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UNCLAS SECTION 01 OF 04 SAO PAULO 001069 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/BSC; WHA/PD 
STATE PASS USTR FOR SULLIVAN/LEZNY 
NSC FOR FEARS 
SOUTHCOM ALSO FOR POLAD 
 
TAGS: PGOV PREL ECON ETRD KPLS BR
SUBJECT: ALCKMIN AS PRESIDENT: THE END OF IDEOLOGY 

REFS: (A) Brasilia 2100; 
(B) Sao Paulo 810 SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 

¶1. (SBU) SUMMARY. In a friendly and candid discussion with the Ambassador, Joao Carlos Meirelles, a long-term advisor and the current campaign manager for PSDB presidential hopeful Geraldo Alckmin (Ref B), outlined the likely policies of an Alckmin government, as well as the strategy that the campaign will employ in the run-up to the October 29 runoff against President Lula (Ref A). Meirelles stressed that an Alckmin administration would shed the ideology that has driven Lula's foreign and trade policies. Instead, Alckmin would focus on Brazil's core national interests, which including regional integration and development through partnerships with the United States and other countries in the hemisphere. He highlighted the importance of pursuing projects such as biofuel technologies, enhancing trade by restarting multilateral and bilateral negotiations, and assuming a more pragmatic leadership role in the region. Meirelles suggested that Alckmin would distance himself from Hugo Chavez by treating Venezuela as any other neighboring country while taking a stronger stand against Bolivia's Evo Morales. Meirelles maintained that Alckmin can beat Lula in a face-to-face runoff because voters will be able to focus squarely on the stark differences between the two candidates. In contrast to Lula's desire to focus the campaign debate on comparisons with past presidents, particularly former President Fernando Henrique Cardoso, Alckmin intends to concentrate on concrete proposals while stressing his own proven managerial skills as former governor of Brazil's largest and most prosperous state. Meirelles said the campaign will engage nationwide, and not focus on any particular region. He opined that Lula and his PT party were stunned that Alckmin forced a run-off, and added that Lula's recent recruitment of Cabinet members into the campaign suggests signs of desperation. END SUMMARY. 

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FOREIGN POLICY DIFFERENCES: LIKE OIL AND WATER 


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¶2. (SBU) Joao Carlos Meirelles, the campaign manager for Brazil's presidential challenger Geraldo Alckmin (Ref B), outlined for the Ambassador and Consul General the strategies that the campaign will employ during the next three weeks to carry Alckmin to victory in the October 29th run-off election (Ref A). He also discussed the likely policy positions of an Alckmin presidential administration. When asked by the Ambassador how the foreign policy of Alckmin -- if he were to win -- would compare to that of President Lula, Meirelles immediately quipped, "Like oil and water." Meirelles said that Alckmin would "pursue real national interests, not ideology," touching on a common complaint that, under direction of the Brazilian Foreign Ministry ("Itamaraty") under the Lula Administration, foreign relations and trade negotiations are often driven more by ideology than policy considerations. 

¶3. (SBU) Meirelles indicated that Alckmin is very aware of Brazil's role as one of the world's major exporters; he referred to export promotion and enhanced trading opportunities as top priorities several times. In that context, he said that Alckmin's central thrust in foreign policy would be to look toward integration and development by working with the United States and other countries in the hemisphere. For example, an Alckmin administration would strive to consolidate the economic benefits of MERCOSUR, but his camp views the trading bloc as important but secondary to their broader hemispheric policy approach. Recognizing that multilateral discussions take time, Meirelles said Alckmin is also interested in reaching bilateral accords with key developed countries. 

¶4. (SBU) Regarding the Free Trade Area of the Americas (FTAA), Meirelles sounded a positive note, saying that Alckmin wanted to boost trade by whatever means possible. (Note: Earlier in the week the Ambassador met with Rubens Barbosa, the former Brazilian Ambassador to the United States and current private consultant and one of several foreign policy advisors for Alckmin's Brazilian Social Democratic Party (PSDB). As one of several voices in the PSDB on the issue of free trade, Barbosa essentially said that the FTAA, under its current guise, will never be taken up by any 

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Brazilian government. Barbosa even suggested that the name itself is a problem, although he conceded that a dual track formula such as the one that was agreed to at the Miami FTAA Ministerial meeting would be acceptable. For his part, Meirelles said that Alckmin realizes Brazil's need to open new markets, "whatever the vehicle." End Note.) Meirelles noted that Lula's penchant for pursuing trade deals with developing countries like South Africa and Mozambique offer little in terms of markets for Brazilian products, and that enhancing trade with large markets like the United States is a necessity. 

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IT'S ALL ABOUT RESULTS, NOT IDEOLOGY 

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¶5. (SBU) Meirelles also signaled that an Alckmin presidency would seek stronger ties between Brazil and United States, particularly in regard to regional integration and development. He said the U.S. and Brazil share the same goals in regard to stabilizing and assisting underdeveloped nations, and that we should be able to work together as partners toward this goal in the hemisphere. He said, for example, that Alckmin would continue Brazil's involvement in the U.N. Mission to Haiti (contrary to the view voiced by Barbosa to the Ambassador earlier in the week). He was also very receptive to a suggestion by the Ambassador that our two countries could use the expansion of biofuel markets as a development tool in the Caribbean, and in Africa. 

¶6. (SBU) Meirelles said that Alckmin would like Brazil to take a more "natural" leadership role in the region; one that is strategic and pragmatic, but not ideological like the Lula government. In regard to Venezuela, he noted that Alckmin recognizes that Brazil must deal with Hugo Chavez because Venezuela is an important neighbor, and that many major Brazilian firms do business in Caracas. According to Meirelles, however, Alckmin would treat Hugo Chavez as nothing more than the leader of a neighboring country. Meirelles said it was "foolish" for Lula to have allowed Chavez to elevate himself to a central role in South America, or to use him as a proxy in order to antagonize the United States. Bolivia, on the other had, presents a more serious problem. Meirelles said that Lula's handling of the nationalization of Bolivian petroleum facilities was "ridiculous," and that Alckmin would take a much stronger approach to the situation, which has serious implications for Brazilian national interests. 

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FIRST THINGS FIRST: TRYING TO ORCHESTRATE VICTORY --------------------------------------------- ---- 

¶7. (SBU) Meirelles, an Alckmin insider for many years who served as state Secretary of Science, Technology and Economic Development and as Secretary of Agriculture during Alckmin's tenure as Sao Paulo state governor, displayed a quiet confidence in his candidate's chances of winning the second-round of elections. He maintained that "Lula lost" in the October 1 first-round, leaving a stunned Lula with "nothing to say" to explain Alckmin's surprising showing at almost 42 percent of the votes cast. Meirelles said that while Lula is not desperate yet, his campaign is clearly showing signs of stress, as reflected in the decision to recruit 17 Cabinet ministers into campaign duties. According to Meirelles, the post-election partisan statements of Finance Minister Mantega disparaging Alckmin, statements given from his government office and during work hours, violated election rules. 

¶8. (SBU) Meirelles also said that voters will now have the chance to really get to know Alckmin, and they will see a stark difference between his vision for the future and Lula's fixation with the record of past presidents, particularly Fernando Henrique Cardoso. Meirelles repeatedly said that of the two candidates, only Alckmin offers "concrete proposals" to address Brazil's ills and move the country forward. He said Alckmin will hammer home the message that it is impossible for Brazil to adequately grow without significant improvements to the country's infrastructure and education system, which must incorporate technological innovation. According to Meirelles, voters will come to see that Alckmin has the better 

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"capacity to manage" based on his years as Governor of a state with a larger population and greater GDP than Argentina. But, Meirelles admitted that Lula can capitalize on the name recognition that comes with incumbency and the fact that this will be his seventh time on the presidential ballot. Meirelles also admitted that "people don't know Alckmin yet," but offerred that "when they get to know him, they prefer him to Lula." 

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ALCKMIN'S NATIONAL -- NOT REGIONAL -- STRATEGY 

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¶9. (SBU) When asked how the campaign plans to approach the run-off, Meirelles said that, contrary to popular pundit speculation, Alckmin will not focus attention on certain regions of Brazil, but rather, will "legitimize" his position in every state and work through state party campaigns to improve his overall standing. According to Meirelles, the campaign will address the "political reality" in each state, and to that end, has identified states according to three categories: 1) states in which Alckmin's Social Democratic Party of Brazil (PSDB) was the clear winner in the first-round of balloting (he said there are 17 such states); 2) states in which both the PSDB and Lula's Worker's Party (PT) made equally strong showings; and 3) states which fielded weak or no PSDB candidates. 

¶10. (SBU) Meirelles stressed that there is a significant difference between first and second round voting, because in the first-round people tend to focus on state-level candidates, and in some instances, do not even know the candidates for federal office. The second-round will afford Alckmin time to improve his name-recognition and compare himself against Lula, and he will be able to take advantage of alliances with other parties, such as the People's Democratic Movement of Brazil (PMDB), where he may be able to fill a void for voters in areas where the PMDB lost seats in the first-round. Meirelles shirked off the unsolicited endorsement Alckmin received from controversial former governor of Rio de Janeiro state Anthony Garatinho (PMDB), which led two other prominent politicians -- and dedicated rivals to Garatinho - to first declare that they intended to cast nullified ballots for president, and then reverse themselves and publicly state they will support Alckmin. Rather than detracting from Alckmin's momentum, Meirelles insisted that this sort of rough-and-tumble politics in Rio is par for the course for a state that is notorious for its fickle and mercurial electorate and thus should not be taken too seriously. Besides, he said, knowing that loyalties were destined to split among Rio's political elite, Alckmin did well by obtaining Garotinho's early backing, because his political supporters are the working class and poor who live in three different zones of Rio, giving Alckmin a better chance of expanding his base of support across the city and state many consider important in order to gain a victory. "I am absolutely sure we will have very good performance in Rio," said Meirelles. 

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AVOIDING NEGATIVE CAMPAIGNING 

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¶11. (SBU) Meirelles went out of his way to stress that Alckmin will focus his campaign message on the future, and on promoting his "concrete proposals." He will not, said Meirelles, focus on the corruption scandals associated with Lula's PT party. But he will highlight specific failures of the Lula Administration, such as the poor state of the country's infrastructure, in order to make a point of comparison with his own record as governor of Sao Paulo. Meirelles was also quick to point out that while Alckmin will not bring up ethics as a way to discredit Lula, if Lula's campaign challenges Alckmin's ethics or raises charges of corruption, Alckmin will, of course, bring up the myriad PT scandals. This, he said, will be Alckmin's strategy in the October 8 televised debate as well. Alckmin will outline specific proposals for Brazil's future on which he promises to deliver based on his past experience. For example, voters will learn, said Meirelles, that Alckmin as vice governor and later governor inherited a large budget deficit but led Sao Paulo state to a record of 11 straight years of budget surpluses 

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that allowed for major investments in highways and other infrastructure projects. 

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BUT HOW DOES HE WARM UP TO THE VOTERS? 

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¶12. (SBU) COMMENT: Despite Alckmin's dramatic comeback from a 30 point deficit in the pre-election polls, he still faces a steep slope in the October 29 runoff against Lula. He suffers from a lack of name recognition outside of the south and southeastern states (in contrast to Lula whose name has been on the presidential ballot seven times), a lack of charisma, and the public perception of a policy wonk among voters who do know him. Meirelles himself unwittingly played into that image during our conversation, by repeatedly referring to Alckmin as "solid," and having "concrete ideas," and being a "manager." And even though Alckmin carries the momentum going into the October 8 televised debate, the election is still Lula's to lose. But, Meirelles may be right that in the coming three weeks, enough people will get to know, and to like, Geraldo Alckmin's bland but solid style of leadership. Meirelles' characterization of Alckmin is reminiscent of a comparison made between him and Lula, as passed down from a prominent businessman: When you meet Lula for the first time, he will charm you in five minutes, but when you meet Alckmin, he will persuade you in thirty. The question is whether Alckmin has the time to persuade enough Brazilians to carry him to victory on October 29. END COMMENT. 

¶13. (U) This cable was coordinated with Embassy Brasilia and cleared by Ambassador Sobel. 

MCMULLEN