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Lula – Brazil’s Olympic Champion

Lula and the babyPresident Luiz Inácio Lula da Silva is becoming an international superstar. He turned up in Copenhagen on October 2 and oversaw Rio de Janeiro’s victory in hosting the 2016 Olympic Games. To mark the occasion, he pulled out a huge handkerchief and blubbered like a baby, something it is impossible to imagine any other world leader doing.

Even Barack Obama, who also made the trip to Copenhagen for the occasion, was unable to outshine Lula whom he once famously described as “my man.”

Lula has become a familiar face at practically every major international and regional summit. He is almost an official representative of the developing world even though China and India are far more populous and influential than Brazil. The G20 now seems to have installed itself as a replacement for the G7 and the International Monetary Fund and World Bank are to be reformed to take account of the new world order.

Brazil is even about to lend the IMF US$ 10 billion, something unimaginable a few years ago. Lula now has his eyes fixed on getting Brazil a permanent place on the UN Security Council.

He has also just been honored with two prestigious awards – the Woodrow Wilson prize in New York and the Chatham House prize in London. Even the embarrassing setback to Brazil’s international image – the fiasco in Honduras where the ousted president Manuel Zelaya is holed up in the Brazilian embassy – seems to be resolving itself. How has this happened?

One of the main reasons for the rise of Brazil is the fact that Lula is now a veteran among democratically-elected leaders and has been in the international limelight for almost a decade. He is a man who is quick (perhaps too quick) to make friends and slow to make enemies. There are no countries in the world with which Brazil has bad relations despite the calls by many commentators in the domestic media for him to get tough with “troublesome” neighbors like Venezuela, Bolivia, Paraguay and Argentina.

Another reason for his popularity is that he is not a threatening figure like some other leaders of developing countries. Brazil has historically not thrown its weight around. Lula has managed to be friends with the US and European countries and kept up links with African, Asian and Middle Eastern states (although he has still not visited Israel).

He has cuddled up to dictatorships in Cuba, Iran, Libya, Sudan, China and other places but, as he said during his recent visit to the United Nations in New York, he is not obliged to shun Iran’s president, Mahmoud Ahmadinejad, because some other states do.

Unlike the leaders of the other BRICs who are rather anonymous, with the exception of Russia’s Vladimir Putin, Lula is a larger-than-life character. His lack of English and finesse does not seem to have prevented him building up good contacts. He is also constantly on the road – domestically and internationally – and has made more of an impact than his sophisticated, multi-lingual predecessor, Fernando Henrique Cardoso.

However, the main reason for Lula’s recent success has been the international financial crisis. The fact that the so-called developed countries crashed into recession and had to have their financial and (in some cases) manufacturing systems bailed out by their governments ended the idea that their business-friendly economic model was the best available.

Lula has never trusted the free market and used the crisis as an excuse to boost state involvement in Brazil. This was done not only in the banking system but also in the industrial sector through tightening state control over Petrobras, putting pressure on Banco do Brasil and Vale and giving tax breaks to sectors like construction, white-line goods and automobiles.

Brazil was fortunate in having not only domestic advantages such as a solid banking system, little household debt and controlled inflation but also huge foreign currency reserves and a healthy trade balance, funded not by the developed countries but by China, the world’s new economic superpower.

The result was that the crisis had little impact on Brazil which was one of the first economies to emerge. Of course things are a lot more complicated than this – and economists are forecasting fiscal problems ahead and most analysts believe that interest rates will start rising again next year – but at the end of the day Lula has emerged as a victor.

To say that Brazil won the Olympics because of Lula would be overstating the case. The Rio organizers did a splendid job of marketing the city and even managed to overcome fears that the Games could be affected by violence or lack of infrastructure. However, Lula pushed the issue as a political matter and forced the developed world to accept that there was no good reason why a developing country could not take on this task.

One of the principal reasons why Lula wanted the Games in Brazil was because he knows they will give the economy a massive boost.

Credit Suisse analysts in São Paulo say they could bring a long-term impact of as much as 90 billion Brazilian reais (around US$ 50 billion) into the Brazilian economy.

In a report entitled “Who will get to the podium in Rio 2016?” they said that, although the organizing committee had estimated investments of around 30 billion reais in the coming seven years, a preliminary exercise by the Sports Ministry raised this amount to as much as 90 billion reais.

When the Olympic torch is lit in Rio in seven years time there is a fair chance that Lula will be watching the ceremony not as a sport fan but as the re-elected President. He is not allowed to stand in next year’s election but could pop back again in 2014 just in time to oversee the final touches to the Games which he helped bring to Brazil.

John Fitzpatrick is a Scotsman who first visited Brazil more than 20 years ago and has been based in São Paulo since 1995. He is a journalist by profession and runs his own company, Celtic Comunicações, which provides corporate communications and consultancy services. He can be contacted at johnfitz668@gmail.com. This article originally appeared on his site www.brazilpoliticalcomment.com.br.

© John Fitzpatrick 2009


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