Brazil's President Lula 'Father of the Poor' Has Triggered Economic Miracle

Brazil is seen as an economic success story and its people revere President Luiz Inácio Lula da Silva like a star. He is on a mission to turn the country into one of the world's five biggest economies through reforms, giant infrastructure projects and by tapping vast oil reserves. But he faces hurdles.

Brazil's President Lula visit the São Francisco river which he plans to tap in a giant irrigation project.
Ricardo Stuckert

Brazil's President Lula visit the São Francisco river which he plans to tap in a giant irrigation project.


Elizete Piauí has been waiting patiently for hours in the shade of a mango tree. She is wearing plastic sandals and baggy shorts over her thin legs. At 40 degrees Celsius (104 degrees Fahrenheit), the air is shimmering on this unusually hot day in Barra, a small city in the Sertão, the heart of northeastern Brazil. But Piauí isn't complaining, because today is her big day, the day she meets the president, who is working to provide her hut with running water.

The rattle of a helicopter signals his arrival. The white aircraft circles once over the crowd before landing. A motorcycle escort accompanies the Brazilian president to the ceremony.

Lula gets out of the limousine wearing a white linen shirt and a green military hat. Ignoring the local dignitaries in their dark suits, Lula heads straight for the crowd behind a security barrier. "Lula, Papai! (Papa Lula!)" Elizete calls out. He pulls her to his chest and shakes the hands of others in the crowd, allowing them to touch, stroke and embrace him. Beads of sweat are running down his flushed face, and people are tugging at his shirt, but Lula soaks in the attention. He feels at home here, in one of Brazil's poorest regions.

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Photo Gallery: Brazil's "Father of the Poor" Transforming Economy
The president spends three days traveling through the Sertão. He knows the route. He came to the region 15 years ago for the first time on a campaign tour, traveling by bus and staying in inexpensive guesthouses. He made stops in every village square, seven or eight times a day, and usually held his speeches from the back of a truck. His voice was usually hoarse and weak by the evening, and he had to change his sweat-soaked shirt up to 10 times a day.

"He is Still One of us"

Now he travels in helicopters and armored cars, while police cars, their blue lights flashing, lead the way along country roads. Volunteers have set up air-conditioners and buffet meals at Lula's lodgings, and sometimes they even roll out a red carpet. The press criticizes the expense, but it doesn't trouble most Brazilians because they're proud of their president. He has made it to the top, they argue, so why shouldn't he enjoy his success? "He is still one of us," says Elizete, "because he is the father of the poor."

Lula is familiar with the fate of the Nordestinos, as the people in Brazil's poor Northeast Region are called. He was born in the Sertão, but his mother eventually put the children on the back of a truck and took them to São Paulo, 2,000 kilometers to the south. Lula's eventual rise to power began in São Paulo's industrial suburbs. His mother was one of the hundreds of thousands of have-nots who left the drought-plagued Sertão with its dried-up fields and livestock dying of thirst, and migrated to the wealthy south to work as doormen, waiters, construction workers or domestic servants.

In a plan to turn this arid region green, Lula is tapping into the waters of the 2,700-kilometer Rio São Francisco, the lifeline for large parts of Brazil. The river provides water to five states, but it makes a wide loop around the Sertão. Under Lula's plan, two canals will bring water from the river across 600 kilometers (375 miles) into the drought-ridden areas. "It's the least I can do for you," Lula calls out to the people in Barra.

Controversial Project

The mega-project, which requires bridging a 200-meter (656-foot) altitude difference, is slated to cost 6.6 billion Real, or about €2.6 billion ($3.9 billion). Lula has deployed soldiers to the region to excavate the canals. Eight thousand workers toil away at the construction sites as earthmoving equipment digs through the steppe. If all goes well, 12 million Brazilians will benefit from the diversion project, which is scheduled for completion in 2025. It is Lula's biggest and costliest project, and probably also his most controversial.

His supporters liken him to US President Franklin D. Roosevelt, who dammed the Tennessee River in the 1930s to provide electricity to the region and who launched the New Deal, a massive investment program to overcome the Great Depression. But critics see the undertaking as a massive money pit. It has also drawn the ire of environmentalists, and even the Bishop of Barra has already gone on two hunger strikes against it. He fears that the diversion project will only cause the river to silt up even further, and claims that the irrigation would mainly benefit the agricultural sector.

The bishop is nowhere to be found, and we are told he is attending meetings outside the city. In truth, however, the cleric is keeping a low profile. Criticism of the president is frowned upon in his congregation. Lula speaks the language of ordinary people, telling his supporters stories of his youth, of the days when his mother would send him to fetch water and he would return home balancing the heavy bucket on his head. He was five at the time.

Brazil was once called "Belindia," a term coined by a businessman who saw the vast country as a cross between Belgium and India, a place of European wealth and Asian poverty, where the chasm between rich and poor seemed insurmountable. Lula was the first to build a bridge a between the two Brazils.

Now he is both the darling of bankers and the idol of the poor. With the so-called worker-president at its helm, Brazil is attracting investors from around the world. Jim O'Neill, the chief economist at Goldman Sachs, invented the acronym BRIC, for the emerging economies of Brazil, Russia, India and China, and predicted a bright future for the South American giant. But his colleagues derided him. China and India certainly had prospects, but Brazil? For decades, the country was seen as a shackled giant, plagued by never-ending crises and inflation.

Rising Economic Power

But today "B" is the star among the BRIC nations, with experts predicting up to five percent growth for the Brazilian economy in 2010. Brazil is currently growing faster than Russia and, unlike India, does not suffer from ethnic conflicts or border disputes. The country of 192 million has a stable domestic market, with exports -- cars and aircraft, soybeans and iron ore, oil and cellulose, sugar, coffee and beef -- making up only 13 percent the gross domestic product.

And because China replaced the United States as Brazil's biggest trading partner at the beginning of this year, the country is not as severely affected by the slump in the US market as it might have been. Brazil's banks are strong and stable, and hardly encountered any difficulties at all during the crisis. Most important, however, is the fact that Brazil is a stable, Western-style democracy.

The country has repaid its foreign debt, and it has even become a lender to the International Monetary Fund (IMF). The government has accumulated more than $200 billion in reserves, and the Real is considered one of the world's strongest currencies. International experts foresee a decade of prosperity and growth for the country. Lula predicts that Brazil will be one of the five biggest economies on Earth by 2016, the year Rio de Janeiro hosts the Olympic Games. It will host the soccer World Cup in 2014.

And then there are Brazil's seemingly unlimited natural resources, vast fresh water reserves and oil. Brazil exports more meat than the United States, and China would be in a tight spot without Brazilian soybeans. At aircraft manufacturer Embraer's hangars near São Paulo, Brazilian engineers build airplanes for airlines around the world, including short-range aircraft for Lufthansa.


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