Widening Expectations

Sep 1, 2004

Lula had a rough start in office, but the economy is beginning to recover. Now he needs to ensure that boom doesn't turn to bust.

For Luiz Inácio Lula da Silva, Brazil's left-leaning president, August was like Christmas come early. On the Friday the 13th he was able to go on national radio and television and tell Brazilians: "Today, after a little more than a year and a half in government, after much hard work and much sacrifice, I have good news for you. There is no longer any doubt. We are, at last, beginning a new and important cycle of recovery and growth."

The relief in his voice was there for all to hear. Until just a few months earlier, voters were clearly losing patience. Far from producing a "spectacle of growth" as he promised during campaigning in 2002, the first year of Lula's government delivered a recession, with the economy contracting 0.2%.

Unemployment hit 13.1% in April 2003. In Greater São Paulo, home to the metalworkers' unions where Lula...

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