PORTO ALEGRE, BRAZIL -- "I will tell the people at Davos that the world does not need war, the world needs peace and understanding," said President Lula da Silva to a cheering crowd of tens of thousands in this sunny port city in Southeastern Brazil. If there is one theme that unified this year's World Social Forum -- and captures the irrationality and destructiveness of letting a handful of people determine so much of the world's fate -- it is opposition to the looming war against Iraq.

The World Social Forum began three years ago -- under the slogan, "Another World is Possible" -- as an alternative to the World Economic Forum, an exclusive gathering of the rich and powerful held at the same time at the mountain resort of Davos, Switzerland.

The WSF has grown enormously, attracting more than 100,000 participants to Porto Alegre for this year's series of events. And among the delegates from 126 countries, the largest contingent outside of Brazil this year is -- to the surprise of many -- from the United States.

This, too, is related to the war. While Secretary of State Colin Powell works the crowd in Davos in an attempt to bully and bribe other governments into going along (e.g. a giant $16 billion IMF loan and $4 billion grant to the government of Turkey, where 90 percent of the people oppose the war) the sizeable American anti-war movement has also reached out to their counterparts around the world.

It is a sad testimony to the state of American democracy that we need the help of other countries to stop our President from getting our own people killed -- along with thousands or tens of thousands of innocent civilians -- in a war that most Americans don't want.

But the war is not the only issue here that brings people throughout the world together against American-led policies that cause so much harm throughout the world. The largest number of delegates are from Latin America, where the profound failure of the policies known here as "neo-liberalism" has become painfully obvious. The last 20 years have seen the region's worst performance in more than a century, with income per person hardly growing at all. The US recipe of substituting the indiscriminate opening of trade and financial flows for what used to be development policy, along with punishingly high interest rates and budget austerity, has failed miserably even on its own terms.

The rejection of the "Washington Consensus," often imposed on Latin America by US-controlled institutions such as the IMF and the World Bank, is what brought Brazil's President Lula da Silva to power last October. And so he is an appropriate symbol of the growing importance of the WSF and its ideas, relative to its elite counterpart in Davos. Last year Lula was also welcomed enthusiastically by the crowds here, as a genuine working-class hero who everyone loved but few thought would actually win. Now he is president of the second largest country in the Americas.

But he still has to deal with the unelected "Masters of the Universe" as the London Financial Times dubbed the leaders gathered at Davos, where Lula also spoke. Chief among these masters is the IMF, which has a program for Brazil's government that is literally impossible. The previous government piled up an enormous public debt: it swelled from 29 percent to more than 65 percent of GDP during former President Cardoso's eight years of office. With domestic interest rates at 25.5 percent (as compared to our own Federal Reserve's 1.25 percent), this debt burden is not sustainable.

Brazil will have to either lower its interest rates considerably or renegotiate its debt, but the IMF and the financial markets are against both of these options. Instead they hope to keep squeezing ever larger debt payments out of the government budget. This cannot be sustained, and for as long as these policies are pursued it will be very difficult for the government to restore economic growth or deliver on its other promises to end hunger and help the poor. A confrontation is inevitable.

"I was not elected by the financial markets, and I was not elected by the powerful economic interests . . . I was elected through the high level of consciousness of Brazilian society," Lula told the crowd in Porto Alegre.

The people here seem to agree. A banner at one of the big marches here said "Give it up, Davos: Lula is one of us."

Mark Weisbrot is Co-Director of the Center for Economic and Policy Research, in Washington D.C.

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