BRASILIA (Reuters) – President Luiz Inacio Lula da Silva launched a $878 billion programme to upgrade Brazil’s infrastructure yesterday, setting out a major campaign banner for his chosen candidate in October elections.
Days before Lula’s chief of staff, Dilma Rousseff, must step down to be able to campaign for president, the government said the programme would spend 1.59 trillion reais ($878 billion) on infrastructure in the coming years, with 959 billion reais ($530 billion) earmarked for between 2011 and 2014.
Rousseff said the programme would improve the lives of millions of Brazilians and reduce inequality by improving access to clean water, medical posts and energy as well as modernising the country’s air, road and rail system.
“We crossed the desert of stagnation and Brazil has resumed the path of development,” Rousseff said in a speech in the capital Brasilia to launch the new package, her last major public event before leaving office. “But Lula’s government, our government … does not accept a path that doesn’t have development with redistribution of income.”
The hugely popular Lula, who cannot run for a third term, has anointed Rousseff the “Mother of the PAC,” the acronym of the flagship infrastructure program, making clear he sees it as a key campaign strength for her.
The former union leader sought to allay concerns that the package signals a loosening of government spending discipline in an election year even as figures show inflation expectations rising sharply in recent months.
“We will do all this without losing sight of the need to take care with fiscal responsibility and inflation,” he said. “An election year is time for us to think of the next generation.”
Rousseff is expected to tout the massive investments to voters as evidence that Lula’s center-left government is rapidly improving the pot-holed roads, clogged ports and underfunded health system that dog Latin America’s biggest economy despite strong growth in recent years.
The centrist opposition, whose presidential candidate is expected to be Sao Paulo state Governor Jose Serra, has criticized the programme as propaganda, pointing to lengthy delays in projects in its first phase, which began in 2007 and totaled about $300 billion in investments.
