Foreign Desk; Section A



Foreign Desk; Section A

Picking Butter Over Guns, Brazil Puts Off Buying Jets

By LARRY ROHTER

01/04/2003

The New York Times

Page 3, Column 1

c. 2003 New York Times Company

BRASILIA, Jan. 3 -- Brazil's new leftist government today suspended a $760 million purchase of a dozen new jet fighter planes for its air force, saying the money could be better used to relieve hunger.

The announcement was made after President Luiz Inacio Lula da Silva, a former factory worker and labor union leader who took office on Wednesday, met officially with his cabinet for the first time.

Defense Minister Jose Viegas said that the plane purchase, one of the biggest military expenditures in Latin America in the last quarter-century, would be postponed at least a year and that he had begun looking for cheaper alternatives, like renting, or buying used aircraft.

Mr. da Silva's decision ''reflects the urgency of this country focusing its efforts on the question of hunger'' and should not be seen as a rejection of the military, the new president's spokesman, Andre Singer, said.

Mr. da Silva is unwilling to ''create a new hole'' in the budget now, Mr. Singer added, but ''the entire equipment refurbishment project remains on the cards'' for the future.

The military did not dissent -- at least publicly -- with a president who had just taken office. During the right-wing military dictatorship that ruled Brazil from 1964 to 1985, Mr. da Silva, then a leader of the metalworkers union, was ordered jailed by officers who considered him a dangerous radical. But he and other leaders of his Workers' Party have cultivated ties with the military in recent years, even as their party has moderated its platform.

The newly appointed commander of the air force, Gen. Luiz Carlos Bueno, said Mr. da Silva's decision to postpone the purchase of the aircraft had been accepted without complaint by the armed forces hierarchy. ''We are working with the government, not against it,'' he told reporters.

In his inaugural address on Wednesday, Mr. da Silva said eliminating hunger would be his administration's top priority. Even before taking office, he announced the creation of a program called Zero Hunger to attack a social problem that affects at least 25 million of the country's 175 million people, mainly children and black people in rural areas.

''So long as there is a single Brazilian brother or sister going hungry, we have ample reason to be ashamed of ourselves,'' he said in the speech. ''If at the end of my term of office every Brazilian has the opportunity to eat breakfast, lunch and dinner, then I will have completed my mission in life.''

Mr. da Silva's emphasis on assuring ''food security,'' to use the term given to a new government ministry, is in part the result of his own experience. He was born into a large peasant family in a poor rural area and as a child sometimes went hungry himself.

Five foreign companies have been competing to win the coveted fighter plane contract, among them Lockheed-Martin, maker of the F-16. Two Russian companies, the makers of MIG and Sukhoi aircraft, have also proffered bids, but the front-runner was thought to be a French-Brazilian joint venture that plans to build Mirage jet fighters in Sao Paulo State.

The Brazilian partner in that consortium, known as Embraer, was founded by the Brazilian Air Force but is now corporately owned and has become the world's fourth-largest aircraft manufacturer.

After the government announcement, the value of Embraer's stock dropped by more than 2 percent on the Sao Paulo exchange, on a day when the market was rising.

During a meeting on Thursday with Prime Minister Goran Persson of Sweden, Mr. da Silva dropped his first hint that he might suspend the plane purchase. Mr. Persson had come here for the inauguration and, Brazilian government officials said, lobbied Mr. da Silva on behalf of Saab, which is a partner with a British company in another consortium bidding for the contract.

At present, the Brazilian Air Force's fleet of fighter planes consists mostly of Mirages that are nearly 30 years old and were scheduled to be phased out by 2005.

Bidding to replace them began more than two years ago, with a decision expected by the end of 2002, but after his huge victory in October, Mr. da Silva persuaded his predecessor, Fernando Henrique Cardoso, to hold off awarding the contract.

Air force officers had frequently complained that their equipment was in poor condition and that they were reduced to cannibalizing aircraft for spare parts. Because of budget cuts, even flight time for pilots has been limited, so air force officers welcomed the modernization effort as long overdue.

The postponement is likely to perturb some of Brazil's neighbors, in particular Colombia, whose armed forces are involved in a longstanding conflict with leftist guerrilla groups that use the Amazon border with Brazil as a staging and supply area.

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