What Lula can teach 'white people'

As the Brazilian president makes good-sense demands at the G-20,  rich countries would do well to listen.

By Paulo Sotero

When Brazilian President Luiz Inácio Lula da Silva last week blamed "white people with blue eyes" for the global economic meltdown, it was an odd gaffe for a leader known and respected around the world for his pragmatism.

"Lula had a Chávez day," wrote the São Paulo daily Estadao, discounting the unfortunate utterance made in Brasilia at a joint press conference with British Prime Minister Gordon Brown. Facing domestic criticism for the remark, the Brazilian president clarified what he meant the next day when he joined other world leaders for the Progressive Governance Conference in Viña del Mar, Chile, ahead of the G-20 summit. Addressing Brown, U.S. Vice President Joseph Biden, and Spanish Prime Minister José Luis Rodríguez Zapatero, Lula said that rich countries were "more responsible" for the crisis now afflicting all countries, but especially the poorer ones, and warned his fellow world leaders against failure at this week's meeting in London. "We cannot run the risk of postponing profound structural solutions," Lula said.

Do not expect the Brazilian leader to tone down his rhetoric at the G-20. He will remind his colleagues of the commitment against protectionism that they all made during their first gathering in Washington, last November, and immediately abandoned. The political difficulties of moving ahead with the stalled Doha round of global trade talks will not prevent Lula from reminding the leaders, especially those from rich countries, of their obligation to practice what their countries have always preached to the developing world about the virtues of freer trade and resist the temptation to build fences that could turn the current world recession into a full-blown depression.

Lula will also raise issues that are difficult for Brazil. He is likely to use his country's strengths in energy (its leadership in production of carbon-reducing ethanol, its expanding capacity in oil and gas) and challenges in environmental preservation (the urgent need to stop deforestation of the Amazon) to highlight the importance of putting climate change on the leaders' reform agenda. It is a controversial subject in his own government. An ambitious climate-change plan launched by the Ministry of the Environment last December still needs to be reconciled with the more defensive stance of the Ministry of Foreign Relations on climate negotiations. It is also, as Lula recognizes, an opportunity. Brazil can exercise global leadership by mediating between traditional polluters among rich countries and major new polluters from the developing world, and open the way for a sensible and effective agreement at the U.N. climate change conference this December in Copenhagen.

Expect the Brazilian leader to challenge his colleagues on the institutions of global governance, starting with the International Monetary Fund and the World Bank. It is difficult to understand and accept that both bodies should keep their current voting structure and continue to be managed exclusively by Americans and Europeans in a world where the United States and Europe represent a decreasing share of the world's economy. Brazil brings more than demands to this topic. It has thinkers and doers who could certainly add to the credibility of both institutions if called to service -- leaders such as former Central Bank President Arminio Fraga and former Finance Ministers Pedro Malan and Rubens Ricupero, the latter a senior diplomat who led the U.N. Conference on Trade and Development for two terms.

Last but not least, hard lessons learned in the long fight to stabilize Brazil's economy in the 1990s have equipped the giant of South America with expertise and proven experience in financial regulation. It is an asset that warrants giving Brazil a seat at the table as leading countries start the difficult work of rebuilding better national and global financial structures.

Paulo Sotero is director of the Brazil Institute at the Woodrow Wilson International Center for Scholars.