Editorial

Brazil is a massive country with a massive rain forest, the second largest river in the world and South America's largest economy with a GDP of $795.7 billion. It has a small, wealthy class and a vast, poor working class that has seen its lot improve since Luiz Inacio Lula da Silva became its President in 2002.

It needs to be remembered that the improvement of the economy had already started under the previous President, Fernando Henrique Cardoso, who was elected after a three-year stint by Fernando Collor, the first democratically-elected President after 25 years of military rule.

The fears at the time was that Brazil would lurch to the left after Mr Lula's election. He opted for the centre ground but his party has been reeling under allegations of corruption. In fact, the corruption scandals that have dogged him (charges of corruption were never levied at him) were mainly responsible, earlier this month, to prevent Mr Lula winning the presidential elections outright.

His opponent, Geraldo Ackmin, the former state governor of Brazil's richest state of Sao Paolo, shocked him by garnering 42 per cent of the vote, forcing a second round. As is the rule in politics, accusations from one side are countered with accusations by the other. Mr Lula took the offensive against Mr Ackmin by warning voters that, if elected, his opponent would privatise state industries and even end the family allowance programme Mr Lula had introduced to help 11 million poor families by providing them with monthly payments.

Mr Lula's main achievements have been the reduction of Brazil's high inflation rate, which 10 years ago was giving the impression of behaving like the Reischmark in a defeated Germany when a loaf of bread would cost 1,000 Reischmarks one day and rise to 10,000 Reischmarks the next. Contrary to hagiographic hearsay, Mr Lula did not bring inflation down on his own.

Its decline started under President Cardoso. But by raising interest rates, Mr Lula coaxed the currency to levels that brought down the cost of living and contributed to improvements in the conditions of many in the working class (millions are still living in deprived conditions).

What cannot be gainsaid is that Mr Lula continues to be recognised by the majority of Brazilians as the man they wish to see leading them for the next four years. The landslide victory he scored in the second round is doubtless a recognition of his successful initiatives to reverse Brazil's historic and shameful inequalities.

In the aftermath of that victory he declared that his objective would be "to ease the divide between rich and poor and to improve education so that Brazil can a take a leap in quality in the world of politics, economics and business". For which read a greater say in world affairs.

Surprisingly, Mr Lula has allowed himself to be overshadowed by the Venezuelan leader when it would seem to make more sense if Brazil's pragmatic leader should make a bid for leadership of the South American continent. The world will be watching the man who lost three elections before he won by trimming his left-wing programme to one that acknowledged the vitality of private enterprise in the creation of wealth. It will wait to see whether he will continue to build on a private enterprise-led growth through social democratic policies, whether he will weed out the corruption that clearly exists in his Workers' Party. If he fails to do so, there will be squalls ahead.