Tough choices as Brazil’s Lula gets down to business

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Brazil (AFP) – Fresh off a holiday beach vacation, Brazilian President-elect Luiz Inacio Lula da Silva tackled a uglier job on Monday: figuring out how to govern with a hostile Congress, a nasty budget crisis and a seemingly impossible to-do list.

The political trade of transition now begins in earnest for the veteran leftist, who will be sworn in for a third term on Jan. 1, facing a much tougher prospect than the commodity-fueled boom he presided over in the 2000s.

Lula, 77, celebrated his narrow victory over far-right incumbent Jair Bolsonaro in an October 30 runoff election by fleeing last week to the sun-drenched coast of Bahia in northeastern Brazil.

He joked that he needed a belated honeymoon with his future first lady Rosangela “Yanya” da Silva, whom the twice-widowed former metallurgist married in May.

His other honeymoon — the political one — may be short, analysts say.

Lula will meet with advisers in Sao Paulo on Monday. He will travel to the capital, Brazil, on Tuesday to finish assembling his 50-member transition team and begin talks with members of Congress, two allies told AFP.

He faces a battle to pass bills in a legislature where conservatives made big gains in October’s election.

Lula’s coalition has about 123 votes in the 513-seat Chamber of Deputies and 27 in the 81-seat Senate, meaning he will have to forge alliances to get anything done — and even just to survive, given the threat of impeachment in Brazil , where two presidents have been impeached in the past 30 years.

In the shark tank

Lula is expected to meet in Brazil with Lower House Speaker Artur Lira, a key ally of Bolsonaro from the loose coalition of parties known as the Centrao, a group known for aligning with whoever is in power – in meal replacement with the federal pork barrel.

Lula will be under pressure from the Centrao not to oppose the so-called “secret budget”: 19.4 billion reais ($3.8 billion) in essentially uncontrolled federal funding that Bolsonaro has agreed to allocate to elected lawmakers to increased support for his re-election bid.

Meanwhile, money will be limited for Lula’s campaign promises, including raising the minimum wage and maintaining a beefed-up 600-reais-a-month “Auxilio Brasil” social program.

Bolsonaro, who introduced the program, did not allocate enough funds to continue it in the 2023 budget.

“We cannot start 2023 without ‘Auxilio’ and a real increase in the minimum wage,” the leader of Lula’s Workers’ Party Glazey Hoffmann said on Friday.

“This is our contract with the Brazilian people.

Faced with the impossible math of financing such pledges without breaching the government spending ceiling, Lula’s allies are exploring their options, including passing a constitutional amendment allowing for extraordinary spending next year.

But they are rushing the clock: it must be approved by December 15.

Monitoring the markets

Lula, who made good on vague promises to restore Latin America’s largest economy to the golden times of his first two terms (2003-2010), faces a bleaker picture this time around.

“The challenge is … how to balance fiscal responsibility with a long-awaited social agenda,” in the face of high inflation and a possible global recession, said political scientist Leandro Consentino of Insper University.

Markets are watching closely – especially his choice for finance minister.

Lula is expected to split Bolsonaro’s economic “super ministry” into three portfolios: finance, planning and trade and industry.

Analysts predict political choices for finance minister, technocrat for planning and businessman for trade.

Names in the running for the finance post include Lula’s former education minister Fernando Haddad and his campaign coordinator Aloysio Mercadante.

COP27 stage

Other closely watched portfolios are the environment and a promised new ministry for indigenous affairs — both flashpoints under Bolsonaro, who is presiding over a wave of destruction in the Amazon rainforest.

The previous job may go to Lula’s former environment minister Marina Silva, who is credited with curbing deforestation in the 2000s.

In a key gesture, the president-elect will return to the international stage at the COP27 UN climate summit in Egypt, where he will arrive on November 14, advisers said.

Silva, who will travel with him, told Folha de Sao Paulo newspaper: “The climate issue is now a strategic priority at the highest level.”

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