Brazil | Newsmakers
Joaquim Levy, Brazil’s newly appointed minister of Finance, will need to muster all his skills to navigate the rough waters of Brazilian domestic politics and restore the public budget surplus that made the country a darling of Wall Street investors.
For president Dilma Rousseff, who faces the daunting task of trying to regain investors’ confidence, appointing a new economic cabinet was one of her toughest calls. She had to announce a team that was both able and convinced of the need to restore fiscal discipline, while not disappointing voters.
Along with Levy, an economist, she named Nelson Barbosa as head of the Planning and Budget Ministry and promoted Alexandre Tombini, former deputy governor of the Central Bank of Brazil, to governor.
Levy has worked in the research department of the International Monetary Fund and at the European Central Bank. In January 2003, under the first presidency of Lula da Silva, he became secretary of the National Treasury, serving in that position until March 2006. Most recently, he joined Banco Bradesco, first as chief strategy officer, then, since January 2012, as CEO.
“Market participants have received such a team with satisfaction, since they are seen as capable and inclined to practice orthodox policies, both fiscal and monetary, leaving more room for market-driven adjustments in the exchange rate,” says José Francisco de Lima Gonçalves, economics professor at São Paulo University and chief economist at Banco Fator.
Levy’s and the rest of the economic team’s task will not be easy. “It will be necessary to change the tires while driving,” said Gonçalves. “I expect them to show the way.”
Given the team’s strong economic credentials, markets may give them the benefit of the doubt for several months. In the meantime, Levy will have to draw on all his abilities, including his BA in naval engineering, to help Brazil’s ship navigate treacherous waters.