Lula Seeks Growth With Fiscal Responsibility, Says Economic Aide

Investors need not worry about the leftist leader overspending if he returns for a third term, says Alexandre Padilha

Luiz Inacio Lula da Silva, Brazil's former president, and current presidential candidate.
By Simone Iglesias and Daniel Carvalho
June 03, 2022 | 09:53 AM

Bloomberg — Brazil’s Luiz Inacio Lula da Silva plans to boost growth with a campaign against hunger and a program of government-led investments if elected president, all of that without jeopardizing fiscal accounts, according to one of his closest aides.

Alexandre Padilha, one of Lula’s many representatives in talks with financial markets ahead of the October vote, says that investors need not worry about the leftist leader overspending if he returns for a third term. The so-called spending cap rule that limits public expenditures, harshly criticized by the former president, would just be replaced by another fiscal anchor.

“We are not a spendthrift government,” Padilha, who was minister of institutional relations under Lula, said in a video interview on Wednesday. “Fiscal responsibility was always a hallmark of Lula’s eight-year administration.”

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Padilha has participated in several meetings with local and foreign investors to present the guidelines for an economic program that is short in details because they haven’t been decided yet. He tries to assuage investors’ anxiety by assuring that Lula is open to discussing his program with all economic players as he strives to put together a broad coalition against President Jair Bolsonaro.

“The conversation with markets has already started and won’t stop,” he said. Lula will likely intensify talks with investors in August, when the campaign officially starts according to the electoral law.

Business leaders also need to be willing to talk to Lula, according to Padilha, who added that many are afraid of publicly doing so “as they fear persecution by Bolsonaro.”

Lula on Tuesday said he will speak directly with investors when he sees fit, and rejected the idea of elevating one of his economists to the role of spokesperson.

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Yet Padilha is no economist. He’s a 50 year-old physician who has developed a political career at the Workers’ Party, more recently as a lower house representative, and who became a close aide to the former president due to his ability to build bridges while in Lula’s cabinet.

Asked whether he would take a job in a possible new Lula administration, Padilha just laughed and said he’s working to be re-elected for another term at the lower house.