The president-elect of Brazil, Luiz Inácio Lula da Silva, would have decided to create a curious combination at the head of the economic area, with a kidney man from his Workers’ Party, Fernando Haddad, in the finance ministry, and a tough liberal like Pérsio Arida, to the Ministry of Planning. The latter portfolio is the one responsible for the budget and state reform plans.

The newspaper Folha de São Paulowho delivered the version, said that the intention of the next ruler, who will take office on January 1, will be keeping the party responsible for strategic decisions (Haddad) but opening space to the influence of an economist with an orthodox profile (Arida).

The story, at least as far as Haddad is concerned, seemed to be confirmed this Friday when the president-elect sent him to give the speech at the annual luncheon of the Brazilian banking chamber, Febraban. But the message, considered vague and lacking in precision, was not compliant. The stock market fell again the last day of the week 2% and the dollar went up.

Arida, who is a member of Lula’s transition teams, did not comment on whether she would agree to enter the next government on those terms. The next president’s intention would be to announce the two names together to alleviate any backlash that might occur.

Combination two opposing personalities in economic leadership it’s at least a risky bet.

Haddad, a former education minister with a doctorate, law degree and master’s degree in economics, does not particularly like the markets. He was the presidential candidate chosen by Lula in 2018, when the PT leader was jailed, accused of corruption.

Haddad is questioned about his ideological bias and also a tough negotiator, at a time that would require a delicate fencer due to the complex opposition front facing the new government.

challenges

Lula won the election but with a minimum difference of 1.8% of the votes. Outgoing President Jair Bolsonaro garnered almost half of the country’s votes, his allies control the legislature and governments of several key states in the country. The economy in Brazil is discussed in Congress, in fact.

The most urgent proposal to be negotiated in Parliament is precisely the one that allows for a spending license that exceeds the ceiling that the law sets for public spending. This issue has become a mess for Lula’s party and stuck amid serious articulation problems, he argues. Folha de São Paulo in his chronicle.

Haddad sidestepped that issue in his speech to the bankers, amplifying the worry of that sector of economic power.

Lula’s election victory was well received by the markets, with rallies the day after the election. But those reactions soon turned negative.

The delay in the appointment of the new head of the economic portfolio worked in this direction, as did the speeches of the president-elect in which he argued that he preferred to give in to fiscal responsibility in the name of greater social value.

Isaac Sidney, president of Febraban, said in his opening message at the luncheon that “the banks are in favor of income distribution, but what the country needs is faith to support these social policies”.

Haddad, in turn, said in his speech that one of the priorities of the third Lula government will be tax reformwith a reformulation of taxes on property and wealth.

Folha He stressed that the former education minister has two important characteristics for Lula: affinity and trust.

Source: Clarin editorial team