Brazil's Lula Vows to Aid Poor in 2nd Term

Brazil's President Luiz Inacio Lula da Silva waves as he rides an open car on his way to the National Congress to be sworn in for his second term, Brasilia, Monday, Jan. 1, 2007. To the right is First Lady Marisa Leticia Lula da Silva. (AP Photo/Victor R. Caivano) (Victor R. Caivano - AP)

BRASILIA, Brazil -- President Luiz Inacio Lula da Silva pledged to use his second term to fuel economic growth and rein in gang-related violence, while improving social programs that have helped ease the huge gap between Brazil's rich elite and its poor masses.

Silva, who was re-elected in a landslide on Oct. 29 despite a series of corruption scandals involving his leftist Workers' Party, was sworn in to another four-year term Monday at Brasilia's congressional palace.

Despite the glamour surrounding the event _ Silva arrived in a Rolls-Royce convertible _ the former union leader insisted he has not lost sight of his roots as the son of a poor farmer from Brazil's northeast.

In his inauguration speech, he promised to increase Brazil's lackluster economic growth rate, which has lagged behind the rest of South America, without sacrificing the social programs that have helped ease poverty and are largely responsible for his popularity.

"We will remove obstacles so that Brazil can grow in an accelerated way," Silva said. "Brazil can't continue to be prisoner held in a web of invisible steel, debating and agitating, without seeing the fabric that holds it back."

He said he would soon unveil economic policies to spur annual economic growth of 5 percent _ a goal most analysts consider lofty.

In an open-air address to 10,000 supporters outside the presidential palace, Silva said the poor deserve better-paying jobs in a nation where the minimum wage is $166 a month. He promised to improve access to education, cut government red tape and push for tax incentives and infrastructure improvements that would allow businesses in Latin America's largest country to hire more workers.

He also called gang violence that killed 19 people last week in Rio de Janeiro "terrorism," drawing cheers.

"This barbarity that happened in Rio de Janeiro can't be treated like common crime, it's terrorism, and must to be dealt with by the strong hand of the Brazilian state," Silva said in his strongest comment on gang violence in the last four years.

Silva _ whose Workers' Party has strong leftist roots _ governs from the center-left. He has cordial relations with President Bush, and is viewed by Washington as a moderate influence on the continent.

Silva's administration was paralyzed last year by a bribes-for-votes scandal that resulted in resignations from his inner circle, and members of his party were implicated during his re-election campaign in a dirty-tricks scandal against an opposition party.

Business-friendly reforms could also further alienate the former radical union leader from a leftist base that feels betrayed by his adherence to conservative economic policy, analysts say.

"High on the agenda are controlling public spending and serious tax reform," said Michael Shifter, a Latin America analyst with the Inter-American Dialogue Group in Washington. "But politically, the task will be formidable. To pursue such reforms would put him in conflict with his own base and party loyalists."

Silva deserves credit for boosting spending on social programs without raising taxes, but his goal to increase spending even more could hit roadblocks, said Riordan Roett, director of Western Hemisphere studies at Johns Hopkins University in Baltimore.

"He has a decent track record on that in the first four years," Roett said. "But does he have the resources to do more quickly, and is there political support for policies that favor the poorest sections of the population? I doubt it."

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Associated Press Business Writer Alan Clendenning in Sao Paulo contributed to this report.