Global Insight Perspective

Significance

The new ministers sworn in yesterday bring to 12 the total number of new appointments made over the past three weeks; one more is expected next week.

Implications

The reaffirmation of heavyweights such as Chief of Staff Dilma Rousseff and Finance Minister Guido Mantega represents continuity for President Lula's second term, while the increase in the number of posts for the Brazilian Democratic Movement Party (PMDB) is indicative of that party's stronger position in Congress following the 2006 elections.

Outlook

President Lula's second term has got off to a slow start and he will need to act more decisively in order to take advantage of his relatively strong position in Congress while it lasts.

President Swears in Five More Ministers

Luiz Inácio Lula da Silva appears to have almost completed his long-awaited cabinet reshuffle with the swearing in of five new ministers yesterday. Carlos Lupi of the Democratic Labour Party (PDT) took over as Minister of Labour from Luiz Marinho of the Worker's Party (PT) who was moved to the Ministry of Social Security; Alfredo Nascimento of the Republican Party (PR) took on the Transport portfolio; and Franklin Martins was sworn in as Minister for Social Communication. Meanwhile, Miguel Jorge took over as Minister of Development, Industry, and Trade—a post held by Luiz Fernando Furlan since the start of President Lula's first term in January 2003. In his speech to mark the swearing in of the new ministers, President Lula called for further pension reform and the adoption of a new mechanism to calculate the social security deficit. He also announced plans to set up a new state television channel.

The announcement of the cabinet reshuffle was repeatedly delayed following President Lula's re-election in October 2006 and the changes when they finally did come have been made in installments over a three-week period (see Brazil: 16 March 2006: President Begins Slow Reshuffle of Brazilian Cabinet). According to local press reports, one more appointment is expected to be made next week: the swearing in of Pedro Brito of the Brazilian Socialist Party (PSB) as National Secretary of Ports, a newly created post that takes away responsibility for supervising ports from the Transport Ministry. Including Brito, 13 new appointments will have been made.

New Appointments

Justice Minister: Tarso Genro (PT)

Health Minister: José Gomes Temporão (PMDB)

Minister of National Integration: Geddel Vieira Lima (PMDB)

General Advocate of the Union: José Antonio Toffoli

Tourism Minister: Marta Suplicy (PT)

Ministry of Institutional Relations: Walfrido dos Mares Guia

Agriculture Minister: Reinhold Stephanes (PMDB)

Minister of Labour: Carlos Lupi (PDT)

Minister of Social Security: Luiz Marinho (PT)

Transport Minister: Alfredo Nascimento (PR)

Minister for Social Communication: Franklin Martins

Ministry of Development, Industry, and Commerce: Miguel Jorge

National Secretary of Ports: Pedro Brito (PSB) (to be confirmed)

Outlook and Implications

The reshuffle is the culmination of several months of intense negotiations with party leaders. Not only has Lula had to try and accommodate the 11 parties that make up his governing coalition, but he has had to weigh up the impact of particular nominations on interest groups within individual parties and the broader implications for the unity of the coalition.

The most significant outcome of the reshuffle has been a strengthening of the PMDB's presence in the government. The number of ministerial posts held by that party has been raised from two to five. This is a reflection of the PMDB's stronger position in Congress following the October 2006 elections and its status as the party in the governing coalition with the largest number of seats in both the Senate and the Chamber of Deputies. By President Lula's own admission a government dominated by “friends” as in his first term was not necessarily the most effective strategy for keeping more reluctant allies on board and the fact that two of the new appointments actually opposed the government in Lula’s first term represents a new approach. However, for the most part, the changes that have been made have not been large ones, with key figures such as the president's Chief of Staff Dilma Rousseff and Finance Minister Guido Mantega retaining their seats.

The cementing of the formal alliance with the PMDB, the recent election of allies to preside over both houses of Congress, and the inauguration of a new Congress in which coalition parties hold more than half of the seats in each house mean that President Lula is in a stronger position than he was towards the end of his first term. However, apart from the announcement of a new economic growth package, Lula has accomplished little in the first three months of his new term.

Now that the new cabinet line up is almost complete he will be under increased pressure to resolve other problems, not least the crisis facing the country's airports. Pro-government allies recently defeated an attempt by the opposition to set up a congressional inquiry (CPI) into the crisis, but the problem refuses to go away. There have been suggestions that the opposition may make a fresh attempt to set up a CPI in the Senate, while a petition organised by legislators in favour of an inquiry has collected 20,000 signatures in the past few days.

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