Brazil's Lula warns against "drug" of protectionism

PARIS, March 30 (Reuters) - Brazil's President Luiz Inacio Lula da Silva said on Monday the restoration of credit and the fight against the "drug" of protectionism were the most urgent problems facing G20 leaders meeting in London this week.

Rising protectionist sentiment around the world will also make it difficult to press on with the Doha round of world trade talks, he wrote in a column in French newspaper Le Monde before the meeting of leaders from the world's 20 biggest economies.

As a major commodities exporter and one of the so-called BRIC emerging market powers along with Russia, China and India, Brazil has been a key player in the Doha round. Lula has previously urged leaders to complete the stalled talks.

"I know that it won't be easy to conclude the Doha cycle," he wrote of the seven-year-old round of talks. "In times of crisis, protectionism, which I see as a drug, rises."

A dispute between India and the United States over anti-import surge protections for developing country farmers scuppered an effort to reach a trade deal last July.

Lula said protectionism could cause temporary euphoria but would lead to a "deep depression" in the medium and long term.

He also asked the International Monetary Fund to pump money into struggling economies and said the Fund and the World Bank needed to be more democratic.

The center-left leader has been one of the most outspoken advocates of giving developing countries more say in international organisations such as the IMF. He courted controversy last week when he said the economic crisis had been caused by "white people with blue eyes".

"The IMF has to irrigate the global economy, mainly the emerging countries, to turn around the recessionary trend before it's too late," he wrote, warning that the world faces a "crisis of civilisation".

G20 leaders meeting on Thursday are expected to discuss support for banks, higher spending and more money for the IMF to lift the world economy out of recession by the end of 2010, a draft communique leaked to the Financial Times showed.

(Writing by Sophie Hardach; Editing by Angus MacSwan)

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