Brazil’s Annual Budget Planning Season

By Ben Tavener, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – As Brazilian President Dilma Rousseff summoned her government to the annual ministerial meeting on Monday to take stock of the past year, and set out plans and goals for 2012, she must have been only too conscious of the balancing act her government will have to perform this year with keep the economy booming, the populace spending and public services improving.

The full cross-ministerial meeting, the second since President Rousseff took office last year, was attended by 34 ministers, Brazil News

The full cross-ministerial meeting, the second since President Rousseff took office last year, was attended by 34 ministers, photo by José Cruz/ABr.

Although fiscal tightening is expected this year, ministers were quick to play down rumors of swingeing cuts, and the president reminded reporters that budget cuts would not form part of the meeting’s agenda.

After spending four days in “intense meetings” with ministers from all governmental departments, President Rousseff asked ministers to come up with a list of departmental priorities.

They were also asked to look at where cuts could theoretically be made, as the president needs to press on with her planned spending cuts, without compromising the country’s economic growth.

Speaking at the ministerial meeting, Finance Minister Guido Mantega said that average growth for the year would be “above four percent”, bolstered by growth in the jobs market, strong local development and foreign investment.

“[Brazil] will be one of the few countries in the world to grow more this year than the last, despite unfavorable international conditions,” he said.

Some are betting on as much as 4.5 percent growth in the country’s GDP in 2012 which, although better than the 2.9 percent estimated growth that 2011 provided, is a far cry from 2010 when the economy surged over seven percent.

The largest budget cuts – some expecting to be between R$32 billion and R$60 billion - will be left until later in 2012, to prevent stifling the economy in the first two quarters, and ministers have dismissed rumors that cuts could total R$70 billion.

Budget cuts form part of the general budget report, which should be presented at the end of January to explain how Brazil’s 2012 federal budget – estimated to total R$2.257 trillion (US$1.29 trillion), around R$187 billion more than in 2011 – will be allocated.

Communications Minister Paulo Bernando, photo by Valter Campanato/ABr.

Minister Paulo Bernando dismissed rumors that R$70 billion in cuts would be made, but said "contingency plans are like Carnival: we have one every year in February," photo by Valter Campanato/ABr.

The government also recently announced that it expects to include another 320,000 families on the Brasil sem Miséria (Brazil without Misery) program in 2012, adding to the 400,000 families were registered on the government’s flagship social program in the past six months.

Aside from the country’s budget, one of the biggest changes announced at the meeting was that all government programs must, within six months, be able to be monitored online, preferably in real time.

Hailed a “revolutionary, progressive and indispensable design” of state reform by the government, some commentators are saying the step is likely, at least in part, to have been made in light of the string of ministerial scandals that blighted Dilma’s first year in office.

The president called the changes part of the movement which, she hopes, will bring millions of Brazilians into the middle class, and at the same time force public services to operate more transparently.

Despite the recurring corruption scandals leading to the resignation of seven ministers in 2011, a recent poll by Datafolha shows President Rousseff is more popular than Lula was in either of his first terms, or indeed in comparison with any other president’s first term since the country’s democratization.

Fifty-nine percent of those surveyed said Dilma was doing an “excellent” or “good” job, up ten points on six months ago, according to Folha de São Paulo newspaper.

4 Responses to "Brazil’s Annual Budget Planning Season"

  1. Pingback: Brazil Politics & Government News « Brazil Weekly

  2. Antonio  January 28, 2012 at 8:23 AM

    Trim the public service, rationalise procedures, flatten organisational structures, hold people more accountable,impose heavier penalties for corruption, and reduce bureaucracy. Brazil may be the sixth largest economy in the world but it ranks around 126 (out of 183) in terms of the ease of doing business. That represents a massive cost to the country and to business. For example, the cartorio procedures for validation of copy contracts etc etc. Other countries survive without this process. It is a significant cost creator and adds no value to the process.The liability and responsibility for copies still rests with the originator so why have this impost? The amount of duplicated paperwork here is mind boggling compared with other countries. Check for understanding – Brazil has slipped from 120 to 126th so it is going backwards in terms of ease of doing business. It’s a great country with a heavy bureaucratic yoke around its neck.

  3. Pingback: Finance Ministry Guido Mantega Manages Denucci Scandal | The Rio Times | Brazil News

  4. Pingback: President Rousseff's Last Televised National Address of 2013: Daily Update | The Rio Times | Brazil News

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