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Leftist Runs Far Ahead in Brazilian Vote

Election: Lula wins the first round handily, but he will probably face a conservative in a runoff. The results are a rebuke to pro-market reforms.

October 07, 2002|HECTOR TOBAR and CHRIS KRAUL | TIMES STAFF WRITERS

RIO DE JANEIRO — Luiz Inacio Lula da Silva won a big victory in the first round of Brazil's presidential election Sunday, but the leftist leader failed to achieve a majority and will probably face Jose Serra, the conservative ruling-party candidate, in a runoff.

With about three-quarters of the votes tallied, the man known here simply as "Lula" was leading Serra by 47% to 24%. If the results stand, the two men will face each other in a second round Oct. 27.

"We prepared ourselves to fight this election in one round, and we prepared for two rounds," Lula said early Sunday. "If we win in the first round, that would be excellent."

The large vote for Lula--running for president for the fourth time--signaled a rebuke to the eight years of pro-market reforms and globalization engineered by outgoing President Fernando Henrique Cardoso and his Brazilian Social Democratic Party.

"A large amount of the public recognizes Cardoso as a good president but believes that his government made grave mistakes," said Helio Jaguaribe, a political science professor in Rio de Janeiro. "They think his administration created an economic model that should be replaced."

Finishing third and fourth in the six-candidate field were two center-left candidates. Anthony Garotinho, a former governor of Rio de Janeiro state, came in third with 16%. Ciro Gomes, a former Communist Party activist and later finance minister, was fourth with 13%.

Nearly three-quarters of the Brazilian electorate voted for left and center-left candidates in early returns. And Lula was leading, often by a large margin, in all but three of Brazil's 26 states.

Bush administration officials fear a Lula victory could signal a turn away from free-market reform throughout the region. Lula has promised to seek better terms for Brazil in negotiations over the proposed Free Trade Area of the Americas. Businessmen were also anxious to see what Lula's strong showing will mean for the stock and currency markets when they open this morning.

"The people who moved toward Lula wanted clean politics, seriousness in government, opportunity for new leaders, safety on the streets and a return to hope and happiness in their homes," said Rio economist Paulo Rabello de Castro. "They see Lula as the best alternative to eight years of center-right rule."

Cardoso tamed inflation, privatized government businesses and brought growth to Brazil, but he failed to narrow the great chasm between rich and poor. After he was elected to a second term in 1998--defeating Lula in the first round--economic growth slowed to a crawl.

Unable to run for reelection again because of term limits, Cardoso handpicked Serra to be his successor.

"Brazil is full of problems, but many good things have already been accomplished," Serra said Thursday during the last debate of the campaign. "The important thing is that tomorrow be better than today."

A former health minister in Cardoso's government, Serra gained notoriety when he threatened to break pharmaceutical patents unless foreign drug companies cut prices on AIDS medications. Still, he was unable to distance himself from the financial crisis.

"We will make it to the second round, if God wills it," Serra said Sunday as he cast his vote in Sao Paulo, South America's largest city and the country's economic nerve center.

A runoff between Serra and Lula would be a showdown between two opposing visions of Brazil's future. Serra is a favorite of the financial markets, and it is widely expected that he would continue most of Cardoso's economic plan.

Lula has called for increased spending on health and education and has said that Brazil is the victim of unfair trade agreements with the United States that hurt working people and the poor.

"We believe we can turn Brazil around and begin to grow again," the candidate said at a news conference last week. "It's the only way out for a big country like Brazil, to resolve the very serious internal social problems ... by creating jobs and creating an equal distribution of income."

Whoever is the next president of Brazil will inherit seemingly intractable economic problems. About 11 million Brazilians are unemployed, while Brazil's public debt has spiraled up to $260 billion, greater than half the gross domestic product. The national currency, the real, has dropped precipitously amid fears that Brazil might default on its debt.

Many well-off Brazilians, fearing a President Lula would intentionally default on the debt, withdrew their savings from the country even before the election, creating a crisis for the banking system.

In August, Lula, Serra and the other candidates agreed to respect the terms of a $30-billion bailout agreement reached between Cardoso's government and the International Monetary Fund.

The agreement calls for a sharp reduction in government spending next year. But Lula has given mixed signals as to whether he would respect the budget targets.

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