BRASILIA, Brazil (AP) — Brazil’s President-elect Luiz Inácio Lula da Silva on Friday unveiled some of the faces that will comprise his incoming administration, including his much-awaited pick for finance minister: former Sao Paulo mayor Fernando Haddad.
Haddad's nomination ends weeks of suspense that have led to stock volatility and ups and downs of the country’s real currency, amid intense pressure from financial markets for da Silva to make his choice known.
Haddad, 59, is a former education minister who has been a member of the leftist Workers' Party for more than 20 years. He has limited experience in the markets. Da Silva’s choice for a politician close to the party for the job rattled some experts.
“This government's level of concern for the following years' expenses isn't clear yet. Haddad has less commitment to fiscal matters than what the market expects, and less dialogue with Congress than da Silva's former ministers,” said chief economist from MB Associates, Sergio Vale.
While Brazil's stock exchange dipped sharply immediately after the Haddad announcement, it later rebounded.
Haddad acknowledged on Friday that his incoming team will work closely with the person da Silva chooses to head the restored planning and budget ministry. “We need to have a plural and cohesive team and this needs to be combined with the planning minister.”
The future planning and budget minister still needs to be chosen. The Cabinet position had been scrapped by President Jair Bolsonaro, who opted for an all-powerful economics ministry, led by University of Chicago-trained liberal Paulo Guedes.
Haddad joined the planning and budget ministry in da Silva's first administration, in 2003. He later became education minister – a job he kept for six years. He left da Silva’s second administration to take over Sao Paulo’s City Hall. In 2018, he ran for president after da Silva was convicted for corruption and money laundering, and lost to Bolsonaro.
On the campaign trail, da Silva - who is universally known as Lula - vowed to maintain and even expand a welfare program that transfers 600 reais (US$115) to 21 million poor families.
Faced with budget limitations, and wanting to be able to keep other campaign promises, the president-elect is seeking to remove the program's funding – estimated to cost US$27 billion – from the country’s constitutionally enshrined spending cap.
While some have applauded his efforts to fight poverty and hunger, others have criticized his apparent lack of fiscal discipline.
Another key appointment by Brazil's incoming president was José Múcio as defense minister. Múcio is a former president of the federal government accounts watchdog, and is a former minister of da Silva's administration in 2003. The appointment of a civilian to the defense post is a switch from the approach taken by the outgoing Bolsonaro government which militarized the ministry.
“This is one of da Silva's campaign promises. The main goal is to cool down the temperature, removing the military from the center of political issues,” said Eduardo Svartman, political analyst who presides the Brazilian Association for Defense Studies.
Another important aspect of Múcio's nomination, according to Svartman, is to signal to opposition parties that the new government is open for dialogue. The new minister was a lawmaker from 2007 to 2011 in a party that is now aligned to President Jair Bolsonaro.
“He was my colleague for 20 years in Congress, I always speak to him. We live in a democracy, there's no need to be enemies", said Múcio when questioned by reporters on Friday about speaking with Bolsonaro.
The new minister also pointed out he will follow the existing hierarchical system for Armed Forces' nominees. “I'll propose to the president for us to follow the traditional system, the oldest in each force will be nominated” said Múcio.
Bolsonaro, a conservative former army captain who has often praised Brazil’s military dictatorship (1964-1985), has relied heavily on current and former soldiers to staff key Cabinet positions.
Tensions around Bolsonaro’s interference culminated in March last year when leaders of all three branches of the armed forces jointly resigned following the replacement of the Defense Minister – a military shakeup that many experts said was serving Bolsonaro’s political interests.
Bolsonaro has also sought to expand armed forces’ role in an election he claimed, with no evidence, was prone to fraud because of the country's electronic voting machines. Following his electoral loss to da Silva on Oct. 30, many protests popped up outside military barracks and facilities across the country, asking for the armed forces to intervene and keep their leader in power.
Other ministers announced on Friday are Worker's Party member and former Bahia state governor, Rui Costa, for Cabinet chief of staff; Brazilian ambassador in Croatia, Mauro Vieira, as foreign minister; and former Maranhão state governor and senator elect, Flavio Dino, in the Justice and Public Security Ministry.
AP reporter Diane Jeantet contributed to this report from Rio de Janeiro.