Brazil’s cabinet reshuffle signals growing disapproval towards President Jair Bolsonaro

As April progresses, a series of major political events that occurred throughout March will surely impact the next weeks and months. 

On Monday, March 29 2021, President Jair Bolsonaro announced the substitution of no less than six strategic ministers (of a total of 23): Foreign Affairs (Itamaraty), Defense, Chief of Staff (Casa Civil), Government Secretary, Justice, and Federal Attorney General. It is still unclear the exact date when Mr Ernesto Araújo would be asked to resign from the Ministry of Foreign Affairs.

Media and political analysts have put forward several reasons for this change: retaliation for not showing enough support (Defense and Attorney General); necessity, in the face of poor performance and external criticism (Foreign Affairs); willingness to gather trusted and obedient staff (Chief of Staff and Justice); and a gesture to political allies in the National Congress (Government Secretary). 

Then, on the morning of the following day, the commanders of the Army, the Navy and the Aeronautics presented their resignations. This move echoed as an even greater crisis, in a context of a growing politicization of the Armed Forces, and on the eve of the 57th anniversary of the military coup of 1964 when a few thousand supporters of President Jair Bolsonaro would march around the country in favour of military intervention. March 31 is always tense in Brazil, even though the large majority of the population does not remember the date or gives very little importance to it. 

Whatever the real motives, this cabinet reshuffle occurs in a challenging context for President Jair Bolsonaro: 

• March was the deadliest month since the beginning of the pandemic, exceeding for the first time – and on several occasions – the mark of 3,000 daily reported deaths. On March 31, there were 3,950 reported deaths resulting in a total of more than 60,000 deaths for March 2021 alone. 

The Ministers of Health and Foreign Affairs were particularly criticized for their inability to deal with the situation; the former, in the implementation of effective national health response, and the latter in the negotiations for emergency importation of vaccines. 

• New lockdowns were announced by State governors and city mayors around the country, in an attempt to contain the escalating spread of Covid-19 and try to curb the saturation of public and private hospitals. 

Jair Bolsonaro, who has always been against such restrictive measures, asked the Supreme Court (STF) to reverse these measures, but his action was early dismissed. The lawsuit was filed on behalf of the President himself, as it is said the Federal Attorney General refused to sign the initial submission. 

This has caused the Federal Government to propose a bill – just approved by the National Congress (Federal Act No. 13.982, of April 2) – that reinstates the emergency financial assistance to the most vulnerable for another three months. This comes in addition to other measures taken earlier in March: 

• On March 23, President Jair Bolsonaro officially appointed Marcelo Queiroga (a cardiologist) as Health Minister, to replace Eduardo Pazuello (a General of the Army), under investigation of the Federal Prosecutor’s Office for his possible responsibility for the collapse of the national public health system. 

• On March 24, President Jair Bolsonaro announced the creation of the National Coordination Committee to Cope with the Covid-19 Pandemic. No such organ had been constituted until then to coordinate the actions of the different layers of government. 

• These past weeks, President Jair Bolsonaro made his first public statements in favour of vaccination and announced vaccine purchases by the Union in coordination with the States. 

These moves were seen as a gesture towards public opinion as well as an attempt to secure the support of the so-called “Centrão” (centre-right political parties), increasingly critical of the president’s handling of the crisis. The President of the Lower House (Câmara do Deputados), Arthur Lira, recently elected thanks to the support of President Jair Bolsonaro, has shown the limits of his support and demanded concrete action. In the Senate, the tensions crystallized around Ernesto Araújo’s “disastrous” performance at Itamaraty, and a public clash with Senator Kátia Abreu, president of the Foreign Affairs Commission. 

March was also the month of final discussion of the Federal Budget for 2021 at the National Congress. From this standpoint, the growing criticism from the Centrists may well be just a way to get additional concessions in the allocation of public funding. Indeed, the final draft includes an allocation of BRL 7.3 billion in expenditures that congress members may discretionarily award to any State or Municipality. 

Regardless of the motives, Jair Bolsonaro is still without a party, which is an obstacle in his trade with the National Congress and the perspective of a national campaign for reelection. Without the support of the Centrists, he does not have a sufficient base in the Lower House, and this support comes with a price. 

These moves have not been in vain: in an interview for a national weekly magazine published on April 2, the President of the Senate and of the National Congress called for national unity and against the use of the pandemic for political purposes. 

All this has happened in a very particular political context: in two decisions of March 8th and March 23rd, the Supreme Court ruled in favour of former President Luiz Inácio (Lula) da Silva and quashed previous decisions that had convicted him for bribery as part of the Operation Car Wash – the criminal investigation launched in 2014 that has dismantled a sprawling system of corruption.

These decisions were rendered on procedural grounds, not on the merits, and judicial proceedings now restart before the competent court in Brasilia. Still, until a new conviction, Lula is free to run for next year’s presidential elections. While his rejection rate remains high, it is an earthquake in the run-up to next year’s presidential elections.

Yet, this tense background seems not to have weighed on the economic perspectives for Brazil: stock markets had in March their best result since the beginning of the year (+6% for Ibovespa, the reference index), and the OECD just raised the projection for the growth of the Brazilian GDP in 2021 to 3.7% (from 2.6% in the December estimate). This can be explained in a number of ways: 

• The perspective of the “Infra Week”: between April 7^th and April 9^th, the Federal Government will put on bid 22 airports, 1 railroad and 8 maritime ports, for an expected overall amount of BRL 10 billion. This event is the continuation of the policy of privatization and concession to the private sector initiated in 2019, which has already completed 40 projects. 

• The enactment on April 1st 2021, of a new Act on Public Procurement, that revises and consolidates the applicable rules and processes. 

• The enactment, on March 29^th, of Provisional Measure No. 1.040 on the simplification of the process for opening businesses, the protection of minority shareholders, the facilitation of foreign trade, and the Integrated System for Asset Recovery, namely. This measure was adopted for the express purpose of moving up in the World Bank’s Doing Business ranking. 

• The adoption, on March 26^th, of the Federal Budget for 2021, including a cut of BRL 30 billion in public spending to remain within the limits set in the Federal Constitution. This is indicative of the willingness of the Federal Government to keep control over public expenses, which is not so common in Brazil. 

• The passing, on February 24^th, of Complementary Law no. 179 on the autonomy of the Central Bank, with the primary purpose of ensuring price stability. 

• The Brazilian Real (BRL) continues to be very low, which is positive for exports, especially agri-food and commodities, important for the Brazilian economy. 

Other reforms and economic bills are underway, which Congress should not oppose. It is in the common interest of all. However, it may be less cooperative in other areas, thus justifying the special attention of the head of state.