Sarney Picks New Cabinet to Fight Brazil’s Inflation, Prepare for Vote

Brazilian President Jose Sarney installed a new Cabinet on Friday with a mission to fight inflation and prepare for national elections in November.

“Fighting inflation is not incompatible with an election year,” Sarney said in an interview published here as the Cabinet changes were being made.

The ministerial team that ended its tenure Friday was named by the late Tancredo Neves, who began Brazil’s transition to democracy last year when he and Sarney, as Neves’ vice presidential running mate, were elected in opposition to the slate backed by the outgoing military regime.

As president-elect, Neves died without ever taking office, and his place was taken on inauguration day by Sarney. The Cabinet that Neves had chosen remained. Now, for the first time, Sarney has picked his own team.

During Sarney’s 11 months in office, Brazil’s economy has been booming, with a growth rate of more than 7% last year. But inflation climbed to a monthly record in January of 16.2%, and angry public reaction over price increases is the government’s major political problem.

New Test in November

The governing party coalition that ended 20 years of military rule in Brazil by electing a civilian president faces a major new test in November when a new Congress and governors of all 23 states will be elected.

In search of popularity and votes, the government, and the parties that back it, could spend more, but with the risk of higher inflation and a consequent voter backlash.

That is the main challenge facing the new ministerial team, which is drawn from the center-left Brazilian Democratic Movement party, the Liberal Front Party (PFL), and personal choices of Sarney.

On the left, Sarney chose Celso Furtado, a former minister of planning who was exiled by the military, as minister of culture. On the right, he chose Roberto Abreu Sodre, a former governor of Sao Paulo state under the military, as minister of foreign affairs.

The new Cabinet retains Finance Minister Dilson Funaro, a Sao Paulo industrialist and close friend of Sarney’s, as the powerful leader of the economic policy team.

Funaro is identified with a policy that seeks a continuing high rate of economic growth while cutting back on public deficits through increased tax revenues. Recent banking and administrative reforms have increased Funaro’s control over public spending.

10 New Faces

Sarney’s new ministerial team of 27 Cabinet-rank members includes 10 new faces and a new Ministry of Irrigation, which Sarney created to carry out a promise to irrigate 2.4 million acres in the drought-prone northeast region of the country.

Sarney also brought in Iris Rezende, the popular governor of Goias state, as minister of agriculture. Sarney has promised agrarian reform, distributing under-utilized land to peasants, while promoting food production to improve nutrition for Brazil’s 135 million people.

So far, Sarney’s promises of “social programs” have existed more on paper than in practice. With the November elections coming up, and left-wing parties criticizing the performance of the governing coalition, the pressure is growing for action programs in areas of public health, nutrition, education, low-cost housing and agrarian reform.

Sarney said that he did not want any more “public bickering” among members of his Cabinet. Sarney did not exercise much authority over the outgoing ministers, many of whom were politically powerful on their own. The new team is more personally identified with the president.

But the political rivalries that caused turmoil in the former Cabinet now have been transferred to the public competition for election in November. Sarney’s government requires majority support in Congress to maintain its present program.

This congressional support is endangered by the indiscipline of the Democratic Movement party, the coalition’s largest partner, which has left-wing sectors that are negotiating possible political alliances with the main opposition groups, including Gov. Leonel Brizola of Rio de Janeiro state and the Catholic-left Workers Party (PT).

Labor Ferment

The political opposition is accompanied by ferment in the labor unions, which are controlled by two union centrals, one dominated by members of the Communist Party and another by labor allies of the Workers Party.

Sarney and his minister of labor, Almir Pazzianotto, who was confirmed in the new Cabinet, have been trying to negotiate a pact with the unions to stabilize prices and wages.

Union demands for a voice in economic policy, as well as for wage gains and a reduced work week, are being resisted by the government and business as inflationary. But without an agreement, the unions are threatening major strikes that would be politically very dangerous for Sarney’s coalition, since this could radicalize election issues.