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Lula vows to spur Brazil's economy

Brazilian President Luiz Inacio Lula da Silva greets supporters after being sworn in for his second term in Brasilia on Monday. PHOTO: AP

President Luiz Inacio Lula da Silva pledged to use his second term to fuel economic growth, while improving social programs aimed at easing the huge gap between Brazil's rich elite and its poor masses.

Lula, who was re-elected in a landslide on Oct. 29 despite a series corruption scandals involving his leftist Workers' Party, was sworn in to another four-year term on Monday at Brasilia's futuristic congressional palace after arriving in a classic Rolls-Royce convertible, in keeping with inaugural protocol.

But the former union leader insisted he has not lost sight of his roots as the son of a poor farmer from Brazil's northeast who moved as a child to the financial center of Sao Paulo as part of a wave of poor Brazilians seeking economic opportunity in the richer southeast.

In his inauguration speech, he promised to increase Brazil's lackluster economic growth rate, which has lagged behind the rest of South America, without sacrificing the social programs that experts say have helped lift millions out of poverty and are largely responsible for his popularity.

"We will remove obstacles so that Brazil can grow in an accelerated way," Lula said. "Brazil can't continue to be prisoner held in a web of invisible steel, debating and agitating, without seeing the fabric that holds it back."

He said he would soon unveil economic policies to spur annual economic growth of 5 percent -- a goal most analysts consider lofty.

In an open-air address to 10,000 supporters outside the presidential palace, Lula said the poor deserve better-paying jobs in a nation where the minimum wage is US$166 a month. He promised to improve access to education, cut government red tape and push for tax incentives and infrastructure improvements that would allow businesses to hire more workers.

Lula told lawmakers that he would stick to orthodox monetary policy, affirming investor bets he will not invoke populist measures that could spook markets.

"Our administration never was and is not populist," h said. "This administration was and is for the common people."

But getting congressional support for structural economic reforms that experts say are necessary to improve the economy and provide the well-paying jobs wants to provide could be difficult.

Lula's administration was paralyzed last year by a bribes-for-votes scandal that resulted in resignations from his inner circle, and members of his party were implicated during his re-election campaign in a dirty-tricks scandal against an opposition party.

Business-friendly reforms could further alienate Lula from a leftist base that feels betrayed by his adherence to conservative economic policy, analysts say.
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