Dilma Rousseff's cabinet 'compromise' to reignite Brazil's economy

Transcript of interview between World Review expert Professor Joseph Tulchin (JT) and Professor Jose Augusto Guilhon Albuquerque (JAGA), Professor at the University of Sao Paulo, and Visiting Fellow at Campinas University, Brazil.

JT: We’re talking today with Professor Jose Augusto Guilhon Albuquerque. We’ve spoken to him before about the Brazilian elections and Professor Guilhon and I are going to chat a little bit about the recent nominations by President Dilma Rousseff of what looks like a new economic cabinet; particularly the Minister of Finance Joaquim Levy. What do you say Guilhon? What is your opinion of these new nominations?

JAGA: Look, her choice in a certain way reflects the kind of dilemma she’s in. Because if you appoint the security council head with a pacifist, a hawk for the state department and a bureaucrat for the defence ministry, you see? She has different lines of economic policy she can pick anyway.

The promise that she had to achieve some kind of growth before the elections, but to do so she has to achieve some sort of austerity programme and good governance. But she cannot fight parts in her own party, in her large coalition to adopt this kind of programme.

JT: So she’s in a bind, a confrontation with reality here. How is she going to manage this? Austerity for her political base will not be very congenial.

JAGA: Yes, but the problem is that her coalition is a little bit different, but not so different from her previous coalition.

But the difference is that they don’t fear her, they don’t fear the PT (Worker’s Party) anymore. They think she’s weak and she has to do anything the congress will demand of her. This is a very difficult situation.

The last vote on the congress, one out of four PT representatives or senators did not participate in this crucial debate for her, because she is facing a sort of indictment because she did not accomplish the balance of the budget. And there is a law forcing her to have some kind of surplus to service the debt. She didn’t do that. And she asked the congress to free her from this obligation.

And in this crucial debate, one out of four members of her party didn’t vote, didn’t participate and there was a very narrow victory.

JT: So she has a very difficult road ahead. She’s appointed this man. Is it true the rumours that appear in the international press, that Levy is a suggestion made by Armino Fraga who was the consultant to Aecio Neves, the man she just beat?

JAGA: He is a very orthodox economist. Very different from Alexandre Tombini. He’s a technocrat, he’s a good one. But during Dilma’s government, the last two years before the election he did pretty much what she told him to do. And Nelson Barbosa, he’s a developmentalist. He favours state intervention, he favours subsidising the industry, etc.

JT: So this is a mixed group that’s not pure orthodox economic. It’s a compromise she seems to have made to get the economy going again.

JAGA: Yes, and when she appointed Levy, the most important influences, academics, intellects and artists in the PT wrote a manifesto against the new economic policy she was announcing. And this means that they are giving arguments for the PT to fight her policies.

JT: So the months ahead should be, as the Chinese say, a very interesting period?

JAGA: Very much so.

JT: Well, let’s be optimistic. I look forward to chatting again in a few months to see how Dilma’s new economic sub-cabinet is working out to get Brazil’s economy moving. Professor Jose Augusto Guilhon Albuquerque, thank you very much and we look forward to talking with you again.

(Photo credit: dpa)