Lula Wants to Fight

Once a leftist firebrand, Brazil's president Luiz Inácio Lula da Silva turned to free-market liberalism and helped make his country Latin America's biggest economic success. Earlier this month he became the first Latin leader to visit President Barack Obama at the White House, and in April he'll head to London for the G20 summit on the global financial crisis. He met with NEWSWEEK's Fareed Zakaria in New York. Excerpts:

Zakaria: Your meeting with President Obama went longer than expected. What did you talk about?
Da Silva: We talked a lot about the economic crisis. We also decided to create a working group between the U.S. and Brazil to participate in the G20 summit meeting. I told Obama that I'm praying more for him than I pray for myself, because he has much more delicate problems than I. He left a huge impression on me, and he has everything it takes to build a new image for the U.S. with relation to the rest of the world.

You got on pretty well with President Bush. How are they different?
Look, I did have a good relationship with President Bush, it's true. But there are political problems, cultural problems, energy-grid problems, and I hope that President Obama will be the next step forward. I believe that Obama doesn't have to be so concerned with the Iraq War. This will permit him to explore the possibility of building peace policies where there is no war, which is Latin America and Africa.

You are probably the most popular leader in the world, with an 80 percent approval rating. Why?
Brazil is a country that has rich people, as you have in New York City. But we also have poor people, like in Bangladesh. So we tried to prove it was possible to develop economic growth while simultaneously improving income distribution. In six years we have lifted 20 million people out of poverty and into the middle class, brought electricity into 10 million households and increased the minimum wage every year. All without hurting anyone, without insulting anyone, without picking fights. The poor person in Brazil is now less poor. And this is everything we want.

There are people who credit high oil, gas and agriculture prices. Can you manage with prices going down rather than up?
The recent discovery of oil is very important, because part of the oil we find will help resolve the problem of poverty and the problem of education. Brazil does not want to become an exporter of crude oil. We want to be a country that exports oil byproducts—more gasoline, high-quality oil. The investments were calculated at the price of $35 per barrel. Now, at $40, we still have enough margin.

Critics say that during this period of high commodity prices, you did not position Brazil to move economically up to the next level.
This doesn't make sense. When I became president of Brazil, the public debt was 55 percent of GDP. Today it is 35 percent. Inflation was 12 percent, and today it's 4.5 percent. We have economic stability. Our exports have quadrupled. The fact is that the growth of the Brazilian economy is the highest it has been in 30 years.