# First presidency of Lula da Silva

* This article is part of a series about Luiz Inácio Lula da Silva
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35th President of Brazil
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Second
Social and Economic policy
Zero Hunger
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39th President of Brazil
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2023 Brazilian Congress attack
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Mensalão
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The fist tenure of Luiz Inácio Lula da Silva as the president of Brazil began on 1 January 2003 when Lula was inaugurated as the 35th president, and ended on 1 January 2011. A Workers' Party candidate, it was his fourth candidacy for this office and after defeating the PSDB candidate, José Serra, with 61.27% of the valid votes in a second round. Lula was the first former worker to become president of Brazil, and he governed the country for two consecutive terms (2003 until 2007 , and from 2007 until 2011). In October 2006, Lula was reelected to the presidency, defeating the PSDB candidate Geraldo Alckmin in the second round, obtaining more than 60% of the valid votes against 39.17% for his opponent. His term in office ended on 1 January 2011. Lula's government ended with record approval from the population, with more than 80% positive ratings.
Its main hallmarks were the maintenance of economic stability, the resumption of the country's growth, and the reduction of poverty and social inequality. His first presidency registered the highest average GDP growth in two decades, around 4.1%, and total growth was 32.62%. Per capita income grew 23.05%, with an average of 2.8%. The growth was driven by the rise in commodity prices, domestic demand, helped by programs like Bolsa Família and the reduction in international interest rates. Despite economic growth, productivity has not increased along with it. Lula took office with inflation at 12.53% and delivered at 5.90%.
One of Lula's campaign platforms was the need for constitutional reforms. A relevant reform that took place during Lula's government was the approval of Constitutional Amendment 45, in 2004, which became known as the "Judiciary Reform".
His first presidency was also notable for the country's quest to host major sporting events. The 2007 Pan-American Games took place during his mandate. So did the choice of Brazil to host the 2014 FIFA World Cup and the 2016 Olympic Games. The decisions generated controversy about the losses and legacies of each event.
In 2009, the penultimate year of the Lula administration, an annual study conducted by the NGO Transparency International reported that Brazil ranked 75th in a ranking of 180 countries on perceived corruption. The study gave Brazil a score of 3.7, which indicates corruption problems, according to the entity. Brazil got worse in the ranking between 2002 (score 4.0, 45th in the ranking) and 2009 (score 3.7, 75th in the ranking), having dropped 30 places. In 2008, the The Economist's Democracy Index ranked Brazil the 41st most democratic country in the world.

## Manifesto

Still during the election campaign, Lula wrote the Letter to the Brazilian people where he assured that in case of his victory his party, the Workers', would respect national and international contracts. The letter was read on 22 June 2002 during a meeting about the party's government programme.

## Inaugurations

Luiz Inácio Lula da Silva took office on 1 January 2003, having been elected president in 2002. He was the second Brazilian president to take office on this date, the third president elected since the end of the military dictatorship, and the first socialist-oriented former worker to assume the Presidency of Brazil.
Lula's second inauguration took place on 1 January 2007. He was sworn in again with the vice-president, José Alencar. The ceremony began shortly after 4pm in the plenary of the National Congress in Brasilia and was presided over by then Senate President Renan Calheiros. As in the inauguration of the first mandate, the reelected president and vice-president read and signed the term of office, and then the national anthem was played by the Marine Band.

## Internal policy
### Economy

Lula was elected in a difficult economic context, and his administration began by following the economic policy of the previous government, FHC. To this end, he nominated Henrique Meirelles, a federal deputy elected by the PSDB of Goiás in 2002, to head the Brazilian Central Bank, sending a strong signal to the market – especially the international market, where Meirelles is well known for having been the president of Bank Boston – that there would be no abrupt changes in the conduct of economic policy in his government. He appointed Antônio Palocci, a sanitarian physician and former mayor of Ribeirão Preto, a member of the Workers' Party, as Minister of Finance. After repeated accusations against Palocci by the media, in the case known as "Scandal of the breach of the bank secrecy of Francenildo, the bank teller" [pt], Palocci resigned (on 27 August 2009, the STF dismissed the accusation against Palocci). His replacement was the economist and university professor Guido Mantega, who took over the ministry on 27 March 2006.
The Lula administration was characterized by low inflation, which was under control, reduction in unemployment and constant records in the balance of trade. During President Lula's administration there was a record production in the automobile industry in 2005, the largest real growth in the minimum wage and reduction of the Gini coefficient.
In 2010, Alan Mulally, Ford's global president, stated that thanks to the incentive programmes of Lula's government, it was possible for the country to effectively come out of the world crisis. During the crisis the GDP retraction was only 0.2%, showing a better result than the major economies of the world.
The economic growth was driven by the commodities boom, the reduction in international interest rates, and the increase in domestic consumption, supported by the increase in the minimum wage and income transfer programmes such as Bolsa Família.

## Foreign affairs

In 1979, Lula was asked in an interview which historical figures he admired most. He answered: Gandhi, Che Guevara, and Mao Zedong. Upon being asked to give additional examples, he added Hitler, Castro, and Ayatollah Khomeini, saying: "I admire in a man the fire to want to do something, and then his going out to try to do it".
Leading a large agricultural state, Lula generally opposed and criticized farm subsidies, and this position has been seen as one of the reasons for the walkout of developing nations and subsequent collapse of the Cancún World Trade Organization talks in 2003 over G8 agricultural subsidies. Brazil played a role in negotiations regarding internal conflicts in Venezuela and Colombia, and made efforts to strengthen Mercosur. During the Lula administration, Brazilian foreign trade increased dramatically, changing from deficits to several surpluses after 2003. In 2004, the surplus was US$29 billion, due to a substantial increase in global demand for commodities. Brazil also provided UN peace-keeping troops and led a peace-keeping mission in Haiti.
In 2005, Lula was the subject when the Brazilian electrician, Jean Charles de Menezes, aged 27 was shot dead by police onboard a tube in Stockwell tube station, a day after the failed 21 July 2005 London bombings.
According to The Economist of 2 March 2006, Lula had a pragmatic foreign policy, seeing himself as a negotiator, not an ideologue, a leader adept at reconciling opposites. As a result, he befriended both Venezuelan president Hugo Chávez and U.S. President George W. Bush. Former Finance Minister, and current advisor, Delfim Netto, said: "Lula is the ultimate pragmatist".
He travelled to more than 80 countries during his presidency. A goal of Lula's foreign policy was for the country to gain a seat as a permanent member of the United Nations Security Council. In this he was unsuccessful.

### Cuba

Lula and Cuban president Fidel Castro were longtime friends. Under Lula, Brazil provided money and corporate support to Cuba. The state-controlled Brazilian oil company Petrobras studied the possibility of drilling for oil off of Cuba, while the Odebrecht construction firm headed a revamp of the Cuban port of Mariel into the island's main commercial port. Brazil's state-run Brazilian Development Bank gave $300 million to Odebrecht to build new roads, rail lines, wharves, and warehouses at Mariel. Brazil also offered Cuba up to $1 billion in credit lines to pay for Brazilian goods and services.

### Iran

In 2009, Lula warmly hosted Iranian president Ahmadinejad, who made a controversial visit to Iran. Some demonstrators expressed displeasure over Ahmadinejad's positions on human rights and his denial of the Holocaust.
In May 2010, Lula and Turkey's prime minister Recep Tayyip Erdoğan negotiated a preliminary fuel swap agreement with the Iranian government on uranium enrichment, that ultimately failed. The preliminary agreement that they presented to the United Nations was at odds with what the International Atomic Energy Agency and other countries viewed as necessary actions to stop Iran from obtaining weapons grade materials. And within hours of signing the agreement, Iran did an about-face and announced that it would continue to enrich some uranium. The UN Security Council ultimately rejected it when permanent member country representatives argued that "the swap proposal negotiated by Brazil and Turkey would leave Iran with enough material to make a nuclear weapon", and that “Iran intends to continue a new programme of enriching uranium to a higher level". Moisés Naím, editor in chief of Foreign Policy magazine and former Minister of Trade in Venezuela, said "Lula is a political giant, but morally he has been a deep disappointment". In 2010, in addition, Brazilians largely disagreed with Lula as to how to handle Iran and Iran's nuclear weapons programme. While Lula opposed additional international economic sanctions against Iran, of the 85% of Brazilians who opposed Iran acquiring nuclear weapons, two-thirds approved of tighter international sanctions on Iran to try to prevent it from developing nuclear weapons.