SPIEGEL: Mr. President, when you took office five years ago, many feared that you, as a former union leader, would take the country on a socialist course. Instead, you have adopted liberal economic policies which have led the country to spectacular economic growth. Have you abandoned the principles of your past?
Lula: As president, I have to be there for everyone. That's the strength of democracy. Someone who is elected by the people will pay as much attention to the needs of a banker as to those of a street child or a blue-collar worker by seeking a balance among their individual interests. In 2003, we had to make some very tough changes to our government finances, so that Brazilians can now enjoy more stability. At the time, I used part of the political capital that I had to get the country back in shape.
SPIEGEL: Your country paid off its debts to the International Monetary Fund and has since become a safe place in which to invest. Another 20 million citizens have joined the middle class. Nevertheless there is still an enormous gap between rich and poor among Brazil's 190 million people. How do you expect to overcome it?
SPIEGEL: A drug war is raging in your major cities. Armed gangs control most of the slums in Rio de Janeiro. Has the government lost control over the favelas?
Lula: Police power alone isn't enough to solve the problem. The government itself must make its presence felt and provide opportunities, and then the violence will subside. This is why we are cleaning up the biggest slums throughout the country. We are providing them with drinking water, energy and sewage systems, schools, hospitals and libraries. With economic growth running at between 4 and 6 percent over a number of years, all this becomes possible. We have allocated $270 billion (175 billion) to spend on improving slums as well as modernizing our infrastructure such as ports, highways, railroads and airports -- all without any new borrowing.
SPIEGEL: And now Brazil also plans to become an oil-producing power?
Lula: We discovered immense oil reserves 273 kilometers (170 miles) off the coast, at a depth of 2,140 meters (7,021 feet) and under a 5,000-meter (16,404-foot) layer of salt and rock. We have the know-how to exploit these reserves. We expect to start test-drilling in March and start producing oil in 2010. Then Brazil will become a major oil exporter. We want to join OPEC and try to make oil cheaper.
SPIEGEL: Until recently, you were praising sugar producers as the new national heroes. Brazil has placed its bets on ethanol, derived from sugarcane, as the fuel of the future. But in Europe biofuel is now seen as ecologically suspect.
Lula: Brazil has 33 years of experience with biofuels. The cars that are built in our country come with engines that can run on mixtures of gasoline and ethanol. They reduce CO2 emissions considerably. The sugarcane plantations are cut for five years in a row. While the plants are growing, they capture carbon dioxide. The production is so cheap that it has no competition.
SPIEGEL: There have recently been riots, from Haiti to India, over rising prices for staple foods. Doesn't the farming of biomass for fuel jeopardize grain production?
Lula: I can certainly understand that Europeans would have such doubts. But this argument applies to neither Brazilian sugarcane nor our palm oil. The production of fuel from basic food commodities is, in fact, unjustifiable. But it is the United States that uses corn for biofuel, which is then no longer available for food, while the Europeans derive energy from sugar beets, rapeseed and wheat. I have always told my European friends that it isn't worth restructuring their well-organized agricultural systems to produce biofuel. We, and the Africans, can do a much better job of it. The European Union should give the Third World a chance to produce biofuel. Besides, we should not forget that the higher cost of petroleum and fertilizers also contributes to the higher price of food. This is glossed over.
SPIEGEL: But the expansion of farmland for sugarcane takes away space for corn and soybean fields.
Lula: We have an abundance of land -- 280 million hectares (692 million acres) of farmland -- as well as plenty of sun and water. Sugarcane is grown on only 3 percent of this area. Rich countries should stop subsidizing their own agriculture and lift their high import tariffs.
SPIEGEL: The governor of the state of Mato Grosso, the world's largest soybean producer, has said that more rainforest will have to be cut down to cover the demand for food, especially in China. Does high consumption of meat and soybeans in emerging economies lead to destruction of the environment in Brazil?
Lula: That isn't true. The Amazon region isn't very well suited for cattle pastureland. And the soil isn't good for sugarcane or soybeans either.
SPIEGEL: And yet the illegal slashing and burning continues.
Lula: We have tightened our controls. Deforestation has declined by almost 60 percent in Brazil. But more than 22 million people live in the Amazon region. They too want to eat, drive cars and use refrigerators.
SPIEGEL: Left-leaning governments are in power almost everywhere in South America. But the continent is divided into a more social democratic movement, which you lead, and a more radical one, shaped by Venezuelan President Hugo Chavez. Are there any commonalities within the Latin American left any more?
Lula: The left in South America still uses the same slogans as the European left did in the 1920s and 1930s. Politicians take a more radical position in places where there is hunger, and where people have no access to education. This continent was churned up by military coups. Guerrilla groups were still active in many countries only 20 years ago. Today we all agree -- with the exception of FARC in Colombia -- that elections are the only legitimate way to acquire power. The victories of Hugo Chavez, Evo Morales in Bolivia and the others, most recently Fernando Lugo in Paraguay, signify democratic progress. It was high time that presidents were elected who are truly of the people.
SPIEGEL: But it's precisely Chavez, with his concept of socialism for the 21st century, who is intervening in the internal affairs of other countries, especially in the Andean region. Isn't he destabilizing the entire region?
Lula: He'll maybe have problems in his own country. Chavez is without a doubt Venezuela's best president in the last 100 years. Nevertheless, he has far less influence than people say he has. Europe has no need to worry about the left in Latin America.
SPIEGEL: A war almost broke out recently between Colombia and Ecuador.
Lula: And that's where Chavez proved to be a peacemaker. Fortunately, war in Latin America is usually waged only with words. The tongue is our most dangerous weapon. We talk too much!
SPIEGEL: But the hot spots in South America cannot be denied. The violence in Bolivia threatens to escalate because wealthy provinces are seeking to declare their autonomy. Can't you exert your influence to prevent further bloodshed?
Lula: Brazil, together with Argentina and Colombia, has formed the Group of Friends of Bolivia to help the country. When comrade Evo is ready to negotiate, we'll be ready to broker talks.
SPIEGEL: You worship Fidel Castro and visited him in January. Now his brother Raul has announced economic reforms. Can Brazil help the country democratize its system?
Lula: I respect the path Cuba chooses to take. Raul is proving to be an able successor. We would like to help him. Brazilian agricultural experts will plant 20,000 hectares (43,429 acres) of soybeans in Cuba, which will be the first plantation of its kind on the island. We are also building roads and are involved in the production of pharmaceuticals. The Cubans have a high level of education, and now it is time for them to create the basis for making the next big development step.
SPIEGEL: You maintain a friendship with the Castro brothers and yet you also have an excellent relationship with US President George W. Bush. How do you manage that balancing act?
Lula: I know how to move between political camps. When everyone in the world hated (Libyan leader Moammar) Gadhafi, I paid him an official visit. It caused an uproar -- Lula's visiting the devil!
SPIEGEL: Is it even possible to be on the left in Latin America without rebelling against the Americans?
Lula: There's always a certain price associated with being a major power, and that applies to us too, as South America's economic giant. The United States has always tried to dominate Latin America. In Bolivia, the US ambassador called together foreign aid organizations to slander Evo Morales. Those who act this way make enemies. I advised Bush to support, in particular, Central America and the Caribbean with development aid.
SPIEGEL: Brazil and China, two rising economic powers, have entered into a strategic alliance. So far, it has led to the Chinese buying up your raw materials and flooding the market with cheap goods. Didn't you expect more from them?
Lula: All countries have problems with China's economic power. We recognized China as a market economy so that it could take part in World Trade Organization talks. Now we need to make sure that China sticks to the rules that everyone accepts.
SPIEGEL: Germany has lost political and economic influence in Brazil in recent years. France, Spain and even the Netherlands are investing more. How do you explain that?
Lula: I understand that the Germans turned mainly to Eastern Europe after the Berlin Wall came down. But now they should pay more attention to Brazil and South America once again. They should think about the potential this region will have in 10 or 15 years. We plan to build three new hydroelectric power plants and two nuclear power plants, as well as a high-speed rail link between Rio and Sao Paulo. The Spaniards are already involved. I would like to show German Chancellor Angela Merkel more than just the capital during her upcoming (May 13-15) visit to Brazil. I would like to take her to the Amazon region, to the Brazilians of German descent in (the southern Brazilian city) Blumenau and to a company meeting at Volkswagen.
SPIEGEL: After five years in office, you remain very popular. Do you plan to run for office again?
Lula: Two terms are enough. Otherwise the democracy ends up turning into a petty dictatorship. Change is good for the country.
SPIEGEL: But then you won't experience the final between Germany and Brazil at the 2014 World Cup as the host in Rio's Maracanã Stadium!
Lula: Admittedly not as president, but I'll be there as a football fan. That will be easier for me.
SPIEGEL: Mr. President, thank for you for the interview.
Interview conducted by Jens Glüsing and Helene Zuber.
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