Political Risk Latin America Blog @PolRiskLatam

Brazil’s president: Dilma’s first big test

Posted in News and Articles, Political Risk by politicalrisklatam on June 3, 2011

by The Economist, June 2nd, 2011.

The political wounding of Antonio Palocci, the president’s right-hand man, comes at an awkward time, when the battle to cool the economy has only just begun

The honeymoon Dilma Rousseff has enjoyed since becoming president of Brazil on January 1st has suddenly ended. She faces a modest but steady and damaging rise in inflation. She must push through unpopular measures to cool the economy and sustain growth in the medium term, and to fulfil her promise to make the state more efficient. Her vast but disparate coalition in Congress is showing the first signs of political infighting. Her difficulties are embodied in the travails of the man appointed to manage the politics of this economic balancing act, Antonio Palocci, her chief of staff.

Last month the Folha de S. Paulo, a newspaper, published confidential information showing that between 2006 and 2010, when Mr Palocci was a federal congressman, his personal wealth rose 20-fold as a result of consultancy work. Elected politicians in Brazil are allowed a business sideline. Mr Palocci refuses to give details of who paid him, or for what, on the grounds of client confidentiality. His enemies insinuate that it was not his political insights that were worth so much, but his influence and connections. His business dealings are now being investigated by the public prosecutor’s office. (continue reading… )

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