Analysis: Brazil’s Lula aims to pave the way for successor

By Raymond Colitt

BRASILIA (BestGrowthStock) – Brazilian President Luiz Inacio Lula da Silva, with a sky-high approval rating, aims to push an aggressive legislative agenda in his final two months in office to help pave the way for his protege, President-elect Dilma Rousseff.

Rousseff’s decisive victory in Sunday’s presidential runoff vote and the overwhelming majority her governing coalition won in Congress have prodded the Lula administration back into action after a long election campaign.

Lula, who enjoys public approval ratings above 80 percent, already has achieved the enviable feat of getting his chosen candidate elected to succeed him on New Year’s Day.

In a cabinet meeting on Wednesday, he is expected to urge ministers to redouble their efforts as the year comes to a close. The priorities for Lula are to approve an oil reform bill and a tight 2011 budget that spares Rousseff, his former chief of staff, the need to make unpopular budget cuts.

“He wants to solve thorny issues for her,” a cabinet member who asked to remain anonymous told Reuters.

Local newspaper Folha de Sao Paulo reported on Tuesday that Lula is readying unpopular economic measures aimed at ensuring a smoother start for Rousseff, including a smaller wage increase for civil servants and budget cuts.

“By no means is the Lula government over. We have important proposals we’re going to approve this year,” Romero Juca, government leader in the Senate, told Reuters.

Lula also will try to clear his plate of several political hot potatoes to ease the transition for Rousseff. These include a $4-6 billion jet fighter deal and a controversial decision on the pending extradition of former Italian guerrilla Cesare Battisti.

The Supreme Court ruled in favor of Battisti’s extradition but the president has the final word.

Rousseff, a former guerrilla leader who has never before held elected office, could be stuck between those in her leftist Workers’ Party who oppose extradition and critics who would accuse her of siding with a convicted criminal.

The jet fighter deal is controversial because of its price tag and Lula’s apparent political preference for buying the aircraft in France rather than the United States or Sweden.

OIL REFORM

But Lula’s biggest priority is to obtain framework legislation in Congress that would heighten government control over the development of vast new oil reserves.

Lula sees the newfound oil wealth as a fast track to developed-nation status for Brazil. The bill’s approval would complete a legacy that already includes having pulled 20 million people out of poverty during eight years in office.

The government, which holds a majority in both houses of Congress, hopes legislators following the election will set aside controversy over the distribution of oil revenue among states, which deadlocked the bill in July.

“I can guarantee the government will fight, bend over backward to approve (the bill),” said Candido Vaccarezza, government leader in the Chamber of Deputies, the lower house.

If time runs out, the bill would likely be passed early in the administration of Rousseff, who co-authored the proposal, analysts say.

Senate leader Juca also wants to vote on a handful of microeconomic reforms, including a positive credit registry to help banks offer cheaper credit, swifter antitrust rulings, and streamlined government procurement procedures.

But given disagreement in Lula’s Workers’ Party on some of the proposals, their approval is less certain.

Another challenge will be to resist pressure from legislators eager to inflate spending in the 2011 budget.

“The idea is for the current government to assume the political cost of a fiscal adjustment, but it won’t be easy because there are a lot congressmen needing to pay back campaign favors,” said Andre Cesar, congressional expert at CAC political consultancy in Brasilia.

A broader pitfall to the entire legislative agenda is a possible power struggle among allies within the governing alliance that could paralyze Congress.

Having done well in congressional elections, several allies are now demanding increased say in the next government.

“There will be a lot of noise over the formation of government and that could slow things down,” CAC’s Cesar said.

(Editing by Will Dunham)

Analysis: Brazil’s Lula aims to pave the way for successor