From the AP:

[President] Silva made the economy and crime the cornerstones of his inauguration speeches Monday. He vowed to increase economic growth that has lagged behind the rest of South America, without sacrificing the social programs that are largely responsible for his high popularity.

But political opposition to needed economic-policy reforms and entrenched criminal gangs will make meeting those goals no easy task, analysts said.

But political opposition to needed economic-policy reforms and entrenched criminal gangs will make meeting those goals no easy task, analysts said.

First elected in 2002, Silva, known familiarly as Lula, adhered to strict fiscal discipline and market-friendly policies during his first term, attracting foreign investors, strengthening the currency and curbing inflation.

But Latin America's biggest country has seen only feeble economic growth, reaching 2.8 percent in 2006 and expected to rise 3.4 percent in 2007 — far below Silva's stated goal of 5 percent.

"If growth were to reach or exceed 5 percent, Lula would be in better position to pursue even more aggressive and successful anti-poverty policies, giving him a splendid legacy in Brazil and even throughout Latin America," said Michael Shifter, Latin America analyst at Inter-American Dialogue research group in Washington.

"But Lula will have a very tough time reaching a higher rate of growth, raising productivity and stimulating investment, unless he carries out thoroughgoing policy reforms," he added….