Posts tagged ‘Lula’


Former Brazil VP Jose Alencar dies at 79

From Associated Press

Former Brazilian Vice President Jose Alencar died Tuesday after a long battle with abdominal cancer. He was 79.

The textile magnate shared eight years of government with Brazil’s first working-class president, Luiz Inacio Lula da Silva, who left office as new leader Dilma Rousseff was sworn in at the New Year.

With Rousseff and Silva on a trip to Portugal, interim president Michel Temer offered his condolences to Alencar’s family, calling the former vice president an example of perseverance and hard work for all Brazilians.

Some Brazilians wept at the steps of the hospital where Alencar had been treated over the years in his ongoing battle with cancer.

“He is a man who lives in the heart of all Brazilians,” presidential secretary Gilberto Carvalho said at a news conference.

The Sirio-Libanes Hospital in Sao Paulo said Alencar arrived on Monday in critical condition. According to the hospital, he died of multiple organ failure while surrounded by his immediate family.

He was sedated and without pain, according to a note released by the Antonio Carlos Onofre de Lira Galvao, head of the medical team overseeing his care.

Alencar underwent 17 surgeries, including one at the Memorial Sloan-Kettering Cancer Center in New York. He had also been treated with an experimental drug at the University of Houston’s MD Andersen Cancer Center.

He won the respect of many Brazilians with candid talk about living with cancer and his promotion of preventive practices that lead to early detection.

Alencar, a multimillionaire businessman, was picked as Silva’s running mate in 2002 in a clear bid to win the support of bankers, ranchers, business leaders, military officers and foreign investors who feared the former trade union leader’s radical leftist past.

Like Silva, Alencar was raised poor; he was the 11th of 15 siblings. While Silva joined the labor movement and toiled as a lathe operator, Alencar built an empire of textile factories and amassed a fortune once estimated at about $200 million.

Silva went on to gain fame as a skillful union negotiator and became the leader of the ruling Workers Party. Alencar eventually turned to politics in the conservative Liberal Party dominated by evangelical Christians. He was elected to Brazil’s Senate in 1998.

Despite their different paths, Alencar was one of Silva’s biggest supporters in Brazil’s contentious political arena, standing by the president during corruption scandals that cost some of Silva’s closest aides their jobs.

He was not afraid to criticize Silva’s policies, however. Early in the president’s first term, he criticized the administration for maintaining interest rates of nearly 27 percent, saying they kept businesses from growing.

Alencar was born Oct. 17, 1931, in the small rural town of Itamuri in Minas Gerais state.

He left home at age 14 to work as a salesman in a dry goods shop and by the time he was 18, he had opened his own store.

In the following years he worked as a traveling salesman, opened and closed a pasta factory and worked as a textile wholesaler.

In 1967 he teamed up with a wealthy businessman in the cotton processing business and founded Coteminas, today one of the largest textile businesses in Brazil.

In 1994 he ran for governor of Minas Gerais but lost, and four years later he won a landslide victory to the Senate.

Alencar is survived by his wife Mariza Campos Gomes da Silva his son Josue Christiano and daughters Maria da Graca and Patricia.



Brazilian President Rousseff Escapes Lula’s Shadow

Her first victories show her to be a tough negotiator, but is she tough enough to tame inflation?

By Harry Maurer, Bloomberg Business Week

It’s been a good start for Dilma Rousseff. The Brazilian President, who took office on Jan. 1, has stepped out from under the shadow of her ebullient predecessor and mentor, Luiz Inácio Lula da Silva, and established her identity as a hard-nosed pol. In February, she jack-hammered through Congress a minimum wage far below the amount demanded by the unions that constitute the base of her Workers’ Party. Then her government sent a valentine to the markets by pledging to slash this year’s budget. During President Barack Obama’s visit, she bluntly called for a more balanced trade relationship with the U.S.

“People are pleased,” says Robson Barreto, a corporate lawyer who heads the Rio de Janeiro chapter of the American Chamber of Commerce for Brazil. “She’s making her own decisions, and they’re not necessarily the ones Lula would have taken.” In a Datafolha poll released on Mar. 21, Rousseff had a 47 percent approval rating, higher than Lula’s after three months in office.

Yet Brazilians also are starting to feel uneasy about how expensive their emerging-market economy is getting. Rousseff inherited an economy superheated in part by Lula’s effort to get her elected. Federal spending exploded in 2010. In February inflation reached its fastest rate—6 percent—since November 2008. Consumers are feeling the pinch. “My grocery bill is getting bigger every month,” says Alexandra Camargo, a 26-year-old hairdresser shopping at a C&A Group apparel store in Copacabana. “Services are more expensive. I only buy what’s strictly necessary, and I pay in installments.” The central bank has raised the benchmark rate from 8.75 percent a year ago to 11.75 percent. Economists expect another half-point hike in April.

With spending cuts imperative, the new President demanded that her coalition support a formula increasing the minimum wage by 6.8 percent, to $324 a month, though the unions called for $360. It was a crucial fight because pensions are linked to minimum-wage levels. The bill passed overwhelmingly, to the unions’ dismay. “It was a disaster,” says Ricardo Patah, president of the 6 million-member General Union of Workers. “With Lula it was different. He listened to us.”

It was hardly a complete victory for fiscal hawks. Under the formula, the wage could rise 13 percent in 2012. The recent announcement of 50.7 billion reais ($30.5 billion) in budget cuts was undermined days later when Rousseff announced a 2.2 billion reais increase in the “Bolsa Familia” welfare program. The Treasury also said it would borrow 55.1 billion reais to lend at heavily subsidized rates to the national development bank, which in turn will lend out the money for infrastructure projects. “The budget cut is positive,” says Felipe Salto, an analyst at Tendencias Consultoria Integrada in São Paulo. “But the government’s argument that the bank’s cheap credits don’t pressure inflation is wrong in the short term.”

The rising real is another issue. Investors borrow cheaply in Japan and the U.S. and invest the money in Brazil, whose rates pay more. The real has appreciated 8.5 percent against the dollar in the past year and 4.2 percent against the yuan, raising the cost of exports and exposing industry to cheaper imports. Analysts surveyed by the central bank predict growth of about 4 percent this year, vs. 7.5 percent in 2010.

Some investors suspect that the new central bank chief, Alexandre Tombini, may prove softer on inflation than his predecessor, Henrique Meirelles. (Fund managers have dubbed him Pombini, a play on the Portuguese word for dove). In the minutes of its March meeting, the bank’s policy board hinted that the next rate increase might be the last for now. Newton Rosa, chief economist at SulAmérica Investimentos in São Paulo, called the report “extremely dovish.” To restrain the real and cool credit growth, the central bank says it may rely more on higher taxes on capital inflows and steeper reserve requirements for banks.

Rousseff also needs to grapple with primitive infrastructure, an arcane and burdensome tax system, poor public education, scanty private investment, and a bureaucracy so tangled that the country ranks 127th in a World Bank survey that measures the ease of conducting business. She has indicated that modest tax reform may be her first effort to fix long-standing problems. She’s a seasoned player who served as Lula’s Energy Minister and cabinet chief. “Her advantage is that she already has the whole government in her head,” says Communications Minister Paulo Bernardo. “She knows more about governing than Lula did when he took power.” What remains to be seen is the scope of her aspirations and political skill.

The bottom line: Brazilian President Dilma Rousseff’s first victories against overspending may be fleeting unless she resists budget-sapping initiatives.

With Iuri Dantas, Adriana Brasileiro, and Eric Martin. Maurer is an editor for Bloomberg News in Rio de Janeiro.