São Paulo

Neoliberalism lost the elections in Brazil by a landslide on October 27, when 52.8 million people rested their hopes on Luiz Inácio "Lula" da Silva to revitalize the national economy and give currency speculators the boot. Lula's smiling face covers the newsstands here. Television loves him. A week after Election Day, Workers' Party flags, bright red with a white star in the middle, still hang over balconies of luxury apartment buildings. It's not uncommon to hear people greeting each other with "Lula la" ("There's Lula")--a lyric from his campaign songs--or making an L with their index finger and thumb. Even Klaus Schwab, founder of the World Economic Forum, the archenemy of Lula politics, has said that Lula signifies the beginning of fair trade and socially responsible globalization.

Lula was elected because Brazilians of all social classes are tired of depending on the International Monetary Fund; sick of a rising dollar that increases basic consumer goods like food and gas; and fed up with 21 percent prime rates that make it difficult for companies to invest in growth. Lula's economic plan was fairly straightforward: Attract investment--foreign and domestic--into the productive economy, not into government bonds.

For now, Lula's biggest obstacles are the federal budget and the central bank. In eight years, public debts doubled to 61 percent of GDP. Lula has little wiggle room. The economy has grown by only 0.5 percent this year. He's hoping it grows by 3-4 percent next year; many of his social programs, like Zero Hunger, largely depend on it. Lula has promised "some autonomy" to the central bank, but if the bank serves the market too slavishly, it will put a noose around his neck. (The bank president will be announced by December. Lula's transition government is taking its time. )

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