THE ECONOMIST: "LULA ON HIS LEGACY"

Interview with Brazil's president

Lula on his legacy

The Economist interviewed Brazil’s president, Luiz Inácio Lula da Silva, on September 9th, 2010. Here is an edited transcript of the conversation

Sep 30th 2010

WHEN you entered office, you knew Brazil well, having travelled the whole country. Eight years later, I suppose that you have learnt other things, perhaps that surprised you, both about the country and about government. Has your view of the country changed, after the experience of these eight years? Does the country still hold surprises for you?

President: Well, I think that in life every day brings surprises, and when you govern a country the size of Brazil, every day brings surprises. What most surprises me about Brazil is the extent of the difficulties that we create for ourselves. We create a lot of legislation, to control the Brazilian state itself, that this ends up meaning that things don’t go with the speed any head of government would like. To give you an example of something that frustrates me in Brazil: suppose a president with a mandate for four years wants to carry out some big infrastructure project, between him conceiving of the project, doing the basics, the planning, getting the environmental licence, getting the licence to start work, dealing with the tender, dealing with the judiciary and the lawyers—his mandate is over and he does not get the job done.

I’ll give you a concrete example. The Trans-Northeastern is a 1,720km railway linking the port of Suape in Pernambuco and the port of Pecem in Fortaleza, passing through Eliseu Martins in Piauí, to bring out all the soyabeans and iron ore from that region. We spent almost two years, with the Treasury, the planning ministry, the National Development Bank (BNDES) arranging the financing to build the railway, which was one of the privatised railways in which there had been no investment. And every time it seemed that the project was finished, along came another problem: a problem with the state of Pernambuco, a problem with the state of Ceará, a problem with the state of Piauí, then a problem with [land] expropriations, then a problem with the tendering. So in fact it was five years before we could look each other in the eye and say: “The project is ready. All the problems have been resolved. There is money, there are no environmental issues, no legal problems, nothing at all. Let’s start work”. Once started, the work will take just two years. Five years to solve all the problems, and two years to get the job done.

So this is something I intend to draw up for Brazil’s next government: new regulatory frameworks. At the same time as we want to impose more rigour in the management of public affairs, we need to have ways to facilitate the performance and execution of public works in Brazil, because this is a serious problem for whoever comes to govern Brazil. It’s a very serious problem.

I can give you another example: Belo Monte. Belo Monte is a big hydroelectric dam that will produce 11m megawatts that we are doing. There are engineers who qualified 30 years ago who’ve been trying to work on Belo Monte. For 20 years it was forbidden to carry out the study for Belo Monte, and we now, finally, managed to remove all the obstacles and we’re going to do Belo Monte, putting $5 billion reais extra—and this is what people have to understand—to take care that the dam takes account of environmental preservation, takes account of indigenous communities, of the people who live along the river, the small farmers. And we’re going to try to do a hydroelectric dam that will be an example of how to offer opportunities to people who live in the region, not one that displaces them. So for us, it’s an extraordinary challenge. So I’m happy, because this is something that was attempted for 30 years and that nobody managed to do.

Or take the São Francisco [irrigation] canal. It’s a 642km canal, if I remember correctly, that takes water from the São Francisco to the state of Rio Grande do Norte, the states of Pernambuco, Ceará and Paraíba. There are 12m people living in this semi-arid region. Dom Pedro tried to do this canal in 1847 and didn’t succeed. We spent four years battling with each state, with the community, holding debates and public hearings...finally, this canal is going to happen.

So, it’s difficult to carry out public works in Brazil. Is it difficult to carry out reforms too?

President: It’s also difficult to do public works because of the fact that Brazil had 25 years of doing almost no infrastructure projects. I always say that the last time there was investment in infrastructure was during the Geisel government [from 1974 to 1979], which took on too much debt. Brazil had contracted debts in dollars when interest rates were 3%. Then, to solve the American fiscal deficit, Paul Volcker pushed interest rates to 21%, making Brazil’s debt unpayable—and then we spent the next 20 years trying to solve our debt problem. They were two and a half decades in which Brazil had no capacity to invest in infrastructure. Just to give you an idea, in 1989 we had in Brazil about 50,000 project-engineering businesses. When I took office, there were just 8,000. Universities were no longer turning out engineers. Those engineers that were trained went to work as financial analysts, not as engineers. And we are recovering all this [capability], so that Brazilian industry is reacquiring the ability to carry out the great infrastructure projects that Brazil needs.

So I think these difficulties have been solved, for the most part. The businesses are there. Lots of Brazilian businesses had stopped earning money in Brazil. They made money [elsewhere] in Latin America, they earned money building Miami Airport, building an airport in Tripoli, in Libya, they earned money building hydroelectric dams in Africa, and now they’re doing it in Brazil. It was a process of recovering the productive capacity of this country, which had disappeared.

So you’ve recovered the capacity to do infrastructure projects, albeit slowly. And what about reforms? Four years ago, at the end of your first government, you gave an interview to our correspondent of the day. You said then that your priorities for a second term would be tax reform, political reform and labour reform. These things haven’t happened. Was it because the economy started to grow faster and you, well, you lost interest in them?

President: No...

What happened? Wha’s your reflection on this?

President: The thing is that we live in a presidential system with a parliamentary constitution. Congress has a lot of weight in Brazil, and the president cannot always do when he wants, he does what he can. I took office as president in January 2003 and in April 2003 I sent to Congress my first proposal for tax reform. Some parts were voted on, with respect to federal taxes, and then it came to a standstill. Why? Because each state is interested in its own tax reform, has its own tax policy, and each state has its federal deputies and senators. And no state is interested in reducing its revenue-raising capacity.

When it came to the second term we put together a proposal for tax policy in which we listened to the trade unions, the leaders of the political parties, all the employer groups, who all were in agreement with it. We had the unanimous approval of the Council for Economic and Social Development, which is an advisory council where political issues are debated. We had the agreement of all the state governors. When the minister, Guido Mantega, sent the tax reform to Congress, I imagined that it would be approved fairly quickly. But then I discovered that there are hidden enemies of tax reform. Because people who were in favour here, in our meetings, worked in Congress to ensure that the reforms were not voted on, including governors. Why? Because we wanted to reduce the 27 tax rates of the ICMS [Imposto sobre Circulação de Mercadoriase Prestação de Serviços, the tax on the exchange of goods and services] in the states to two, or three, or five, and no governor wanted this. So the governors who were against started to work in their own interests, which is democratically legitimate and understandable. I am simply showing you the difficulty of carrying out tax reform in a country in which every state government has its own state taxes that it doesn’t want to lose. Nowhere in the world does anyone want to lose a cent of tax. But we did our part.

And it’s important to remember that during this period we did order tax breaks in this country worth more than 100 billion reais. I could have used this money for social policies, but I preferred to cut taxes so that businesses could breathe, produce, generate employment and revive the economy.

Political reform is another thing that I now always say is not the role of the president, even though I sent a proposal for political reform to Congress. We sent it before I was president, we sent it after I was president. Congress didn’t want to vote for it. So now I am making a commitment to myself that once I am no longer president I will start by convincing my own party to make political reform a priority, because I think it’s the main reform that we have to do in Brazil, so that then we can do the others. And then we can convince the other parties that it is extremely important to carry out a political reform, so that we have stronger parties and a stronger Congress, so that whoever sits in this chair can make more substantial agreements with the political parties, the party leaderships. Today, with parties weak, what counts is the individual strength of each citizen, of each region.

I am frustrated that political reform hasn’t been voted on. I think that it’s a mistake of the political parties not to have voted for the political reform that Brazil, and above all the parties, needs so badly. We just have to convince them to change the status quo. Nobody wants to change, people don’t like change. When it comes to change, everyone is conservative, be they on the right wing or on the left. People prefer to stay as they are. Even when you want to take someone out of a tumbledown shack in a favela, they don’t want to leave.

I remember when I lived in Vila Carioca [a neighbourhood in São Paulo] that suffered floods, in 1964, and my mother wanted to move and I didn’t, I wanted to stay right there in the floods. But this is a task of persuasion that we are going to have to do. I have learned a lot and I think that this will allow me, once I am no longer president and have more freedom, to discuss subjects that as president I did not want to discuss, because they were not within my competence.

And what of labour and union reform? It is very difficult to hire a person legally in Brazil. And many Brazilians think that you have the unique moral authority to carry out this sort of reform, to get it accepted by the unions, and you didn’t do it.

President: I did more than that. I gathered together around a table the employers, the workers and the government and said: give me a proposal for labour reform.

Because what is the problem in Brazil? On one side you have the employers, who talk about labour reform and want to abolish all the rights that workers won over time. It’s impossible. On the other side, you have the workers who say that what’s needed is union and labour reform, but want to keep all the rights that are guaranteed under the CLT [Consolidação das Leis do Trabalho, Consolidated Labour Law]. It just isn’t possible. I created a working group for union reform, labour reform and social-security reform. We managed to reform the civil-service pension scheme, but we didn’t manage to reform private-sector pensions, nor the labour issue. Maybe because it’s a process that takes time. Us politicians need to understand that unlike a businessman, who takes a decision in his company and sacks the director whenever he wants, or hires whomever he likes, in politics in a democratic country you have institutions, such as unions and the press, which takes up positions against or in favour. And the role of the president is to balance the [differing] wishes of society.

Look, I, who was a union leader for a long time, think that we are living in the most important moment of harmony between capital and labour, and I think that we are getting prepared to discuss the issue of reforms in the coming years. And I can help, even when I am not president—perhaps I can help more when I am not president—to discuss these subjects with workers and employers. I remember, it seemed impossible for us to make the work of cutting sugarcane more humane. We called in the employers and workers and made a pact here, in the presidential palace, and we are improving working conditions. What did I say to them? If you don’t improve working conditions, ethanol is not going to become an important commodity, because the world will be watching and piling on the pressure. Now we have reduced the number of people working as cane-cutters, it’s important that we manage to create new working conditions for them, and that machines are replacing these workers. This is irreversible, inexorable, over the next ten or 15 years.

To you, what is the priority for the next government?

President: It would be presumptuous of me to make a guess about the priorities of the new government. I think that when the election is over, be it in the first round on October 3rd or in a second round, whoever is elected will starting to discuss the government taking into account the election result. I think that whatever government is elected—and I am convinced that my candidate will win the election—is going to have to continue and improve on the things that are happening in Brazil. What we did in Brazil was no small thing. For sure, there is still much to do because for 500 years one part of the population was neglected. We should never lose sight of the fact that between 1950 and 1980 the Brazilian economy was the fastest-growing in the world, growing on average 7% a year for almost 30 years, and this wealth was not fairly distributed. So there was an abyss between the very rich and the very poor.

We are starting to lay steps so that the poorest begin to rise up to the lower-middle class and then to the middle-middle class. This is the country that I dream the next president is going to build: a country in which the great majority are middle-class, with purchasing power and access to material goods, education and health, better than we have today. Brazil is ready for this, people’s self-esteem has been raised. Public investment has not been all that we wanted, but these are investments that were never made in this country, in all areas. Wherever you go in Brazil you will see work financed by the federal government. We are installing a lot of basic sanitation, this wasn’t done in this country. The problem is that this will only start appearing in the household surveys from 2012, 2013 or 2014, because between starting and finishing the works there is a delay of three, four, five years. So I think we managed to move forward, and that Brazil sees itself differently now. We have started to like ourselves, we no longer have an inferiority-complex.

There are concerns in some parts of Brazilian society, especially about your second administration. The role of the state in the economy has become much more important, in oil, the revival of Telebras and Eletrobras, there are criticisms of the role of the BNDES [National Development Bank]. Do you think the role of the state is appropriate now? Is it too big or still too small? How do you see these criticisms?

President: Look, I think that these criticisms are unfounded. I thank God for having given me the opportunity to spend eight years with the leaders of the world’s principal countries. And there was a period, especially since the 1980s, in which the role of the market was imbued with a certain magic, as if it was a highly automated production line, in which everything went right. When you have a problem, you have to call a maintenance mechanic. Can you imagine that in a robotised production line in the car industry if you put a spoonful of sugar in some valve you stop the whole production line, it’s so fragile although it’s the height of modernity. The market functions marvellously well, and I respect the workings of the market. But the state has two important roles. First, it must be the mobiliser [“indutor”]. If it were not for President Roosevelt, the Tennessee Valley would never have been developed. It means that the state takes the initiative to propose that one place needs more support than another.

Here in Brazil we took the desiscion that the state should induce a development model that tries to make Brazil more equitable. Take culture, for example. The money for culture was almost all for the São Paulo-Rio axis. We had to take a little of that money to Amazonas, Acre, Pernambuco, Paraíba, Rio Grande do Norte. The money for federal-government advertising was all spent in the Rio-São Paulo axis. Then you have to remember that we have small radio stations in all of Brazil, that we have other television channels, and so we need to ensure that this money reaches everyone. This is the role of the state. In other words, the state must govern for the sake of the people who need it the most. There are people who don’t need the state. They have health insurance, they live somewhere paved, with sewage, with treated water. The state needs to guarantee that they don’t lose what they have. But it needs to attend to the part of society that has less. That’s why we chose to induce greater economic development in the north and north-east of the country, so that Brazil should grow—not with one region highly developed and another region falling behind, but to try to balance things so that everybody would live more or less in equal conditions. So these are the roles of the state, to mobilise [private investment], and at the same time to be the regulator.

Ah, how good it would be if the British had regulated their financial system properly! And how good it would be if the United States had regulated its financial system properly and not allowed banks to leverage their capital 35-fold! Who knows, we might not have had the financial crisis of two years ago. The truth is that we went through a period in which governments did not have a role. You are elected and you do what? The market does everything. What did a government do? When the crisis came, it showed something very important: that you need a state has the ability to act and to influence the outcome. And here in Brazil happily we had the BNDES, the Caixa Econômica Federal and the Banco do Brasil [all state banks] because, in the crisis, the private banks retrenched and credit disappeared. We had to arrange credit from Brazil’s public banks. We bought banks that we had to buy.

I’ll give you a little example: at one point the Brazilian car industry suffered a big slowdown. It wasn’t for lack of a market and it wasn’t because of the crisis, it was because of fear. Fear, or possibly orders from headquarters. It stopped dead. If you look at a graph of the Brazilian economy, you’ll see that in November 2008 it fell—it was practically a canyon—and then in February it started to rise again. That means there didn’t have to be that slowdown. It was because of fear.

Well, there was no credit to buy anything. Not even Petrobras, the biggest Brazilian company, had credit. It turned to the Caixa Econômica Federal, the Banco do Brasil and BNDES for money. I even spoke personally with Hu Jintao several times about the need to provide financing for Petrobras. So we realised that in order to stimulate the new-car market, we needed to stimulate the used-car market. I went to the Banco do Brasil and asked its president, “are we in a position to start financing used cars?” He said: “We don’t have the expertise.” And I said: “How long does it take to develop that sort of expertise?” He said: “Oh, some time, president, you need to prepare the bank and train people for that.” Well, I couldn’t wait around, I had a crisis on my hands! What did we do? We took the decision to buy 50% of Banco Votorantim, which had a portfolio of 90 billion reais in used-car financing. And we resolved the problem of expertise at a stroke.

So is the lesson of the crisis is that the state is back to stay, in the mould of the national-developmentalist state of the 1950s and 1960s?

President: No, the lesson of the crisis is that the state must be prepared, that it must have the capacity to intervene when required. Just imagine: if president Bush, in July 2008, had put $60 billion in Lehman Brothers, perhaps it wouldn’t have failed and $1 trillion would not have had to be injected into the financial markets. If the Germans had taken the right attitude, at the right time, to the Greek crisis at the right time, it might not have spread to other countries.

So the state has to be ready to take decisions. I don’t want a proprietorial state, or an interventionist state, but I do want the state to have the capacity to regulate and that people know that the state can do this. People should know that the state is prepared to act, although as long as private enterprise acts, it won’t. But when it’s necessary in order to defend the interests of the people, the state must be ready. And this is how I conceive of the state: it mobilises, oversees, regulates. It does not get involved as a proprietor, but is equipped to carry out works.

I’ll give you an example, of a basic thing about the state. The Brazilian army was always famous for having good engineering battalions that carried out works in the Amazon. When I arrived in government, the Brazilian army didn’t have a single piece of equipment, it was entirely dismantled. I had to rebuild the engineering capability of the Brazilian army, so that when businesses start trying to overcharge or create confusion in tendering, I could deploy the army to do the work. That’s how I see the role of the state.

Because the truth is as follows: private enterprise plays an extraordinary role [but] no private business, anywhere in the world, wants to invest in something that yields a loss. I’ll give you another example: the Electricity For All programme. I discovered that there were 2m houses that were without electricity—these are data from IBGE [Instituto Brasileiro de Geografia e Estatística; the Brazilian Institute of Geography and Statistics]. Two million houses, approaching 10m people. We made it our policy to bring power to these people. No private business was interested in doing it. It’s very expensive. We have already laid 1.1m km of cable without charge because these are the poorest people in Brazil, but just because they are poor doesn’t mean they have to go without power. When power arrives so too do a fridge, a cooker, a sound system, a television, and everything is transformed. By the end of my mandate we will have provided service to more than 93% of them. IBGE says that it’s 98%, but when we went into the countryside we discovered more people. There’s a community living 800km from Manaus, in the middle of the forest. They don’t want to live in Copacabana—it would have been cheaper to bring them to Copacabana, but they want to stay living there. And the Brazilian state must provide the conditions for these Brazilians to continue living there. It costs a lot, but if the state doesn’t do it, no one does.

Brazil is turning into an oil state. And with the new rules for exploring the pré-sal [deep sea, sub-sal] fields, Petrobras will be the sole operator. Aren’t the risk of this being underestimated? We’ve just seen the difficulties in the Gulf of Mexico, in waters much less deep. Your critics are afraid, too, that oil will turn the PT into a sort of PRI, that would use the oil money to stay in power for ever. So there are different kinds of risks there. What is your response?

President: Let me tell you something funny. What happened in the Gulf of Mexico was down to the irresponsibility of the company that was exploring for oil there. I have learnt, here in Brazil, that cheap is expensive. It tried to get oil in the cheapest and quickest way possible, without taking the elementary precautions that it should have. Here in Brazil we are much stricter, and we have learnt from the Gulf of Mexico to be stricter still.

Let me tell you something that for me is very important: Petrobras is going to be the strongest company in the pré-sal. It’s important to remember that oil now belongs to the country, to the state. It doesn’t belong to Petrobras, Petrobras must buy it. What happens at the moment is that a company wins an auction and pays for a concession, and then it pays some royalties and it owns the oil, whether it’s worth $80 a barrel or $200. The company can earn whatever it likes. What are we saying now? The oil is the government’s. It belongs to the Brazilian people, and the Brazilian people are going to sell it. We can sell it as crude oil, or as refined products. For that reason we took the decision to build three big new refineries: Abreu e Lima [in Pernambuco], one in Maranhão, another in Ceará.

But wasn’t the previous model working well?

President: It’s working well for the [oil] companies.

No, for everyone.

President: For the companies. There is no case in the world, not in Norway, in Saudi Arabia, nor anywhere, in which a country that has discovered oil leaves the regulatory model the same as it was before it was certain there was oil. You offer risk-sharing contracts when there is risk. In the case of the pré-sal, we are sure. So there are no risk contracts. We decided to change the regulatory framework. Something fantastic is going to happen. Before this interview appears, we’re going to do the biggest share offering that humanity has ever seen, bigger than the one in China. [Petrobras issued shares worth $67 billion on September 23rd, of which 60% were bought by government bodies.]

See how fate has smiled on me. I, an inveterate socialist when I was a union leader, will be the president who took part in the biggest capitalisation issue that the world has ever known. It wasn’t Bill Gates, it wasn’t Soros, it wasn’t any big businessman, it was a metalworker. When people say that I have am lucky, I say: Yes, I really am. I think that God has had a hand in it...

We’ve been careful not to repeat mistakes. We’ve set up a fund. This money must be used to resolve some of Brazil’s chronic problems, starting with poverty, education, science and technology, culture. We’ve got to take advantage of this money, and not let it go down the drain, with each mayor or each governor spending it however he wants. This money must be controlled, and my idea is that it should be controlled by society, so that we can invest it from Oiapoque [Brazil’s northernmost town] to Chuí [its southernmost] to improve the lives of the Brazilian people. We have a great opportunity, to create a big oil industry, a big shipbuilding industry, to ensure that Brazil definitively joins the list of rich countries. I think that in the coming years we can be the world’s fifth largest economy, and to achieve this we are investing a lot.

Some Brazilians are afraid that if your candidate wins, and wins well, wins a majority in Congress for example, there will be a sort of corporatism, with lots of party militants getting government jobs. You have been very respectful of the framework of democracy, but there are fears that this will be somewhat in question in the coming years. What would you say to these Brazilians?

President: No, no. I can say to Brazilians and to foreigners that this is unthinkable. For all our shortcomings, we have very organised social movements in this country, we have a functioning Congress, a functioning judiciary and we have a woman who, should she be elected, would be committed to democracy no matter what. [Dilma Rousseff is] A woman who was the victim of oppression, was imprisoned for three and a half years, who was barbarously tortured, who doesn’t today hold the slightest trace of resentment.

I am certain that she will respect the principles of democracy as if they were sacred, because she knows that it is because of democracy that I became president and that she is going to be president. Without democracy, I don’t know if we would have got there. We have to have democracy as a fundamental value, and a conquest of Brazilians, that we never want to give up. Dilma is going to surprise the world. It is unthinkable that here in Brazil we’re going to have something like the PRI. Here politics are more democratic, more heterogenous, things are livelier.

Is Dilma more ideological than you?

President: I would say we’re the same. In her youth, in the 70s, she participated in something [a guerrilla movement] that one part of Brazil’s youth did, it was the only path that they had, and I made the other choice, I joined the union movement. The point is that because people opted for democracy, today in Latin America democracy thrives as it does in few parts of the world. Of the people at the São Paulo Forum in 1990, a meeting I called in São Paulo for all the Latin-American left, almost all are in power today, and they got there by democratic means. Even the Frente Farabundo Martí [Farabundo Martí National Liberation Front, in El Salvador], which spent 13 years fighting a civil war [from 1980 to 1992] came to power with Mauricio Funes [elected president in 2009], peacefully and quietly, via the democratic route. And Dilma is just as democratic as I am, just as socialist as I am and just as responsible as I am. Perhaps being a woman I think she can do more, because we need to empower women in politics.

In recent years, Brazil has assumed a more active role in the world. Can Brazil be a power in both the West and the South, or does it have to choose? You have placed a lot of emphasis on South-South co-operation, but isn’t Brazil is a western power too?

President: Brazil, on its own, plays a leading role, because of its size, its territory, its population. What we think is that world governance needs major reform. The permanent members of the Security Council can’t be the outcome of the geopolitics of 60 years ago. The world changed, countries changed, global geopolitics changed, the Cold War ended. We must adapt the Security Council to these new realities. What can explain that a country the size of Brazil is not on the Security Council? Or South Africa or Nigeria or Egypt, to represent the African continent? What can explain that India is not there? Or Japan or Germany? Because China doesn’t want it, or Italy doesn’t want Germany to join? China and India not want Germany to join? Why not have two Latin American countries? If the world was represented in a more balanced way at the United Nations, as permanent members, its decisions would command more respect. In whose interests is it that the UN should be weak? Those who have the power to take unilateral decisions. If a father and mother don’t co-operate in a household, each child feels it has the right to do as it wishes, and no one respects nobody else.

So, for example, I don’t believe in peace in the Middle East, at least as long as the United States is the mentor of peace. I say this because I really used to believe in it a lot. Long before becoming president, in the 1990s, I was with Arafat, with Rabin, which was the best time for making peace. Today we don’t have Rabin, Shimon Peres is not the force he was, and we don’t have Arafat.

So we have a conflict. On one side you have a prime minister in Israel who does what he wants and doesn’t even comply with agreements made with the United States. We have a Palestinian Authority, President Abbas, who has some authority, but Hamas doesn’t obey him and doesn’t want peace in the same way as he does. You have Iran, which has influence with some Palestinians. And you have Syria, which has some influence with part of Hezbollah and of Hamas. You have Qatar, an ally of the United States, but also apparently financing Hamas. All of these people must be at the negotiating table. Even in Israel, not everyone agrees with the prime minister. The way Shimon Peres thinks is not the way the prime minister thinks. Unless you gather everyone around the table with interlocutors who are accepted by all parties, and establish common ground, there will never be peace in the Middle East. I used to be much more hopeful than I am today, but what I see is things moving backwards, not forwards.

I went to Israel recently and said in its parliament: the very UN that created the state of Israel is the same one that should create a Palestinian state, draw the boundaries and establish the laws. It doesn’t happen.

I regret this, I really do. It’s one of the things that I will leave the presidency frustrated by, that these issues are state secrets, not discussed openly, nobody wants to talk about them. We had a meeting in Annapolis [in 2007], we agreed to have a second one in Moscow. We haven’t had that second meeting involving other countries. It seems as if someone has negotiating hegemony. And they each win a Nobel Prize. Each time they talk, they win the Nobel Prize. There’ve awarded around ten Nobel Peace Prizes for the cause of peace in Israel and the Middle East, and peace hasn’t happened. Those people should return their Nobel prizes, since there’s no peace.

Another thing. Let’s take this recent case of Iran. It’s very sui generis. Look, I didn’t know Ahmadinejad. One day there was a UN meeting, and from the UN we went to Pittsburgh, to a G-20 summit, and Ahmadinejad came to my hotel and we talked for two hours. The first thing I asked him was this: Listen here, president, is it true that you don’t believe in the Holocaust? Because then you are the only man on the planet Earth who doesn’t. He said: “No, that’s not what I wanted to say. I was trying to say that around 70m people were killed in the Second World War and only Jews have become the victims.” I said: OK, then say that. That’s different from saying that the Holocaust never happened. Then we got onto the nuclear topic, and he complained of Obama, he complained about Gordon Brown, Tony Blair, Sarkozy. And I said: Have you already talked with any of them? “No.” I went to Pittsburgh: Sarkozy, Gordon Brown and Obama had made harsh statements about Iran.

I went and asked all of them: Have you talked to Ahmadinejad? “No.” Now, how can you outsource politics? Politics can’t be outsourced. Politics is one politician talking to another. When it comes to putting things down on paper, in come the lawyers and the diplomats, but decisions have to be taken eye to eye between two democratically elected people.

I told them, I’m going to go to Iran, I’m going to talk more deeply, and I think that Ahmadinejad is prepared to sit down at the table and reach agreement on the nuclear question. And they began to say that I was naive, that Ahmadinejad was not going to accept, I don’t know how many things, Hillary Clinton called I don’t know how many people. I arrived in Moscow to talk to Medvedev, Comrade [Companheiro] Obama had called Moscow to talk to Medvedev. I arrived in Qatar, Hillary Clinton had called Qatar, all to say that I was naive, that I was credulous, that Ahmadinejad was playing for time, that he wouldn’t negotiate.

In Copenhagen, in December, we had been discussing with Ahmadinejad him freeing that Frenchwoman [Clotilde Reiss, a French student arrested in Tehran airport on July 1st, 2009, and tried for espionage]. My Foreign Minister went to Tehran three times to talk about this. The fact is that Ahmadinejad complied. I arrived at midnight in Tehran, at 5am he put her on the plane. Then we began to talk about negotiations. The following day, at 9am, Ahmadinejad agreed to sign the accord. I said to Ahmadinejad: You know what the other presidents say? That you don’t keep your word. I want you to sign here. The important thing is that the proposal that Ahmadinejad signed with Turkey and Brazil is the one that President Obama sent to us in a letter, 15 days before I travelled. What surprised me was that when Ahmadinejad agreed, the Group of Five, particularly the Vienna Group, decided to punish Ahmadinejad. Perhaps because they felt that Brazil had meddled in a field it shouldn’t have done. But the plain fact is that we got what they wanted and weren’t able to get. So I was a bit frustrated, because politics doesn’t have room for small-minded gestures. A politician who leads a nation, he can say yes, or he can say no. He cannot pretend that something hasn’t happened. We were very tough with Ahmadinejad, we talked a lot about politics, I told him of all the risks we ran if things stalled, and he agreed. And when he agreed, people decided to punish him. I’ve never seen political isolation helping anything.

Others have other interpretations, don’t they?

President: I’m not interpreting, I’m stating hard facts.

The criticism one often hears of Brazil’s foreign policy is that curiously you seem to be closer friends with some authoritarian regimes than with Obama, for example. And Obama is the president of the United States who probably agrees most with your world vision. But in general, it’s that Brazil could be a moral force to defend human rights and democracy around the world. You never criticise Chavez, who is elected, it’s true, but is not governing in a particularly democratic way. You’re a good friend of the Castros and of Ahmadinejad. What do you say to that?

President: By saying that those who are enemies are unable to build peace. On 21st January, 2003, I had been 21 days in office when I went to the inauguration of President Gutiérrez in Ecuador, and there I met Chávez and Fidel Castro. Chavez was in a difficult situation, still experiencing repercussions from the recent coup against him. I proposed to him that we could set up a Group of Friends to solve the problem of democracy in Venezuela. Somebody has to talk.

In politics, you can’t put you feet up and think: “I’m not going to talk to anybody. My adviser’s going to talk to them.” That’s not how to do politics. There was a time when Stalin, Churchill and Roosevelt sat at a table, ordered fine Cognac, a good whisky, and made decisions and solved the world’s problems. Today there are more people, more lead artists and a bigger supporting cast, so there must be more politics, more talking.

When I proposed that the US should join the Group of Friends of Venezuela, Chávez didn’t want it. And Chávez was in New York, we brought them here to Brazil to show him that it was important that not only the US but Spain, with Aznar, which had been the first country to recognise the coup, should be in the Group of Friends. I said to Chávez: “You know why they have to be in it. The Group of Friends must have credibility with your opposition.” Then the Carter Foundation participated and we had an electoral process in Venezuela.

I think democracy is making progress, all over the continent and in Venezuela. I think Raúl Castro has given hints that he wants to do something. Now, they are a very small country and very impoverished. But not even Guantánamo was settled.

Look, I’m going to tell you something: if there was anyone on the planet you was made happy by Obama’s victory, it was me. For me, Obama in the US was the same thing as Lula in Brazil, the same thing as Mandela in South Africa, the same thing as Evo Morales [in Bolivia]. I think Evo Morales’s election was extraordinary. Wow! It was a country governed by someone who didn’t even speak Spanish, he spoke English, and all of a sudden it elected an Indian to be president. You want something more fantastic than that? When the US elected Obama, I said there’s a revolution in the whole world, a black man has been elected. It was fantastic. I’m rooting for Obama every day, to be the best president, to keep going, because it’s a historic example. So I talk to everyone, I’m everyone’s friend. I’ll talk to everyone, I’ll be friends with everyone. I don’t make distinctions based on my personal relationships, I act as a head of state. As head of state I maintains cordial relations with the whole world. I don’t treat anyone in a second-rate way.

Is there a role for the US in Latin America?

President: I think that there is, and the United States needs to discover a role for Latin America.

What should that role be?

President: Because I think that the US often looks at Latin America as it did in the 70s, when it only saw armed struggle. It’s over! I called Obama and told him he needed to invite Mauricio Funes to talk to him. He represents the chance to consolidate democracy in El Salvador.

I think that the US should have a more important role in Latin America, a role as a partner. When all of South America had a meeting in Trinidad and Tobago with Obama, I thought that a new era had begun, but nothing happened afterwards. I proposed to Obama that he should call a meeting at the UN, with the presidents of South America, to ease tensions. Things didn’t happen, because everyone had other things to do. Let’s see if things develop with Dilma.

The role of Brazil in the debate on the issue of climate change is vital. No agreement was reached in Copenhagen. Are you optimistic that a global agreement will be reached quickly, or pessimistic?

President: Brazil took a proposal to Copenhagen, it was the most daring made by any country, proposing to reduce greenhouse-gas emissions by between 36% and 39.1%. We made a commitment to reduce deforestation in the Amazon by 80% by 2020, and we are, year by year. Between last year and this year there was 48% less deforestation.

We have the world’s cleanest energy matrix, that most sequesters carbon, and I don’t know why the rich countries, who talk so much about climate change, do nothing to change anything. Why was it that in Copenhagen the US put forward a proposal to cut emissions by just 4%? Europe could have offered 30% and offered only 20%. And everyone is starting to talk of money, as if poor countries were beggars who, if they were to receive just a little aid in dollars, could reduce their growth. We don’t accept this. What’s at issue is the planet Earth, and we all live on it. We need to talk seriously.

Well, we tried. I held meetings until 4am, something I hadn’t done since my union days. At one point I called China, India and South Africa and said: let’s take a decision here. There’s not going to be an agreement. And then Obama agreed to talk to us. The G-77 also didn’t reach agreement. We didn’t accept that China should be held as responsible as the rich countries. China is a heavily polluting country and they know it and we know it. But the greenhouse gases up there go back to historic times. So the payment can’t be equal. What we wanted was to reach a more serious agreement. We’re working really hard for Cancún. We’ll bring a proposal and challenge other countries to present their proposals. We want to discuss with them [the United States] introducing ethanol in petrol, or cutting the use of fossil fuel. We are discussing with them the introduction of biodiesel, which could be a way of helping Africa to develop, or Central America, which has a preferential trade agreement with the US, could export sugarcane ethanol to the US. What I think is that people are dragging their feet because they are scared of their own parliaments. Here Congress has already given approval. The law that we passed is no longer President Lula’s, nor will it be President Dilma’s, it’s a law of Brazil. The House and Senate have already voted on it. So whoever comes into government is going to have to comply with this law. I want that to happen in Europe, Japan and the US. It’s not good enough for Obama to say to me: “The Republicans don’t want it”. Here too, my opponents don’t want it.

It is true that in Copenhagen you made space for Obama at the table?

President: No, it was he who asked to sit there. He said: “I want to sit beside my friend Lula.” I really like Obama, I root for him, I want him to be successful. He’s very young and a very new thing. I really believe in new things.

What are you going to do from January 2nd onwards?

President: Quite honestly, I haven’t given much thought to that. I’m afraid of making a decision too hastily, and after two months discovering that it wasn’t what I wanted to do. An ex-president should go some nice quiet little place, not be second-guessing national politics, letting whoever was elected govern the country, make mistakes and get things right but let them govern the country, and after a time think about what to do with his life. I’m a politician, and I’ll continue to be politically active.

In Brazil or abroad?

President: In Brazil, I think. I would like to make a contribution in Latin America and in Africa, with this government’s successful experiences of social policy. We have done some really important things, especially on social inclusion, the participation of organised sectors of society. We have accumulated a lot of experience and I would like to share it with Africa, and with Central and Latin America.

These things also depend on whether other people want them. Felipe González [a former Spanish prime minister] told me something that is true: that an ex-president is like nothing so much as a Chinese vase. Displayed in your office, it’s very beautiful. But if it doesn’t fit in your apartment when you go home, it’s worthless. What is an ex-president for? He can be a nuisance. I want to be very careful not to interfere in any way in anything with anything president Dilma wants to do.

Will you run again some day?

President: I can’t say yes, because when the next election comes, I’ll be 68 years old.

Only 68

President: At 68, the years weigh on you. If I get Dilma elected and she is good, she’ll have to be a candidate for re-election. There’s no sense, if she’s good, in saying: No, it’s not going to be you, I’m coming back. If she’s good, she has the right to be the presidential candidate again, and I’ll work for her election. So I don’t want to make any forecasts. When you’re over 60 every year weighs more heavily than when you’re 18. I’m conscious that there isn’t much time left. I want to live quietly, in peace and with a good conscience.

Is there anything in these eight years that you regret not having done differently?

President: For sure, at night, when I am no longer president, I’ll think of many things that I should have done and didn’t do. But I’ll also remember important things that I did do. For example, I’m the first president in the history of Brazil without a university degree, and I’m also the president who created the most universities. I created the most technical schools. In a century, the Brazilian elite set up 140 technical schools; in eight years, I set up 214 technical schools, 14 new public universities and 118 additional university facilities [extensões universitárias]. I brought a university to each of the cities in the country’s interior. We created the ProUni, which 704,000 students are attending. We created the Reuni [Reestruturação e Expansão das Universidades Federais; the Restructuring and Expansion of the Public Universities], which doubled the number of places for students. There had been 113,000 places a year; this year there were 250,000. We made extraordinary investments in science and technology. Brazil has overtaken Holland and Russia in the publication of articles in scientific journals. For sure, whoever comes after me is going to have to do a lot more, because we need to catch up. That’s why we’ve put the oil money in an education fund. This country was the last in South America to have a university. Peru had a university 300 years before us.

I think the country is ready, that we are aware and mature. In a year’s time, when I am no longer president, come here and we’ll do an interview and I will tell you what I regretted not doing, and what I did that I regretted having done.

But you can be sure of one thing: I’m leaving. When I was elected president, I thought a lot about Lech Walesa, because he was synonymous with failure. He had no political party, he led the strikes against communism, and he rode that wave to the presidency. Four years later he was a candidate for re-election, and he got 0.6% of the vote. An absolute and utter failure. And I’m going to end my second term with more than 80% approval. I think that matters.

And why was I afraid of making a mistake? Because I was aware that if I did, it would take another 200 years for a worker to say he wanted to be president of the Republic again. So I had to prove every hour of every day that I was competent to govern the country. And I think we are reaping what we sowed. Brazil’s international relations have improved a lot. I visited Africa more than all the presidents in Brazil’s history, I visited every country in South and Central America, I went to the Middle East more than all the presidents of Brazil. I diversified Brazil’s relations, without losing our relationships with the United States, Europe or Japan. Certainly others will come and do much more, and I ask God that they do ever more.

Now, before ending my term, if I could give one piece of advice to the world’s presidents, it would be: “don’t outsource politics.” Politics can’t be outsourced. Whoever was elected must do the politics. If he sends a proxy in his place, it won’t work.

Any advice for the next president of Brazil?

President: Do politics from the heart, take care of the poorest, and practice democracy to its uttermost ends.