Pensions take precedence for Lula

By Jan Rocha
in Sao Paulo

President Lula plans to personally lead pension reform talks

President Luiz Inacio da Silva has cancelled a six-day trip to Africa to personally command negotiations on a controversial pension reform bill which is due to be voted in Congress this week.

The Brazilian President was due to visit Mozambique, Angola, Sao Tome and Principe, Namibia and South Africa this week.

The vote is expected to take place on Wednesday but there is speculation that it could be brought forward to Tuesday.

President Lula decided this was just too delicate a time to make the African trip.

The first vote on the complex and controversial pensions reform bill is due to take place in Congress on Wednesday.

Political test

It will be the first big test of the government's capacity to push through important legislation.

Lobbying by groups who fear the new bill will reduce their present pension rights - like judges and civil servants - has been intense.

But, the fiercest opposition comes from many of the sectors who voted for President Lula such as trade unions, who want to maintain existing pension rights and are planning a mass protest march in the capital, Brasilia, for the day of the vote.

In addition, the climate is tense in Brazil because in many parts of the country thousands of people belonging to social movements - which demand land reform and popular housing - have occupied large estates in rural areas and empty plots and buildings in cities.

To add to the President's troubles, rumours that the finance minister was about to resign led to a run on the dollar and a rise in Brazil's risk assessment, before the government categorically denied it.