Lula says that he has 80% of his cabinet "in his head"

Lula begins a mandate full of challenges in Brazil

“Make Brazil happy again”

But Lula finds himself with a country split in two, with 58 million Brazilians who did not vote for him. Two months after the elections, radical Bolsonarists continue to camp in front of the barracks to demand a military intervention.

The victory of the one who said he wanted to “make Brazil happy again” was by a narrow margin: barely 50.9% of the vote, against 49.1% against his far-right adversary Jair Bolsonaro.

Lula must also pacify relations with the Supreme Court, the pillar of Brazilian democracy, the target of harsh Bolsonarist attacks. Before taking office, the future Minister of Justice, Flavio Dino, extended his hand to the judges.

Lula’s first moves will be on the environment, education and racial equality, if he follows the recommendations of his transition team. He will also restrict gun ownership, which increased sharply under Bolsonaro.

Often popular abroad, Lula will seek to reconcile Brazil with the countries that had bad relations with the far-right.

The transition team had deplored “Brazil’s loss of prestige.” The country also owes some 1,000 million dollars to international institutions, including the UN.

The international community expects quick and forceful gestures from Lula on climate change and the environment, after the ravages of the Bolsonaro era, starting with the Amazon.

Last Thursday, he appointed an internationally recognized personality, Marina Silva, as Minister of the Environment.

“We will do everything necessary to reduce deforestation and the degradation of our ecosystems to zero by 2030,” Lula promised at COP27 last November.

However, in order to restore its credibility, Brazil will have to restore the control bodies and fight against corruption at the risk of colliding with the particular interests of agribusiness.

budget deficit

Another enormous challenge will be the economic and social situation, given that Lula’s priority is “to care for the poorest people.”

The approval by Congress of a constitutional amendment that allows him to finance his campaign promises – at least for a year – was good news.

The distribution of the popular “family bag” of 113 dollars per month to the poorest households will not be limited by the cap on public spending. Lula will be able to increase the minimum wage.

Some 125 million Brazilians suffer from food insecurity and 30 million from hunger.

However, the approved amendment “did not solve its biggest challenge in the coming years, the fiscal problem, since it will maintain and expand expenses without an expectation of income of the same measure, and with the additional challenge of doing it without raising taxes,” he anticipates. Joelson Sampaio, from the Getulio Vargas Foundation (FGV). The markets fear an explosion in public debt, which already reaches 77% of GDP.

According to Alex Agostini, chief economist at Austin Rating, the new administration must “propose a concrete and efficient fiscal control framework” to avoid “a loss of confidence that causes a domino effect in the economy”, control inflation and maintain the recovery of employment and income, in a scenario of global economic slowdown.

“Another challenge will be to maintain the drop in unemployment (currently at its lowest level since 2015, 8.3%) and control inflation, in a context of shrinking world economy,” says Agostini.

The state of the economy was one of the main concerns of the voters who elected the former metal worker to head Brazil.

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