Brazil Privatization Secretary Quits Amid Tensions
Brasilia: Brazil’s privatization secretary Salim Mattar resigned on Tuesday, economy minister Paulo Guedes said, suggesting he was leaving the government because of the slow pace of privatizations so far, which has been affected by the coronavirus pandemic.
Guedes, who wants to privatize many state-run companies, said he still hopes to privatize state power company Eletrobras (ELET6.SA), the postal service known as Correios, the Santos Port Authority and Pré-Sal Petróleo S.A.
Guedes also addressed some legislative proposals that want to increase public spending in Brazil in light of the economic crisis, but said he firmly opposed raising a constitutional cap on spending currently in place.
Paulo Uebel, the government’s special secretary of de-bureaucratization who was charged with overhauling Brazil’s burdensome public sector with an administrative reform, also stepped down.
Uebel left because the administrative reform designed to overhaul the careers of public servants has been put on hold, the minister said, adding that the timing of the agenda is the prerogative of President Jair Bolsonaro.
Speaking to journalists Tuesday, Guedes said he understood Mattar’s discomfort. “I told him he had to fight, that there’s no point in asking for God to help,” he said outside the Economy Ministry after a meeting with lower house Speaker Rodrigo Maia and lawmaker Arthur Lira.
The departures are the latest losses for the market-friendly economic team, which was forced to put an extensive reform agenda on hold because of the pandemic. In the past two months, Banco do Brasil CEO Rubem Novaes, Industry Development Secretary Caio Megale and Treasury Secretary Mansueto Almeida have left.
The government’s focus in beefing up the social agenda and easing the tax burden has left other areas on the backburner, said Leonardo Barreto, a director at Vector Relacoes Governamentais consultancy.
“The government is facing difficulties in defining the economic agenda,” Barreto said. “There are several initiatives that were sent to Congress, but no coordination, no dialogue. That only worsened with the pandemic.”
“If the president wants to be re-elected, we have to act within our budget,” he told reporters.
At one point Guedes suggested that right-wing President Jair Bolsonaro could face impeachment if he allowed for the increased spending. He said his economy ministry would not support this measure, even if it gained traction within other parts of the Bolsonaro administration.
