As widely expected, former union leader Luiz Inacio "Lula" da Silva won Brazil's presidential election runoff by a landslide Sunday, becoming the first leftist to be elected leader of the Western Hemisphere's second-largest country.

Silva trounced ruling party candidate Jose Serra 61 to 39 percent, the government Supreme Electoral Tribunal announced, signaling that Brazilians had given up on free-market reforms — and also had abandoned their fears of the formerly socialistic Workers Party.

"I think Brazil can play an extraordinary role in this American continent, so that we can build an effective world peace, where countries can grow economically and socially for the well-being of their people," Silva, once a shoeshine boy in São Paulo's slums, said in his victory speech.

A somber Serra, a former health minister, wished Silva "good luck in leading the destiny of Brazil" in a concession speech at his campaign headquarters.

Thousands of people thronged the streets of São Paulo, waving the red flags the Workers Party to the boom of fireworks and the throbbing of live music. Some revelers also hoisted the hammer-and-sickle flag of the Communist Party, which backed Silva.

So did the rightist party of Silva's running mate, Jose Alencar. The country's bankers and industrialists associations were among those welcoming Silva's victory.

Silva, who dropped out of school after the fifth grade, will face enormous challenges after his Jan. 1 inauguration. He must try to pull more than 50 million Brazilians from poverty, save the world's ninth-largest economy from recession, create new jobs and increase housing.

At the same time, he must maintain fiscal responsibility and the confidence of Brazil's creditors and investors.

Standing by a huge banner with the words "Hope Will Overcome Fear," supporters listened to Silva deliver a speech filled with encouragement, his words echoing down Avenida Paulista, São Paulo's main avenue.

"So far, it has been easy," Silva said. "The hard part begins now. We will work around the clock to fulfill every one of our campaign promises."

In an interview with Brazil's Globo TV, he reiterated that his administration would honor Brazil's $230 billion foreign debt, but said lending institutions and the international community "must know that we cannot have people suffering from hunger every day."

For many, Silva's win represents a chance for leftist politics to make a comeback on a continent where, except for Venezuela, it seemed in danger of fading away.

"This is our opportunity to consolidate our hopes for a Brazil which should be more just, and needs to care more about the needs of the people," shouted Marcos Xavier, a university professor standing among the throng of Silva supporters on São Paulo's main avenue.

While the votes were still being counted, the White House offered its congratulations to the winner.

"The president congratulates the winner of the election and looks forward to working productively with Brazil," press secretary Ari Fleischer said aboard Air Force One while returning from an economic summit in Mexico.

Relations with Washington may become testy. Silva already has expressed opposition to President Bush's ambitions to have a 34-nation Free Trade Area of the Americas in place by 2005. Silva wants U.S. markets more open to Brazilian orange juice, steel and sugar.

Silva also opposes the U.S. military presence in neighboring Colombia and the U.S. embargo against Cuba.

But the Bush administration has been careful not to criticize Silva during the campaign, aware that any comment could be seen as interference.

The son of a poor farmer, Silva is a role model for the impoverished millions of this country, which is almost the size of the United States. Silva easily beat Serra in the first round of voting, but since he just failed to get 50 percent of the vote, the two top candidates met in Sunday's runoff.

Brazilians are caught between hopes that Silva will reverse rising unemployment and economic stagnation and fears that the former radical union leader could worsen the country's economic woes.

"Lula is the only who can bring about the changes that the country needs to reduce unemployment and improve the standard of living of the people," said Eloisa Marques, 38, laid off earlier this year from a drug store.

But standing next to Marques in a voting line in an industrial suburb of São Paulo, Waldir Conde said he preferred Serra.

"Lula doesn't have experience to govern," Conde said. "To rule a country like ours, which is dominated by the United States, it is necessary to have a lot of experience and a firm hand. Serra showed he has that."

In a São Paulo slum, or favela, pro-Silva sentiment was widespread as people lined up to vote.

"He was the only one — as a metalworker union leader — who helped the poor," said Nelson Luiz da Silva Pelotti, a 56-year-old retired metalworker.

But even in an area that is a base of support for Silva, his radical past haunted him.

"I don't like communists in my country," said Silvio Alvano, a taxi driver who lives in the slum, adding that he was voting for Serra.

Silva, who turned 57 on election day, will appoint a team this week to ensure a smooth transition from the government of current President Fernando Henrique Cardoso, who served two four-year terms and was barred from seeking a third.

Cardoso privatized many of Brazil's giant monopolies and lowered import taxes, but failed to help millions of poor Brazilians.

Silva is expected to came up with several new initiatives, including creating a super-ministry to take oversee housing, urban sanitation and transportation. He also reportedly plans to promote to Cabinet level those government agencies dealing with hunger, security and racism.

Silva left school after the fifth grade to sell peanuts and shine shoes on the outskirts of São Paulo. At 14, he began working in a factory, where he lost his left pinkie finger in a machine press.

Silva first ran for president in 1989 as the candidate of the Workers Party, urging landless farm workers to invade private property and calling for a default on Brazil's foreign debt.

However, in three subsequent presidential campaigns, Silva moderated his radical tone.

Brazil's last leftist president was João Goulart, a vice president who assumed power in 1961 when the centrist president resigned. Goulart served 2½ years and was deposed by a right-wing military coup.

The Associated Press contributed to this report.