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New Brazil finance minister to tackle pension, labour reform

Brazil's acting President Michel Temer holds his first cabinet meeting , at the Planalto presidential palace in Brasilia, Brazil, Friday, May 13, 2016. Temer pledged Thursday to jumpstart the stalled economy and push ahead with a sprawling corruption investigation that has already ensnared top leaders of his own party and even implicated Temer himself. (AP Photo/Eraldo Peres)
May 13, 2016 - 1:34 PM

BRASILIA, Brazil - Brazil's new finance minister pledged Friday to take on even potentially thorny reforms if they prove necessary to jump-start the stalled economy, even as the country's interim President Michel Temer came under increasing fire for appointing an all-white, all-male Cabinet.

Temer, the former vice-president, temporarily assumed the top job on Thursday after the Senate voted to impeach President Dilma Rousseff, suspending her from office and abruptly ousting nearly her entire government.

The 75-year-old career politician from the economic capital of Sao Paulo pledged that hauling Brazil out of its worst recession in decades would be his first order of business, and his appointment of Henrique Meirelles, the former head of Brazil's Central Bank, was well-received by financial market.

The economy has been predicted to contract nearly 4 per cent this year after an equally dismal 2015, and inflation and unemployment are hovering around 10 per cent, underscoring a sharp decline after the South American giant had long enjoyed stellar growth.

While Meirelles pledged to take on even politically toxic reforms if his team judges them necessary — including an overhaul of the country's onerous pension system, which allows some people to retire as early as their 50s. But he was short on details.

In his first news conference, Meirelles stressed that he doesn't yet have a grasp of the scale of Brazil's financial hole and said his team needs time to understand the situation before proposing concrete measures.

Meirelles headed the Central Bank from 2003-2010, years of expansive growth based largely on the commodities boom. He expressed concern about the extent of public debt, but said he was confident the right policies would restore confidence, investment and job growth.

"This can happen relatively rapidly," he said, but added, "I'm not saying it will be six months or one month or a year."

While Rousseff was impeached on allegations her government used illegal accounting tricks to hide large deficits in the federal budget most analysts say the tanking economy played a major role in her undoing. Rousseff dismisses the charges as a pretext for a "coup without violence," saying the allegations were cooked up by foes hungry for power that they couldn't reach though the ballot box and bent on dismantling social programs that have helped pull an estimated 35 million Brazilians out of grinding poverty.

In a news conference at the presidential residence where she will continue to live through the impeachment trail, Rousseff blamed her foes for much of the economic debacle. She pointed to stonewalling that started in 2015 at the beginning of her second term and saw Congress reject her government's proposals to respond to the economic crisis.

"We, 15 months ago suffered all sorts of sabotage against our governance," she said. "There was a systematic blockage to create the proper climate for the coup."

Rousseff, Brazil's first woman president, also lashed out at Temer's Cabinet choices, saying the all-white, all-male appointees were an accurate reflection of the demographic he would be governing for — this majority non-white nation's traditional white elite.

"I lament that after a long time there are no longer women or blacks in the ministries," said Rousseff, whose own Cabinet at the start of her second term included six women, including one black woman. "I think gender questions are a question of democracy in a country where the majority, more than 50 per cent, are women."

The absence of a single person of colour has also upset many in civil society.

Frei David Santos, who directs the Sao Paulo-based Educafro organization that prepared low-income black students for college entrance exams, said it was an "affront" to the Brazil's black population — the second largest in the world, after Nigeria.

"The all-white Cabinet is a throwback to the colonial times" of slavery, he said, adding, "We represent 53.7 per cent of the population and yet we continue being shunned, marginalized and shunned by society — and all this is what Temer's Cabinet represents."

His Cabinet choices have also come under fire for including people who face serious allegations. At least nine of Temer's 22 appointees have faced or are facing allegations of corruption and other wrongdoing, including in the sprawling graft probe that saw billions of dollars syphoned out of Brazil's state-run oil company, Petrobras.

Many top figures in Rousseff's left-leaning Workers' Party were also swept up in the ongoing probe. While Rousseff herself has not been directly implicated, corruption inside her party also helped fuel widespread public anger against her, analysts say.

Temer himself has been implicated by witnesses in the Petrobras scandal, but he hasn't been charged. Former House Speaker Eduardo Cunha, another top official in Temer's Democratic Movement Party is facing charges in connection with the probe, and other top party brass are in being examined by investigators.

Speaking to the GloboNews broadcaster several days ahead of the impeachment vote, Temer defended his decision to include in his Cabinet people targeted by corruption allegations.

"What I can say is an investigation is just that, an investigation," he said.

A report in the respected Folha de S. Paulo daily Friday suggested Temer's government's survival depended on tampering down the Petrobras investigation, known as the "Car Wash" probe.

"Michel Temer must strangle the 'Car Wash' investigation or the 'Car Wash' will devastate his government," the report said.

In his first public appearance since assuming the presidency, Temer pledged Thursday investigation will continue unimpeded. "It deserves to be followed closely and protection against any interference that could weaken it," he said.


Associated Press writer Jenny Barchfield reported this story in Brasilia and AP writer Mauricio Savarese reported from Rio de Janeiro. Stan Lehman contributed to this report from Sao Paulo.

News from © The Associated Press, 2016
The Associated Press

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