Edla Lula
Reporter - Agência Brasil

Brasília - Conventional wisdom has it that you grow in order to distribute income. According to president Luiz Inácio Lula da Silva, speaking on his weekly radio program, "Breakfast with the President" (Café com o Presidente), his administration has inverted the logic of the growth/distribution equation and is using social assistance programs to distribute income so the country can grow. "Contrary to what they say, instead of waiting for growth so we can improve income distribution, we are distributing income so we can grow," said the president.

Lula cited the recent increase in the country's minimum wage (up from US$138 to US$161) and the government's family assistance program (Bolsa Familia) as examples of mechanisms that do not only promote social justice but create economical dynamics, as well. According to the president the rise in the minimum wage will inject US$6.9 billion in the economy.

Lula also pointed out that his administration negotiated with unions regarding the new minimum wage, something that had not taken place since 1964. "Brazilian unions are mature. They know that a real increase of 13% with inflation at 4.5% is a good deal," concluded the president.

Translation: Allen Bennett