No More ‘Second Class’

It's a long way from Brazil's starving northeast to the U.N., but Brazilian President Luiz Inácio Lula da Silva knows -every step. The peasant's son is now the heralded leader of a regional powerhouse and a self-designated spokesman for emerging nations everywhere. On the eve of the U.N. meeting in New York last week, Lula talked to NEWSWEEK's Mac Margolis about Brazil's rise, clean energy, the economic crisis, and what poor countries can teach the superpowers.

When you took office, Brazil was regarded as an underachiever, and the last among the BRICs. Now it's a star. What's happened?
No one respects anyone who doesn't respect themselves. Brazil always behaved liked a second-class country. We always told ourselves we were the country of the future, but we never transformed these qualities into anything concrete. In a globalized world, you have to hit the road and sell your country. So we decided to strengthen Mercosur [the South American trading bloc] and to deepen our relations with Latin America. We prioritized trade with Africa and went into the Middle East. Our trade balance today is highly diversified. This helped us cushion the blow of the economic crisis. It created a bond between Brazil and other countries, and today we are on equal footing in international relations.

Has Brazil's success in navigating the economic crisis changed investors' views?
There was no miracle. We had a strong domestic market. We had consumers who wanted to buy. We reduced the sales tax and asked companies to offer consumers affordable credit. And the result is that we are beating record after record in sales. If all the countries had done this as quickly as Brazil and China did, the world could emerge from the crisis more rapidly.

You often criticize privatization. But thanks to the sale of state companies, even the poorest Brazilians have cell phones, and former public companies like Vale have become worldbeaters.
But the state could have done the same things.

Can Brazil maintain its commitment to clean energy with all the heavy investments required to recover its deep-sea oil?
We are going to use money from oil to help exploit clean energy. The two are not incompatible. Brazil is one of the few countries with a huge potential for clean, renewable energy.

Will Brazil agree to emission reductions in the next round of climate-change talks in Copenhagen?
Brazil will support the creation of a fund to encourage carbon sequestration in the poorest nations, but we'll also demand that the rich world lowers its emissions. We need to take measure of each nation's historic emissions so that each of us pays according to its own responsibility.