Re-elected in October with more than 60 per cent of the vote, President Luiz Inácio Lula da Silva has promised to be more daring during his second four-year term. His ministers are promising a growth rate of 5 per cent, an ambitious target after years of virtual stagnation, if still way behind other big countries of the region such as Argentina and Venezuela.
But, a month before he officially begins his second term, on 1 January, the pressure on Lula to abandon his cautious economic policy, with its double-digit bank rate and IMF-prescribed curb on social spending, has already begun.
Left-wing trade unions, social movements and church organisations, which claim credit for his victory and the "defeat of the neoliberal right", are calling for a new economic policy based on sustainable development with job creation and income distribution. These groups admit they gave uncritical support during Lula's first term, stunned into uncomfortable silence, first by the extremely conservative economic policy of his PT (Partido dos Trabalhadores) government, and then by the corruption scandals that overshadowed much of the past two years. Now they want a bigger voice in the next government and a "fairer and more egalitarian Brazil".
Yet there are signs that Lula's plans for development have much more in common with the needs of big business, especially agribusiness, than they do with the dreams of the grass roots. Development to them means heavy investment in infrastructure - roads and hydroelectric plants, many of them in the Amazon - to make it cheaper to export commodities, especially soya, grains, beef and biodiesel fuels.
Lula has said that he intends to reconcile economic growth with environmental protection. None the less he described "Indians, quilom bolas [communities of descendants of runaway slaves], environmentalists and the public pro secution service" as obstacles to development when inaugurating a biodiesel plant in Mato Grosso State, where 40 per cent of the Amazon forest has been cleared for vast soya farms.
Besides, he has already sealed alliances with more conservative parties and state governors to ensure support in congress, where the PT does not have a majority. Such alliances make it unlikely that Lula can challenge the big landowners with an ambitious land reform programme, as demanded by Brazil's most powerful social movement, the Landless Workers' Movement. Instead, he is expected to widen the scope of Bolsa Família, the income distribution programme that won him the votes of millions of poor families.
In the cities, Lula has to find a way to stop the deadly violence that makes the favelas, or shanty towns, virtual no-go areas. A violent police force and the corrupting power of drug barons also stand in the way of serious reform.
Lula is not a showman like Venezuela's Hugo Chávez or Bolivia's Evo Morales, but Brazil has provided support for the Chávez government at critical times, refused to bully Bolivia over hydrocarbon nationalisation, and maintained cordial relations with Cuba.
Though Lula's second term of office promises a more confident stance on the world stage, domestically there is likely to be growing conflict between a president enamoured of the idea of development at all costs, and social movements and left-wingers of his own party demanding an agenda of social change and much greater popular participation.