Big -business allies expect "compromises" from Silva, but Brazil workers see chance to make gains

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

New York Times, Oct. 3
Lula prepares for compromises of power
By Raymond Colitt and Richard Lapper


The militant metalworkers of São Bernardo gave their former leader a
heartfelt welcome when he closed his campaign in the São Paulo industrial
suburb where he led a wave of illegal strikes nearly a quarter of a century
ago. But they were less than enthusiastic when Luiz Inácio Lula da Silva
presented his new-found allies from the mainstream of Brazilian politics and
business.
Clad in their blue overalls, his former shop floor colleagues gave Mr da
Silva only muted applause when he thanked José Alencar, his running mate and
a textile magnate. Support from Mr Alencar - whom he called "the pride" of
his campaign - has helped the Workers' party (PT) leader establish a
formidable opinion poll lead ahead of Sunday's presidential election.
Mr da Silva's evident difficulty in explaining his compromises to hardline
supporters is indicative of the kind of problems his government is likely to
face if he wins. Even if it "occasionally generated strife within the PT",
political alliances were "necessary to achieve victory", Mr da Silva said.
There is no question that a PT government would be broad-based. As well as
Mr Alencar, two former presidents - José Sarney, a conservative, and Itamar
Franco, the controversial governor of Minas Gerais state - are expected to
advise on the choice of ministers. In recent weeks the PT has been courting
support from business and market-friendly economists.
"It is a positive sign and they gave me a good impression," said Raul
Velloso, a public finance expert who has previously questioned the PT's
commitment to fiscal discipline. Mr da Silva promised to maintain a
substantial primary fiscal surplus next year, as part of a $30bn loan
package from the International Monetary Fund.
Mr da Silva says he is likely to include non-party members in his economic
team. Henri Philippe Reichstul, former head of the state-owned oil company
Petrobrás and now an executive with Globo, Brazil's media conglomerate, is
the latest name to surface as a candidate for a top position.
Mr da Silva's colleagues insist they are well aware of the fiscal
restrictions they would face in government. "We received orientation from
the party's economic team to throw out proposals that were not
cost-effective," says Cristovam Buarque, a national party director.
In addition, a group of local businessmen, many from smaller and
medium-sized companies, is actively campaigning for Mr da Silva. Among them
are a number from sectors such as electronics and textiles that have been
hit by economic liberalisation over the last eight years.
However, Mr da Silva's ascent has generated expectations of social change
among more traditional supporters in the trade union movement. He has
frequently promised an attack on inequality and to raise standards of
living. On Tuesday he said he dreamed of "a more equal society where all of
us can work, study and eat at least three meals a day".
"If he wins, we'll have one of us in Braslia. We will recover many of the
conquests we have lost in recent years," says Walter Geronimo, a worker at
the Ford assembly plant.
"Lula is the only hope for the poor because he was once poor himself," says
Geraldo Bras, a welder in the Volkswagen plant who participated in the 1978
strike led by Mr da Silva. "We know he can't increase wages immediately but
he will have to find a way."
Mr da Silva can still sound like a union leader and on Tuesday repeated his
1970s strike slogan: "Nobody should ever doubt the working class."
But maintaining fiscal discipline and economic stability are goals that
could sit uneasily alongside his trade union loyalties.





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