UPDATE 1-Latin American leaders berate U.S. for crisis

Fri Jan 30, 2009 2:48am GMT

(Adds comments from Lula, Correa)

By Stuart Grudgings

BELEM, Brazil Jan 29 (Reuters) - Left-wing Latin American presidents blamed the United States on Thursday for the global economic crisis and said "neo-liberal" capitalism was bankrupt.

U.S. economic mismanagement is causing chaos across the world and "21st century socialism" is the only way forward, Venezuela's socialist President Hugo Chavez said, leading the charge at an international meeting of leftists in Brazil.

"Misery, poverty and unemployment are on the rise, and it's mostly the fault of global capitalism," Chavez said as cheering supporters waved red flags at the World Social Forum in the Amazon city of Belem.

"We are facing a crisis in the global capitalist system and the irresponsible economic policies of the government of the United States," he said.

Chavez heads a bloc of anti-U.S. leaders in Latin America and was joined at the forum of leftist groups by some of his closest allies -- Presidents Rafael Correa of Ecuador, Fernando Lugo of Paraguay, and Evo Morales of Bolivia.

About 100,000 activists are attending the forum, campaigning for everything from anarchism to rain-forest preservation to a return to Soviet-style communism. The forum has attracted a record of number of presidents this year as the financial crisis has sent economies into recession and forced rich countries to bail out their banking systems.

Correa and Lugo fired up the crowd in a university gym by serenading them with songs including "Comandante Che Guevara," a tribute to the late Latin American revolutionary.

They later joined Brazil's moderate leftist President Luiz Inacio Lula da Silva at another gathering of thousands of activists, including hundreds of indigenous Amazon Indians in traditional headdresses and body paint.

LULA CHEERED

Lula, whose policies have balanced social programs with free-market orthodoxy, brought a dozen cabinet ministers to the forum and spurned the Davos summit of business leaders in Switzerland that he had attended previously.

"I believe the crisis is much more severe. We don't know how deep it will go," he said, adding that his government would invest in industry to create jobs rather than give public money to banks as rich countries have done.

He said the United States and other rich countries should get the same tough treatment that Latin American countries received during their financial crises in recent decades. "Now, I expect the IMF to go to Obama and tell him how to fix the economy," Lula said, referring to new U.S. President Barack Obama.

Lula, a former factory worker who has blamed the crisis on the United States and "casino" capitalism, got the biggest cheer of all the leaders on Thursday but avoided socialist rhetoric.

Ecuador's Correa said the crisis showed that the "neo-liberal" model had failed, and said the social forum was now more relevant than the Davos World Economic Forum.

"They are the ones responsible for the crisis. They are not the ones to give us lessons," he said.

Chavez also called on Obama to hand back the Guantanamo Bay area to Cuba, after praising him for his decision to close the controversial military prison camp there. He said the economic crisis was a "virus" invading Latin America and that it should spur further steps toward regional unity and socialist policies.

Nilvan Rodrigues da Silva, a leader of a Brazilian union of public workers, said Chavez had more right than Lula to be the flag-bearer of the left in Latin America.

"Governments like Lula's have allied themselves with the bourgeoisie, be it national or international. For us, only socialism can solve the crisis that is attacking the whole world," he said. (Additional reporting by Brian Ellsworth in Caracas and Eduardo Garcia in La Paz; editing by Mohammad Zargham)