Brazil may seem distant, but with Russia and most of Asia in deep financial trouble the largest economy in Latin America -- which accounts for 20 percent of U.S. exports -- takes on new importance. The current regime has faithfully followed the dictates of the IMF, and opposition forces have made that the central issue of the campaign. PNS correspondent Roger Burbach, founder and director of the Center for the Study of the Americas, is the co-author of several books on Central America.

Lula, the scrappy leader of Brazil's Workers Party, is running for president again. This time he is taking on globalization and the International Monetary Fund as well as the incumbent.

Although most polls show that president Fernando Henrique Cardoso has a commanding lead, Lula and other opposition forces could deny him a majority in the October 4 elections. That would mean a runoff between Lula and Cardoso on October 25 -- a possibility that has created considerable anxiety.

The anxiety stems from the very fragile state of Brazil's economy, by far the largest in Latin America. The stock market has fluctuated wildly and is down over 40 percent this year, and interest rates have gone to 40 and even 50 percent in attempts to protect the country's currency.

Lula lays the blame for the country's troubles squarely on Cardoso. "He is irresponsible and subservient to international interests. The people are paying dearly for his policies."

Lula has focused on jobs -- official unemployment stands at about 8 percent, though independent surveys suggest 18 percent. On campaign stops, Lula asks "why is it we can buy anywhere in Brazil items like lighters made in China or elsewhere? We can produce these just as cheaply. There should be a global opening, but we don't need to turn Brazil into a free trade zone."

Cardoso is trying to convince voters that Lula's policies will throw the country into chaos and cause a resurgence of monthly double digit inflation

Virtually all the country's newspapers and TV networks openly support the incumbent, downplaying (reportedly at the government's request) news of economic difficulty and portraying Lula as an uneducated worker with an agenda that would destabilize the country.

Lula's response -- "Cardoso may have studied a lot, but he still has the mind of the colonized. He should know that the IMF today isn't capable of doing much, above all for the third world."

Only days before the election, Lula was joined by Ciro Gomes, leader of the second most popular opposition party. Gomes, formerly one of Cardosos's finance minister, is considered something of an authority on economic issues and should help Lula in his attempt to reach middle class voters.

This is Lula's second race against Cardoso. In 1994, Cardoso, then Minister of the Treasury, fixed Brazil's currency, the Real, at a par with the U.S. dollar while freezing or cutting public expenditures. This stopped Brazil's high inflation and proved very popular at first, as it allowed ordinary working people to undertake at least minimal financial planning -- and Lula, who had led by substantial margins in early opinion surveys, lost by a margin of two to one.

Once in power, Cardoso adopted measures to bring Brazil's economy further into line with the forces of globalization -- cut tariffs, duties and taxes, sold off state-owned enterprises, slashed social spending, and raised interest rates to draw in foreign capital.

These measures appealed to international investors, and foreign funds flowed into the country's treasury. But in late 1997, Cardoso found his country at the mercy of the same international economic forces that had favored his government.

Brazil's currency proved to be overvalued, which means imports became cheaper while exports are too expensive. The country's balance of trade and services deficit skyrocketed from $1.7 billion in 1994 to $35 billion in 1994. Public debt jumped from $62 billion in 1994 to about $300 billion today -- much of it in short term notes, some paying interest at 43 percent.

The Real has remained relatively stable, but the government's own figures show 40 percent inflation since Cardoso's election. Basic food prices have risen even more -- beans have tripled in price in the past year -- even though Brazil is the largest exporter of agricultural commodities in the third world. Cuts in social spending have also taken a serious toll, especially in health, and spending for education has stagnated.

A drought in Brazil's northeast, known as the Sertao, threatens some ten million people with hunger. The Movimento Sem-Terra (MST), or Landless Movement, is mobilizing people to occupy large estates. Others in the region have sacked supermarkets and seized trucks carrying food.

Lula and the Workers Party have openly linked their campaign to MST demands for social justice. His platform promises land to over a million landless peasants, along with credit and technical assistance, micro-agricultural enterprises, cooperatives, community public work projects, People's Banks and subsidies for young people entering the job market.

To pay for all this, the platform proposes higher taxes on wealthy individuals and on the big corporations that dominate the Brazilian economy and a 5% tax on all imported consumer goods. To calm monetary fluctuations, the government would impose laws like those in Chile and Colombia requiring that funds invested in the markets remain for a set period of time.

The crisis of globalization may not lead to victory for Lula this time, but he will be back -- and with him the possibility of exploring new polices for a post-neo-liberal world.