land reform.

We have to think about doing things differently in Brazil. We are committed to that idea and we will do it. We know
what must be done; that is a source of calm and optimism. From my point of view, there is no such thing as stormy weather.
I have never had an easy time in my life. We will resolve Brazil’s problems with persistence, patience and always
telling the people the truth. When we can do something, we have to say so. And when we are unable to do something, we have
to say so. People have to understand. I want people to know that I want to be honest with them, the same way I am
honest with my own children.

Brasília, August 18, 2003.


This interview was distributed by Agência Brasil (AB), the official press agency of the Brazilian
government. Comments are welcome at

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