Lula's stature grows in S. America

"Part of the problem for the United States is the tremendous antagonism with Venezuela, which makes a U.S. role very problematic," noted Michael Shifter of the Inter-American Dialogue, a Washington think tank. "But it's also much deeper. It reflects the fact that Brazil and other countries in the region want greater independence from the United States and want to resolve problems on their own."

Although Chavez has won wide popular appeal among the region's young and disenfranchised -- and Venezuela's oil wealth has bought allies -- his divisive discourse has also alienated many.

With Chavez, Lula dances a delicate tango: He maintains cordial relations with his oil-rich neighbor, a major client for Brazilian goods and services, while sidestepping the Venezuelan's incendiary rhetoric.

Still, Lula shares the United States' wariness about Chavez's burgeoning arms deals and Venezuela's planned military exercises with Russia, noted Amaury de Souza, a political analyst here.

Lula has ordered a strategic review of Brazil's military that could result in massive rearming. Brazil is also considering a purchase of jet fighters from U.S., French and Swedish bidders and a nuclear submarine deal with France.

At home, Lula's popularity -- an opinion poll out last week put his approval rating at 68% -- has little to do with submarines and foreign policy. It's all about the galloping economy.

Brazil, a vast, fertile nation that is among the world leaders in exports of soybeans, beef, iron and coffee, is shedding the vestiges of its Third World image. It has scored big in the worldwide commodity boom, spurred by voracious Asian demand. International investment is pouring in.

In a nation notorious for its unequal distribution of wealth, Lula has managed the difficult challenge of pleasing both the affluent and the impoverished multitudes. While the rich are getting richer and the middle class is expanding rapidly, Lula has dedicated massive social spending to the less fortunate.

"Lula has been lucky: He has had big oil finds at home and economic conditions around the world have been favorable for Brazil," said Aldo Musacchio, a Brazil specialist at Harvard Business School. "The current [U.S.] economic crisis may be a big worry, but in Brazil incomes are growing and people don't think the situation is bad at all."

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chris.kraul@latimes.com

patrick.mcdonnell @latimes.com

Kraul reported from Sao Paulo and McDonnell from Buenos Aires and Santa Cruz, Bolivia. Special correspondents Mery Mogollon in Caracas, Venezuela, Marcelo Soares in Sao Paulo and Andres D'Alessandro in Buenos Aires contributed to this report.