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C O N F I D E N T I A L SECTION 01 OF 05 SAO PAULO 000090 
 
SIPDIS 
 
NSC FOR LROSSELLO 
 
E.O. 12958: DECL: 02/05/2029 
TAGS: PREL PGOV PINR EFIN ETRD ECON BR
SUBJECT: PROFILE OF 2010 PRESIDENTIAL FRONT-RUNNER: JOSE 
SERRA 
 
REF: A. SAO PAULO 581 (08) 
     ¶B. SAO PAULO 679 (08) 
     ¶C. SAO PAULO 650 (08) 
     ¶D. SAO PAULO 497 (08) 
 
Classified By: Consul General Thomas White; Reasons 1.4 (b) and (d). 
 
¶1.  (C) Summary:  Sao Paulo State Governor Jose Serra (PSDB) 
is on a roll, with an ally recently taking the Sao Paulo 
Mayor's Office (Ref A) and a former PSDB rival, Geraldo 
Alckmin, joining his government as a key advisor.  These 
moves help reinforce Serra's drive to become Brazil's next 
President.  Serra is a complex man with a significant 
academic record and a demanding -- and highly successful -- 
results-oriented administrative style.  Though strongly 
nationalist in his inclinations, Serra would likely have 
little patience for -- and little in common with -- the 
antics of the "resource caudillos" (Evo Morales, Hugo Chavez) 
that now lead South America's anti-Washington Left.  Further, 
Serra's nationalism could well compel him to deal with a 
problem increasingly recognized by Brazil's foreign policy 
experts, that of the growing instability of the country's 
neighbors and its possible spillover effects for Brazil (Ref 
D).  Finally, Serra's personal qualities -- his passion for 
education, the easy rapport he achieves with school children 
(as opposed to his reserve around adults), and his inability 
to "suffer fools" -- all could open pathways to buiding a 
relationship with a talented administrator who may well 
become Brazil's next President.  Despite his tendency to keep 
the U.S. at arm's length, Serra might well function as a 
positive interlocutor for the United States.  End Summary 
 
Serra on a Roll 
 
¶2.  (C) Since seeing his DEM Party ally, Gilberto Kassab, win 
a landslide victory in Sao Paulo's municipal election in 
November, PSDB Sao Paulo State Governor Jose Serra has been 
on a roll in his quest to capture Brazil's Presidency (Ref 
A).  He has announced an alphabet soup of programs to 
stimulate the state economy in the face of the financial 
crisis and, in his latest coup, he convinced former PSDB 
opponent Geraldo Alckmin to join his administration (Ref B). 
(Note: Alckmim was allied with Serra's chief rival for the 
PSDB presidential nomination, Minas Gerais Governor Aecio 
Neves.  Alckmin's joining Serra strikes a blow to Neves' 
chances of successfully challenging Serra.  End Note.)  Like 
any leading candidate, Serra merits close analysis.  In his 
case, this becomes doubly important since Serra himself is a 
highly atypical politician with particular quirks (his 
insomniac workaholism and seemingly anti-social style) and 
interests (including a passion for elementary education). 
While some of these idiosyncracies may at first appear 
off-putting (even his friends agree he is difficult), these 
qualities, if managed carefully, could also become the 
building blocks of a positive relationship.  This profile was 
prepared following interviews with a number of people who 
work closely with Governor Serra in a wide variety of 
capacities.  The group was striking for it's intense loyalty 
to Serra, their frank descriptions of some of his 
antipathetic qualities (which they have learned to take in 
stride), and their dedication and evident competence.  Though 
Serra is a demanding boss, he attracts and inspires a 
results-based dedication to public service, evident in the 
"Serristas" with whom we spoke. 
 
¶3.  (C) Interviewees included: PSDB Senator Paulo Renato 
Sousa, Sao Paulo State (SP) Secretary for Institutional 
Relations Jose Henrique Reis Lobo, SP Civil House Chief 
Aloysio Nunes, SP Education Secretary Maria Elena Guimaraes, 
and SP Education Ministry Special Advisor Cristina Ikonomidis 
(who is the special handler for Serra's weekly forays to 
teach in public schools), Federal Deputy for the PCdoB 
(Communist) Party Aldo Rebelo, political consultant Thiago 
Aragao, Bradesco Bank Economist Fernando Honorato Barbosa, 
and former SP Governor Claudio Lembo. 
 
Bio Notes:  Not Your Usual Politician 
 
SAO PAULO 00000090  002 OF 005 
 
 
 
¶4.  (C) Serra is famous for his introverted interpersonal 
style.  He is uncomfortable in the kinds of relaxed social 
settings and personal interactions at which the vast majority 
of politicians excel.  He is also hard to reach, seldom 
confirming appointments until the last minute.  (Official 
meetings are nearly always scheduled in the late afternoon, 
due to his insomnia, a condition for which he reportedly 
refuses to take medicine.)  Last year, he created a minor 
crisis for the Canadian Consulate when he canceled a meeting 
with Canada's Governor General (the Crown's representative in 
Canada) the day before the event. 
 
From Student Leader to Pragmatic Leftist 
 
¶5.  (U) Serra arose as the leader of the national student 
union that opposed Brazil military leaders in the 1960s.  He 
left the country and went into exile in 1964, living in 
Chile, Argentina and the U.S.  (By Serra's own account, he 
barely survived the 1972 coup in Chile; Jose Serra, "The 
Other September 11," Dissent, Winter 2004.)  During this 
time, he married, started a family and earned his Ph.D in 
Economics from Cornell University, returning to Brazil after 
political amnesty was declared in 1978.  (Note: Serra's 
Chilean spouse's maiden name was Allende.  By his 
description, she is a distant relative of the late Chilean 
President.  End Note.)  Serra was clearly influenced by the 
anti-military regime currents then circulating among Latin 
American intellectuals.  Nonetheless, he remained a strong 
technical economist and never fell into a simplistic 
criticism of either capitalism or the United States. 
 
¶6.  (U) After Brazil returned to democracy, Serra served in 
the administration of President Fernando Henrique Cardoso 
(1994-2002).  His most prominent role was that of Health 
Minister.  There, he distinguished himself for his 
willingness to use the state as an effective, if blunt, 
instrument in pursuit of his policy goals.  He enabled Brazil 
to break patents and produce its own anti-AIDS generic drugs. 
 He also forced cigarette companies to ramp up the warnings 
they are required to attach to their advertisements.  To this 
day, Brazilian cigarette warnings are often graphic and even 
gruesome, featuring pictures of amputees that demonstrate the 
dangers of smoking. 
 
Education: Serra Up Close and Personal 
 
¶7.  (C) Serra's no-nonsense administrative style and key 
aspects of his personality are on clearest display in his 
attitude toward education.  As Governor, working with State 
Education Secretary Maria Elena Guimaraes, he has brought 
solid improvements to a sector that many international 
evaluations have identified as a key weakness in Brazil. 
Among the achievements: 
 
--Until last year, teacher absenteeism averaged 39 days per 
year in Sao Paulo public schools.  Serra and his Education 
Secretary pushed through mandates requiring solid medical 
excuses for absence totals that ran over ten days, and this 
has pushed teacher absenteeism down dramatically. 
 
--Most Brazilian textbooks and teachers retain strong, 
anti-market, pro-Workers Party and pro-leftist biases 
(including some strong bias against the U.S., to be reported 
septel).  This Marxist lean is complemented and reinforced by 
inadequate teacher training, which leaves many instructors 
without any practical idea of how to actually control and 
manage their large classrooms.  Serra's people have responded 
by developing a whole series of supplementary texts filled 
with practical activities for use in the classroom and with 
material that tends to soften existing biases.  The texts 
were originally condemned by the leftist Sao Paulo State 
Teachers Union, but have been embraced by teachers, students 
and parents. 
 
Serra's Heart in the Classroom 
 
 
SAO PAULO 00000090  003 OF 005 
 
 
¶8.  (C) For Serra, education is far more than simply an 
issue.  It represents an intensely personal commitment.  Once 
a week, Serra travels from the Governor's Palace to visit a 
different school and to teach a class, most often an 
elementary school math class.  The location of the school is 
kept under wraps until the day before the visit, when 
students receive a bio of the Governor.  People from the 
State Education Ministry and the press are never invited. 
Serra usually warms up the students with a joke, often by 
asking them their regular teacher's name and then 
deliberately misspelling it when he writes it on the board 
(thus allowing the students to "correct" the Governor).  He 
enjoys teaching geometry.  At times, he will also go through 
the newspaper with the students.  These regular school visits 
are a high-priority, deliberately low-profile activity for 
Serra and appear to feed both his policy and personal side. 
 
¶9. (C) Serra uses the trips to inform himself of school 
quality.  State Education Secretary Guimaraes related how 
often, after one of the Governor's school visits, she will 
receive a 3AM e-mail asking about conditions in the school 
and/or remarking about the overall academic level of the 
students.  If Serra sees problems, he will insist that she 
address them.  Serra's style in grilling her, she says, is 
never abusive, but is insistent, direct, and fact-based. 
According to Cristina Ikonomidis, Special Advisor to the 
State Education Ministry and the official "handler" for all 
of Serra's school visits, the normally-dour Governor 
transforms completely when in the classroom.  Serra, who has 
great trouble relating to other adults, quickly establishes a 
bond with the school children.  Photos that Ikonomidis took 
of the school visits confirmed this view.  They showed the 
usually-serious Serra smiling and interacting energetically 
with school children. 
 
From Darling of Finance to "Serraphobia" 
 
¶10.  (SBU) Serra's strong record as Health Minister helped 
him win the PSDB nomination for President in 2002, when he 
ran against PT candidate and current President, Luis Ignacio 
Lula da Silva (Lula).  During the campaign, Serra was the 
strong favorite among the financial community, which feared 
the possible consequences of Lula's election, according to 
Bradesco Bank economist Fernando Honorato Barbosa.  At that 
time, Serra championed what Barbosa loosely labeled "a China 
strategy" for Brazil.  The central government should push 
down interest rates and work to keep Brazil's currency from 
appreciating to promote both economic growth and exports. 
 
¶11.  (C) While Serra seemed like the safe bet for high 
finance next to candidate Lula, once Lula became President, 
opinion in the financial community shifted dramatically. 
Business fell in love with Lula, whose embrace of predecessor 
Fernando Henrique Cardoso's macroeconomic policies has 
enabled them to make a great deal of money during Brazil's 
recent economic boom.  In the meantime, Serra's former 
advocacy of government intervention in interest rates and 
currency values combined with the heavy-handed tactics he 
employed as Health Minister have worried some in the finance 
and business communities (causing many to use the cliche, 
current in some Sao Paulo circles, that "Serra is more 
leftist than Lula").  (Note: Bradesco economist Barbosa 
dismissed the fears of financial intervention, saying that, 
if elected, Serra would find interest rates falling for 
economic reasons and would have no reason to use the heavy 
hand of the state to influence them.  Barbosa did concede, 
however, that even in Bradesco's own economic unit, there is 
an ongoing debate over just how interventionist Serra might 
become as President.  End Note.) 
 
From Sao Paulo to...the Presidency? 
 
¶12.  (SBU) Serra was elected Mayor of Sao Paulo in 2005 and 
resigned in 2006 to run for Governor of the state that same 
year.  Serra successfully engineered the election of his vice 
Mayor, Gilberto Kassab (DEM), to the Mayorship in November 
¶2008.  As Governor, Serra has undertaken a number of policies 
 
SAO PAULO 00000090  004 OF 005 
 
 
that have saved the state money and he is investing those 
funds in "New Deal" type programs that anticipate responses 
to the global financial crisis (Ref B).  In particular, 
Serra's moves seem designed to stymie the advantage of his 
most likely opponent in the 2010 presidential election, 
possible Worker's Party (PT) candidate Dilma Roussef 
(President Lula's Chief of Staff equivalent), whom President 
Lula has put in charge of the PAC infrastructure program. 
Serra appears determined to head off any advantage Roussef 
might derive from this position by initiating his own 
infrastructure projects at the state level and finishing them 
faster and with greater efficiency than national projects. 
 
Serra's likely Macro-View: Green Energy Nationalism 
 
¶13.  (C) Serra's top-down, state-oriented approach to 
problems is less market-dependent than the solutions that the 
USG has generally favored.  That said, there is no 
fundamental disagreement between USG orientations and the 
kind of resource-careful, scrupulously honest and doggedly 
efficient programs Serra promotes.  Potential conflict has 
manifested itself, however, in Serra's evident energy 
nationalism.  In addressing the November 17-21, 2008 Biofuels 
Conference in Sao Paulo, Serra lambasted U.S. trade policy 
and USG support for corn ethanol as inefficient, harmful to 
the development of a more robust global biofuels market, and 
a contributing cause to last summer's brief rise in global 
food prices (Ref C).  Serra closed his remarks by expressing 
Brazil's willingness to help other countries develop ethanol 
production.  While some of Serra's remarks, no doubt, 
represented pre-electoral positioning, they also likely show 
his convictions.  In fact, the US-Brazil Biofuels MOU 
specifically talks about both countries cooperating to help 
less developed countries enter the biofuels market, a fact 
Serra skipped.  Serra's flourish of "green" energy 
nationalism signals a desire, held by many Brazilian elites, 
to stiff-arm the U.S., even on an area where previous 
cooperation had been pledged. 
 
Comment: Opportunity in Complexity 
 
¶14.  (C) Should Serra win the Brazil 2010 elections, he will 
take power at a time when the South American continent is 
becoming more polarized between responsible and/or reformed 
progressives (Uribe, Garcia) on the one hand, and populist 
"resource caudillos" (Morales, Chavez, Correa, Lugo) on the 
other.  While Serra's left-oriented past, preference for 
state-based solutions, and his tendency to embrace Brazilian 
nationalism (perhaps by creating distance between Brazil and 
the U.S.) pose a set of unique diplomatic challenges, Serra 
will likely not/not mix well with the likes of Morales or 
Chavez.  Indeed, Serra's most difficult foreign policy 
challenge will be how to reconcile Brazil's traditional 
approach of paternalism and third world solidarity with the 
fact that the GOB is increasingly finding itself out of step 
economically and politically (especially in multilateral 
fora) with its neighbors (Ref D).  Domestically, Serra's 
reform efforts have led him into conflict with 
left-corporatist groups such as the SP Teachers Union, the 
kind of leftist redoubt whose leadership likely admires Hugo 
Chavez, and who would probably cause him trouble as 
President.  If he becomes Brazil's Chief Executive, Serra 
would probably employ a nuanced strategy similar to President 
Lula's that would speak to domestic and regional interests, 
perhaps using the rhetoric of the left, while engaging 
actively and responsibly with the U.S. both bilaterally and 
multilaterally. 
 
¶15.  (C) Governor Jose Serra is a complex and able leader. 
He has proven administrative experience and a talent for 
picking excellent people.  He would be a complicated 
interlocutor, but, if his interests and qualities are taken 
into proper account, he could be a good functional friend of 
the U.S., providing capable leadership to South America's 
largest country and drawing a positive contrast between his 
own results-oriented style and that of several of his 
populist neighbors. 
 
SAO PAULO 00000090  005 OF 005 
 
 
 
¶16.  (U) This cable was cleared by the Embassy in Brasilia. 
WHITE