PRESS CONFERENCE BY PRESIDENT OF BRAZIL

press conference by president of brazil

In the course of the largest-ever gathering of business, labour, civil society and government representatives today at Headquarters, Brazilian President Luiz Inácio Lula da Silva briefed correspondents on his participation in the “The Global Compact Leaders Summit”.

President Lula said it was important, not just to the Brazilian press, but for the North American press to know that he had come as part of a foreign policy strategy to show what Brazil had to offer foreign businessmen and investors in terms of infrastructure reform and investment opportunities.  He had done that earlier this year in Geneva and he believed it was important to come to the United Nations to show clearly what his country was doing, now that could be useful and attractive for North American investors in Brazil. 

He said he had had an excellent reception, including from officials from several sectors of the United States’ economy.  His concrete objective today was to convince participants that the Brazilian economy had moved into a rhythm of sustainable growth that would be able both to generate and distribute income.  He was certain that North American investors would find a “safe port” in Brazil for their investments.  His country did not have wars or guerrillas, typhoons or volcanoes, but only a bit of snow sometimes -- and that lasts only for half an hour.

The basis for foreign investment had also been addressed from a legal point of view, he said.  Regulatory frameworks had been established, including for the energy sector and in connection with bankruptcy law. The available legal instruments now gave investors clear rules.  He was returning home certain that he had done his duty here; the presentation by his ministers had left no room for doubt about the correctness of Brazil’s economic policies.

At the same time, he said, he could not have refused the invitation by Secretary-General Kofi Annan to discuss the Global Compact.  He had been encouraged by today’s event.  He had not expected to find so many businessmen worried about the world’s social problems.  In fact, social issues today were permeating the actions of so many companies.  He had been particularly pleased to see so many Brazilian businessmen at the event.  That meant things were improving, to the point where Brazilian growth could become sustainable and not erratic. 

Asked to comment on his victory yesterday on the minimum wage issue, despite criticism, he said that all 180 million Brazilians, particularly those at minimum wage, knew that the minimum wage was very low.  A discussion about the minimum wage, however, was really a discussion about social security.  That system had been reformed, but with anticipated medium- to long-term results, and not short-term results.  If the issue had been a concern only for the private sector, then that a much higher minimum wage would have been affordable, but social security had to be maintained for all retired persons. 

He said his policy was to have a commission to present a new methodology for discussing the minimum wage, as that subject should not be used just for partisan electoral speeches.  Everyone knew that the social security system could not afford to pay more than it did.   The Congress had done its duty by voting what had been possible, and next year it would certainly vote for a higher minimum wage.  He had already sent all major economic reforms to Congress, including social security, tax reform, bankruptcy reform, public and private service reform, and new rules for civil construction contracting.  He was now awaiting their approval.  

After almost three months discussing the minimum wage, had the Government really won? another correspondent asked.  The President responded that it was not a matter of winning or losing.  It had taken that long to vote, owing to the pace at which the Congress had worked.  For him, it should have been voted upon on the first day, but Congress set its own pace.  He could not measure the result of the minimum wage result, whether the Government had won or lost.

There was not one Brazilian who would not like to give a higher minimum wage, he added, but, as President, he was responsible for taking care of the budget, and all he could do was what was possible.  He had inherited certain skeletons from the past, including an indexing problem from 1993 and 1994 concerning payments to retired persons.  That additional money could have gone to increasing the minimum wage.  That was also why his conscience was tranquil.  The minimum wage would always be low, but he had done the best he could at this time. 

Replying to another question, he said his policies had nothing to do with the previous Government’s polices.  Just look at the graphs, he urged -- the evolution showed what was happening.  He was not saying that he was doing something novel, but there had been some growth starting in 2002 after a trade deficit of so many years.  Now, record after another was being set in the trade balance.  The interest rate was the lowest in more than 10 years, and Brazilian industry was growing again.  He hoped in four years of government to have made a solid and continually growing economy.

Asked to comment on a controversy between one of his ministers and an employee of the National Development Bank, he said he would take a closer look at that when he returned home, but it was his policy not to comment on such matters publicly. 

To a question about what he had been told about the prospect of Brazil becoming a permanent member of the Security Council, he said that the largest country in South America was claiming that opportunity not only for itself, but also for the United Nations -- to become more democratic.  The United Nations could not continue being organized with the same structure with which it was created nearly 60 years ago.  It must adapt to the new reality.  Even the political map of the world had changed since the Organization was created.  So, an adjustment had to be made, and there had to be more equal participation.  It was not right for South Americans, Africans and Asians not to have permanent representation. 

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