Among Latin leftists, Brazil's moderate Lula leads the way

On a recent day, Venezuelan President Hugo Chávez and Brazilian President Luiz Inacio Lula da Silva met in this Amazonian city, signed seven cooperation agreements ranging from energy to housing, and then lunched with Ecuadorian President Rafael Correa and Bolivian President Evo Morales.

The four leftists, as usual, were not quiet in their condemnation of the US – this time for the financial crisis wreaking havoc worldwide.

But while Lula, a former union firebrand, effortlessly bands together with Latin America's left, he just as easily peels away, overseeing a market orthodoxy at home that pleases Washington, defies categorization, and has propelled him forward as the true, if understated, leader of Latin America's underclass today.

"Lula seems to have hit upon a pragmatic approach, using fiscal responsibility as his way to deal with poverty in Latin America, and the results are there," says Thomas Trebat, the executive director of the Institute of Latin American Studies at Columbia University.

In Brazil's northeast, where Lula was born, the president enjoys near cult status. The residents in this scruffy desert land identify with his life story: Out of poverty, his family was forced to migrate to the country's largest city, São Paulo. There, he began working as a young boy selling peanuts and shining shoes. He eventually got a job in a factory and climbed up union ranks. He became a founding member of the Workers Party, and rose, improbably, to the presidency in 2002.

"Lula was lacking, he is from here, he understands our needs," says Luciano Vieira, an activist from Manari, a town west of where Lula was born and even more isolated. Many say that the boom Manari is experiencing – like so many other towns in the northeast – could not have happened without a president who put the poor first. "Manari is an example of the success in the rest of the country. With another president this never would have happened."

Lula's popularity across these arid plains is not unlike the fame that Mr. Chávez, who has poured billions into social programs for the poor, has in the marginalized pockets of Venezuela. But there is a key difference: While Venezuela has become even more polarized under Chávez's administration, Lula and his booming economy please more than just the poor. His popularity hit 80 percent recently.

And many say that his method of addressing poverty – not just handing out money, but helping the poor through conditional responsibility – is the right equation. "Brazil stands alone in the region for its very aggressive social policies towards reducing inequality," says Eduardo Moron, an economist in Peru who recently joined Peru's Ministry of Economy and Finance. "I'm not sure anyone else has been so emphatic about it."

Chávez and Lula, while allies on a host of issues, have taken different paths. Since becoming Venezuela's president in 1999, Chávez has nationalized key industries. Lula, on the other hand, surprised everyone by maintaining a market-oriented model that was forged by his predecessor.

Chávez has lavished oil money on allies in an effort to build political support and undercut US influence. Lula's role on the international stage has been decidedly more diplomatic: He has become a leading voice in World Trade Organization talks fighting agricultural subsidies on behalf of developing nations, for example. And crucially, Lula maintains close ties with President Bush, and is seen by some as the interlocutor for the region and more specifically between the US and Chávez. He effortlessly remains friends with both.

Chávez and Lula cooperate and share jokes in public, but when it comes to real clout in Latin America, it's Lula who seems to hold the trump card these days. He has played important mediator roles in the region's most recent crises, including civil strife in Mr. Morales's Bolivia.

Still, his power is muted, in large part because he does not flaunt it.

The moderate left in Latin America, says Mr. Trebat, has allowed the "bully pulpit" to be dominated by Chávez. "The Brazilians are reluctant to toot their own horn, and show the world their way of doing things," he says.

It might be a Brazilian characteristic, says Trebat. It is also perhaps specific to Lula, a natural negotiator.

Or, as Melissa Andrade at the United Nations Development Program's International Poverty Center says, it might be that Brazil's role as a key leader in the developing world has even taken it's government by surprise. "Brazil has always been a recipient," she says. "Now it's realizing it can have a voice."