Brazil Swears In New Leader

Times Staff Writer

Amid a swirl of red flags and a chorus of leftist slogans, Luiz Inacio Lula da Silva was inaugurated president of Brazil on Wednesday. He promised to launch a crusade for social justice, but his aides announced that one of his first acts will be a fiscally conservative move to limit the size of government.

"When I look at my own life ... I know with great certainty that we can do much more," said the man most Brazilians call simply Lula, recalling his rise from an impoverished rural family to become a factory worker and union leader and, now, president of Latin America's largest nation.

"We will bring about change with courage and humility," the country's first elected leftist president said in his inauguration speech before the National Congress, an address that was notable for its lack of specifics on the steps that will be taken to confront the nation's economic crisis and its $260-billion debt.

That didn't seem to matter Wednesday: More than a few of Lula's supporters greeted the arrival of his caravan with the wild enthusiasm of rock fans. One man nearly pulled the new president out of his moving Rolls-Royce in an attempt to embrace him, while others jumped into the pools of water that surround many government buildings here, waving their arms frantically as Lula passed.

Today, Lula is scheduled to sign his first decree, said Jose Dirceu, his chief of staff. It will require all ministers to reduce their personal staffs by 10% and will prohibit them from issuing new government contracts for 30 days.

Such austerity defined the government of Lula's pro-market predecessor, Fernando Henrique Cardoso.

And in the weeks before the inauguration, Lula filled key economic posts in his Cabinet with men considered friendly to Wall Street and the international investment community, including his nominee for president of the Central Bank, Henrique Meirelles, a former executive at BankBoston.

"Change will be slow and gradual," said Luciano Dias, a political scientist here.

Yet, as was clear again Wednesday, many of the voters who elected Lula in a landslide in October expect nothing short of a wide-ranging social revolution. They want quick action on the promises he reiterated in his inauguration speech, including agrarian reform and a "zero hunger" program.

"This is a victory of the people," said Odete Costa, an activist from the new president's Workers' Party from the Amazonian state of Para who spent the better part of a week traveling by riverboat and bus to this capital city for the celebration. "We will have a new kind of government, we will do away with corruption, and we will fight hunger."

In all, more than 100,000 people, many of them Workers' Party activists, descended on the city to celebrate the inauguration.

Cuban President Fidel Castro was among the visiting dignitaries, as was beleaguered Venezuelan President Hugo Chavez -- both fiery leftists.

"It is a very happy day for me because Jan. 1 has always been an important day for the Cuban people," Castro told reporters at his hotel after arriving in Brasilia late Tuesday. A revolution brought Castro to power in Cuba on New Year's Day, 1959. "And now Jan. 1 will also be an important day for the people of Brazil."

Lula was scheduled to have breakfast today with Chavez, then lunch with Castro. The meetings would bring together the most powerful critics in the hemisphere of U.S. foreign policy.

Last month, the government of outgoing President Cardoso agreed to supply emergency gasoline to Chavez as he confronted a weeks-long strike that has crippled Venezuela. The move was widely seen as taken at Lula's request.

"Brazil has the support of the revolutionary people of Venezuela," Chavez said.

In his inauguration speech, delivered with both Castro and Chavez in the audience, Lula received the loudest and longest ovation when he offered a jibe at the Bush administration's war talk over Iraq.

"International crises, like the one in the Middle East, should be resolved through peaceful means and negotiation," Lula said.

More than 100 countries sent representatives to the inauguration. The U.S. sent Trade Representative Robert B. Zoellick.

Zoellick met Wednesday morning for an hour with Antonio Palocci, Lula's finance minister.

"It was a listen-and-learn visit, in which the basic economic problems of Brazil were discussed," Zoellick said in a statement.

While still a presidential candidate in August, Lula agreed that he would abide by an agreement with the International Monetary Fund to maintain a budget surplus of 3.75% during his first year in office.

"One thing that the Workers' Party has learned in these past eight months [of the campaign and the transition] is that the markets have power and the party will have to abide by that," said Alexandre Barros of Political Risk Analysis, a consulting firm here.

But the radical wing of the Workers' Party -- a third of the party is made up of Maoists, Trotskyites and other Marxists -- is resisting Lula's orthodox economic plans.

Heloisa Helena, a senator and party activist, abstained from the vote last month in which Meirelles' appointment was confirmed. She has promised to fight to keep the new government true to its leftist roots.

"In a country of this size, as big as a continent, you can't have important change without conflict," she said.

Lula was much more strident and radical in his second speech Wednesday, made from the balcony of the Planalto Palace to a crowd of thousands of party militants gathered below.

"We will improve health care, undertake agrarian reform, fight hunger," he said. "That is our responsibility to the Brazilian people."

Jose Genuino and other party leaders have said the Brazilian people won't have to wait long before Lula begins to act on the more radical promises of his campaign, including the agrarian reform program.

"The hope that the Brazilian people have placed in us is a political capital we can't afford to lose," said Genuino, the party's national president. "We are going to work with the Congress, and we are going to show them we can resolve the country's problems without the kinds of conflicts we've seen in the past."

Genuino spent time in prison during Brazil's dictatorship in the 1960s and '70s, as did several members of Lula's new Cabinet, including Chief of Staff Dirceu and new Culture Minister Gilberto Gil.

Gil, one of Brazil's most respected and beloved pop singers, donned a suit for his own inauguration ceremony Wednesday, just hours after performing onstage with his band as part of a vast street party organized to celebrate Lula's swearing-in.

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Correspondent Paula Gobbi in Rio de Janeiro contributed to this report.

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