Lula at the Halfway Point
The government's reform agenda is bogged down in Congress. Luckily for President Luiz Inácio Lula da Silva, economic recovery is boosting his support.
|A slow day in the
Thanks to Lula's determination to resist the temptation of
resorting to irresponsible policies, Brazil is now beginning to
enter a virtuous circle of growth. This has significant
political implications as Brazil's first left-wing government
enters the second half of its four- year mandate and begins
preparing the ground for reelection in 2006. Continuing
economic recovery is the key to Lula's success. Nonetheless,
there are some important decisions the government must take
soon which could impact the outlook for growth.
There is no sign that Lula will relax the government's
orthodox economic policies. Proof of Lula's commitment to
fiscal orthodoxy was his decision to over-comply with fiscal
targets, to set a realistic ceiling for the minimum wage and to
continue backing his finance minister, Antonio Palocci. Lula
backed Palocci even as he came under heavy fire from within the
governing coalition. Now that the...
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