Brazil: The World's Next Economic Superpower?

Steve Kroft Reports on the Country That is Poised to Become the Fifth-Largest Economy in the World

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Brazil has seen periods of prosperity before, only to have the bubbles burst. It spent billions in the '50s and '60s moving its capital to a barren savannah near the middle of the country where it built Brasilia, a futuristic city right out of "The Jetsons." Then it borrowed billions more to develop the country's interior. Corruption and ineptitude eventually led to a financial collapse, 2000 percent inflation and, at the time, the largest financial rescue package in the history of the International Monetary Fund.

Then, a few years later, President Luiz Inácio Lula da Silva walked into the President's office. Known simply as "Lula," he is a former metal worker with a fourth-grade education -- and a doctorate in charisma.

When he was elected eight years ago on his fourth try, Lula was a firebrand labor leader with socialist tendencies. Some predicted another Hugo Chavez. But he is about to leave office with a 77 percent approval rating, and much of the credit for turning the country around. "60 Minutes" talked to him at the presidential residence in Brasilia.

Kroft asked Lula, "When you took office, there were many businessmen, both in Brazil and abroad, who were very nervous about you, who thought you were a socialist and that you were going to take the country sharply to the left. Yet these people now are among your biggest supporters. How did that happen?"

Lula responded, "Look, every once in awhile I joke that a metal worker with a socialist background had to become president of Brazil to make capitalism work here. Because we were a capitalist society without capital."

He added, "If you look at the banks' balance sheets for this year, you will see that the banks have never made so much money in Brazil as they have during my government. The big companies have never sold as many cars as they have during my government, but the workers have also made money."

So how has he managed to do that?

Lula told Kroft he has "found out something amazing."

"The success of an elected official is in the art of doing what is obvious," Lula said. "It is what everyone knows needs to be done but some insist on doing differently."

One thing obvious to Lula was the social and economic chasm separating Brazil's rich and poor. He gave the poor families a monthly stipend of $115, just for sending their children to school and taking them to doctors.

The infusion of cash helped lift 21 million people out of poverty and into the lower middle class, creating an untapped market for first-time buyers of refrigerators and cars.

But he was also far friendlier to business than anyone expected. Lula encouraged growth and development, and maintained conservative fiscal policies and tight banking regulations that left Brazil unscathed by the world financial crisis.

Eduardo Bueno, a colorful commentator and best-selling author of popular Brazilian history, told Kroft, "Lula was the right man at the right time it seems. You have to admit, to admit it, you know? He's, he's a kind of pop star."

"What's his secret?" Kroft asked.

"He's streetwise," Bueno said. "He knows people, he knows the feeling. He knows what he wants. He knows how to deal with the rich. He charms President Obama."