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President-elect Lula pledges progress for Brazil
( 2002-10-29 11:16 ) (7 )

Brazilian president-elect, Luiz Inacio Lula da Silva, gives his first press conference after his victory in the runoff election, in a Sao Paulo hotel, October 28, 2002. Brazil celebrated a new political era after electing its first left-wing government, while Lula da Silva began the huge challenge of delivering the economic stability and better life he promised.[Reuters]

Brazil's leftist president-elect, Luiz Inacio Lula da Silva, pledged on Monday to quell his nation's financial turmoil and put Latin America's largest country back on the road to sustained growth.

Following his watershed political victory on Sunday to become the country's first elected left-wing leader, the man known simply as Lula called on multilateral lenders like the IMF to stand by Brazil at the same time he promised to fight to reduce hunger among the country's 50 million poor.

"Yesterday, Brazil voted to change, the electorate decided on a new path for the country," Lula told hundreds of reporters in a plush hotel in the financial district of Sao Paulo after his victory in the election runoff.

"This implies the start of a new historic cycle."

Lula, who created his Workers' Party in 1980, won 61 percent in the runoff, defeating Jose Serra, the candidate of President Fernando Henrique Cardoso's ruling coalition. It was Lula's fourth bid for the presidency. He will be sworn in for a four-year term on Jan. 1, 2003.

Brazilians from the Amazon jungle in the north to the industrial south celebrated the former metalworker's win as Lula prepared a government to replace Cardoso, whose eight years in office have yielded mixed results for the country.

While Cardoso defeated hyperinflation and attracted tens of billions of dollars in foreign investment, unemployment is at its highest level since early 2000 and real wages are falling.

While promising his first priority was Brazil's 170 million people, Lula said he would also address the concerns of investors, who have been on tenterhooks for months at the prospect the world's ninth-largest economy is turning left.

"We will face up to the current external vulnerability of the Brazilian economy, a crucial factor in the financial turbulence of the last months, in a safe way," Lula said.

The man who once led striking workers against Brazil's 1964-85 military government added he would push for the quick passage of reforms to Brazil's tax and social security systems , changes long sought by impatient financial markets.

Markets, including stocks, bonds and the local currency + which has lost nearly 40 percent of its value against the dollar this year + were mostly unchanged after Lula's much-awaited statement following a slightly weaker opening.

Lula also said he hoped multilateral lenders would restore credit lines to foreign companies, which have seen their access to capital reduced in recent months amid the market turmoil.

"I think they were encouraging statements. There seem to be very good intentions, but what I noticed were the lack of details," said Siobhan Manning, Latin American debt strategist in New York with the Italian investment bank Caboto.

"Yet no new names for the Central Bank governor," she said.

An adviser to Lula told reporters the president-elect hoped to name his Cabinet team all at once, lessening the likelihood Lula would name his much-anticipated finance minister beforehand.

UNCERTAINTY OVER?

Worries over the economy of the world's fourth-largest democracy have grown in recent months, not least due to fears over how Lula will deal with Brazil's $260 billion debt load.

US Treasury Secretary Paul O'Neill said on Monday, "I'm glad the (election) uncertainty is over and from what I know of Lula, I think they are going to be OK," he said.

The United States and other wealthy country lenders backed a record $30 billion International Monetary Fund loan to Brazil earlier this year intended to see it through the election.

US President George W. Bush is expected to call Lula to congratulate him, and other world leaders have already sent messages. Lula, who was born to a poor family in Brazil's northeast, received invitations to visit Germany and France.

The region's left-wingers jumped on his win as a force for change in Latin America.

In a dig at Bush's description of Iran, Iraq and North Korea as an "axis of evil," Venezuela's populist president, Hugo Chavez, said Lula's win represented the coming of a Latin American "axis of good."

"An axis of evil? More like an axis of good, of the people, of the future," Chavez said in a radio broadcast on Sunday. "A new impulse of freedom is sweeping the continent again."