AP story: Brazil president sworn in for 2nd term

By VIVIAN SEQUERA, Associated Press Writer
Brazil's first working-class president was sworn in Monday to a second term, renewing his pledges to boost the nation's lackluster economy and ease the deep divide between a rich elite and millions living in misery.

Luiz Inacio Lula da Silva took the oath of office in Congress after riding to the ceremony in a classic Rolls-Royce convertible, according to inaugural protocol, but insisted he has not lost sight of his roots as the son of a dirt-poor farmer from Brazil's impoverished northeast.

"One of my biggest commitments is that I never forget where I came from," Silva told lawmakers in Brasilia's futuristic congressional palace.

Silva, who became Brazil's first elected leftist leader four years ago after gaining fame as a union leader resisting Brazil's 1964-1985 military dictatorship, said low-income workers in the nation of 187 million still have limited opportunities to better their lives.

But he said that he stabilized Brazil's economy and protected it from boom-and-bust cycles, expanded a food program for the poor and set the stage for greater social justice.

Brazil "is better in distribution of wealth, access to education, health and housing," Silva said. "We've done a lot in these areas, but we must do much more."

Silva later thanked thousands of supporters in an open air address outside the presidential palace. Touching on a recent outbreak of gang-initiated violence, Silva promised a tough response, calling it "terrorism."

Criminals attacked police stations and torched buses in Rio de Janeiro last week, killing 19 people. A similar wave of violence started by an organized crime group in Sao Paulo killed some 200 people in May.

"This barbarity that happened in Rio de Janeiro can't be treated like common crime, it's terrorism, and must be dealt with by the strong hand of the Brazilian state," Silva said.

Wearing bright red T-shirts and caps emblazoned with a single white star of Silva's Workers' Party, thousands arrived from far-flung areas of Latin America's largest country to attend the inauguration.

But tropical downpours inundated Brasilia just before the event began, and initially only hundreds gathered outside, some sporting white T-shirts with a picture of Silva and the words, "Let the man do his job!"

Retired metal worker Celio Alves, dressed from head to foot in red and carrying a red flag while yelling party slogans through a megaphone, said resistance from opposition lawmakers had prevented Silva from doing more for the poor.

"He's had it tough because he's been governing without support of Congress," said Alves, 64, who traveled 560 miles by bus from Sao Paulo. "I'm a faithful believer in his commitment to the poor, he's the face of the poor."

Despite the leftist backdrop of the inauguration, Silva has governed from the center-left amid a strong regional tilt toward leftist South American leaders. He has a cordial relationship with President Bush, and is viewed by Washington as a moderate influence on the continent.

Silva's biggest domestic problem has been economic growth lagging behind the rest of South America. This, along with a corruption scandal that dogged the Workers' Party, put him on the defensive during his re-election campaign, although he won a run-off by a landslide.

After growing just 2.3 percent in 2005, Brazil is expected to post gross domestic product growth of 2.8 percent for 2006, and experts believe South America's largest economy will expand 3.4 percent in 2007 — far below Silva's goal of 5 percent.

Silva has promised that he will map out plans for the economy in coming days. Investors are betting he will not invoke populist measures that could spook markets.

Four years ago, Silva surprised Wall Street by sticking to orthodox monetary policy, as his administration invoked high interest rates that stymied growth but brought down inflation.

The nation's benchmark interest rate has been reduced from a high of 19.75 percent last year, but still stands at 13.25 percent — compared with 5.25 percent for the United States — making it tough for businesses to expand.