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
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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