Brazil will soon witness the end of the Lula era. On Sunday Brazilians will elect a new head of state, but their much-applauded president is barred from joining the race. After two terms, Lula has had his maximum share of power. He changed Brazil and chose The Netherlands as his gateway to Europe.

When Luiz Inácio Lula da Silva became president in 2002, the international markets and Brazilian business pundits expected the former union leader to wreak havoc, but Lula's handling of the Brazilian economy ended up pleasing friend and foe alike - or most of them, at least. From the very start, President Lula put his country in the global spotlight, says Marten van den Berg, an international economic interests expert at the Dutch economic affairs ministry.

”I believe the Lula era has been extremely important to Brazil, both from a national and an international perspective. On the domestic front, I was deeply impressed by the major improvements the president made to the lower end of society. At the same time, he has brought the country great economic growth. He inspired trust in the international financial markets, which has been enormously beneficial to Brazil.”

Big investments
During that same period, economic ties between Brazil and The Netherlands were strengthened. In the past few years, the Dutch were among the five biggest investors in Brazil. Dutch investments in Brazil are bigger than in China, for example.

According to economist Van den Berg, There has been a lot of cooperation between the Dutch and Brazilian maritime industries, for instance in the construction of new shipyards in Brazil. Ties between the two countries are also close in the field of agriculture. The University of Wageningen has its own branch offices in Brazil.

Deliberate Policy
And Brazil has found its way to The Netherlands. It is among the five countries where Brazil invests the most. Besides being its gateway to Europe - mainly via the port of Rotterdam – Brazilians and Brazilian businesses are a growing presence in the Netherlands, from students to companies such as energy giant Petrobras.

The two economies are becoming increasingly intertwined. President Lula deliberately chose the Netherlands. And it did not hurt that he had a good relationship with Prime Minister Jan Peter Balkenende. Brazil likes to regards the Netherlands as a partner in presenting itself to the European Union. Martin van den Berg emphasises that to Brazil “The Netherlands is the gateway to Europe”.

Opening up
But on the other hand, Brazil isn't quite there yet. Its economy needs to open up to the rest of the world.

”Imports and exports represent about 10 percent of Brazilian GDP, which is quite low. Brazil is a difficult country for foreign businesses, but in my opinion also for domestic businesses, because of the extensive government bureaucracy, the red tape. Brazil also has a lot of local business conditions and I think that is not always conducive to competition in the Brazilian economy”.

And will the elections this Sunday be the end of Lula? Certainly not. All signs indicate that his party's candidate, Dilma Roussef, will be elected and even if he remains in the background, Lula will still be very much present in Brazilian politics.

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