Lula 3 can and should have non-PT economists, says Mantega

For economist Guido Mantega, the ability to mobilize a pact for democracy is the hallmark of Luiz Inácio Lula da Silva’s (PT) campaign in this second round of presidential elections.

And, ex-Minister of Finance in PT administrations —for eight years at the helm of the portfolio—, Mantega, says that the spontaneous support of colleagues from other strands, such as Arminio Fraga, Edmar Bacha, Pedro Malan and Pérsio Arida, made him happy. The gesture, he says, separates the wheat from the chaff in the democratic debate, which is what matters most at the moment.

“They are highly respected economists. They have different ideas from ours, but they really want democracy to prevail,” he says. “That’s the biggest value. Other differences and contradictions you resolve later.”

According to Mantega, this later, in an eventual Lula 3, tends to preserve the spirit of the coalition, a characteristic of the PT administrations.

“They can and should take advantage of certain economists who are outside the PT”, he says. “By the way, if you look at Lula’s governments, you will see several people from outside, who entered the government because of their competence and ability to circulate.”

Mantega, however, has no expectation of returning to government. He currently serves as a personal economic adviser to Lula, a role that brought him closer to the PT in 1993.

“As long as Lula wants, I’ll be doing counseling, but I won’t be a minister or anything like that.”

Mr. accompanies the campaign. What is your diagnosis of this second round? It is clear that there is a contrast between two candidacies. One has an authoritarian tendency, the other follows the rules and respects the Constitution.

The important part is that Democrats, from various parties, ideologies and economic visions, adhere to Lula’s candidacy. Many people who were once opposition to the PT are supporting the campaign. I think the biggest contribution that Bolsonaro made to the country was to unite Democrats, even if they have different views. A pact for democracy is being created.

like mr. Did you receive support for Lula from liberal economists, some of whom were responsible for creating the Real? I’m talking about Arminio Fraga, Edmar Bacha, Pedro Malan and Pérsio Arida, who opened the vote in a joint note. They are highly respected economists. They have different ideas from ours, but they really want democracy to prevail. Fernando Henrique’s government contributed a lot to consolidate democracy. This is the highest value. Other differences and contradictions you resolve later.

There has to be dialogue, and you can even reach common positions with these people. I was very happy to see them come together [a Lula]. This separates the wheat from the chaff.

They have nothing to do with the lowliness of Bolsonaro’s government, which I wouldn’t even call neoliberal, because neoliberals don’t deserve to be in the same bag as Bolsonaro. Paulo Guedes is not, shall we say, very savvy about economics. He makes an old economic policy. He is a neoliberal from the 1980s. But neoliberals have also evolved.

What would these positions be? common with Real economists? There are several points. The fiscal issue, for example: we are all in favor of fiscal balance. The question is how to get that balance.

But it is normal to have differences between economists. There are several economic schools, which argue among themselves. This discussion is good, because nobody owns the truth. you will discover the truth in practice, receiving criticism from your opponents.

Of course, when you’re in the political debate, you tend to highlight differences. For a long time, PSDB and PT were protagonists of the Brazilian political scene. They had to criticize themselves. One wanted to take the other’s place in, shall we say, social democracy—one a little more to the left, the other less.

Today, I would say that we have much more in common with these economists than Bolsonaro’s people. I don’t even know if you can say that they follow a liberal school. Bolsonaro does the devil. He never respected the spending limit. He runs over. He wants fiscal anarchy. He wants to do what he wants.

All of us [economistas do PT e do PSDB] we are against it and we are in the same boat from this point of view.

There was an expectation that the PT would promote a meeting with these economists. There was an initial movement in this direction, but it was interrupted. Will there be no more meeting? What happened?

I have no information. But now the campaign has entered the final stretch. Lula is very busy, holding rallies. It has become more difficult to organize these meetings, and I don’t know if there will be time. We have two weeks for the election.

These meetings can be held later. If people at this level want to collaborate and help define a program that caters to multiple interests and tastes, I think it’s good to discuss. As I said, nobody owns the truth. You will find ways. They can contribute to, let’s say, a legal result.

I think it’s totally valid that, even after the elections, when the polls are closed, that you continue to discuss with these economists.

Among the Real’s formulators, the economist closest to the campaign is André Lara Resende, the first to open the vote for Lula. In recent years, he has published texts that are considered a shift in his economic outlook. I was at a public meeting of the campaign in which he participated, and Lula’s deference to him drew attention. Is Lara Resende closer to PT? Lara Resende changed her conception of monetary policy and fits into a new international trend called MMT [sigla em inglês para Teoria Monetária Moderna].

In the past, he was in favor of a purer neoliberal politics, let’s say. Now, he thinks there was excess interest in Brazil. It’s our position too. Then, he approached a part of the PT economists.

Maybe we got our eyes hooked, waiting for references in the economy, since Bolsonaro presented Paulo Guedes as his Ipiranga post during the campaign, in 2018. However, you can say that today we don’t have PT references in the economy . Which economists represent the PT today? It is necessary to consider that Lula understands economics. I can say this with the tranquility of those who have worked with him since 1993. When he governs, he participates in all areas. At the time when I was Minister of Finance and Henrique Meirelles, president of the Central Bank, we discussed a lot, because we disagreed, and Lula actively participated.

That’s why he never did like Bolsonaro, who doesn’t understand economics — and you can tell. Bolsonaro needed someone to explain things to him.

We have many economists contributing to the campaign. We open the formulation of the program’s general lines to public debate. It’s on the internet. Aloizio Mercadante, who is president of the Perseu Abramo Foundation, appears the most, but several economists are there, participating. There are members of the coalition, but there are also those of the new allies. Proposals from Marina Silva, Ciro Gomes’ PDT and others will be incorporated.

Once the election is over, everyone will be involved in the transition and in, let’s say, detailing these well-defined guidelines.

Entrepreneurs and the so-called financial market, which brings together banks, brokers, institutions that follow economic issues, have complained about the lack of this detail now, because it makes a difference in how the economy is managed. Why hasn’t this happened yet? There is no detail because we will have to negotiate many things.

We know that the Budget that will be left by Bolsonaro does not have the resources to maintain the minimum, including Auxílio Brasil. They estimate that an additional R$ 60 billion will be needed for this. There’s no money for the Popular Pharmacy. Are we going to let people die from lack of medicine for hypertension or asthma? Only then, another R$ 2 billion is missing. No investment resources.

So, the new government will need support, and it will need a political coalition in Congress to negotiate more than R$100 billion added to this Budget — and that to do the least.

We want to give dynamism to the economy. Right now, she’s flying chicken because the government is injecting a lot of stuff so that the economy is temporarily heated. When this is over, she goes to hell.

Is it right, then, that there will be negotiation for what they call a ‘waiver’, license to spend? You will have to eliminate the current spending cap, replace it with a new fiscal anchor, and get an additional resource that goes beyond the current spending cap. With the limit that is there, you do nothing, there will be no investment, and without investments, Brazil does not grow. Public investment is important to even drive private investment. It will need, for example, from R$ 10 billion to R$ 15 billion to have the reconstruction of Minha Casa, Minha Vida [rebatizado Casa Verde e Amarela por Bolsonaro]program that is now zeroed.

It is already clear that we are going to do all this, but Congress will have to participate in the negotiations and decisions that will make a program for the recovery of the Brazilian economy viable.

Lula has already said that he does not choose the Minister of Economy before the election, but said that the holder of the position will be a political negotiator. In the face of all that Mr. he said, can we wait for someone with this profile to negotiate this agenda? The structure of Lula’s governments has always had political ministers, and teams in all ministries to negotiate with politicians. But, as we know Lula, we know that the great negotiator, who has the capacity to form consensus, is him.

But about this economy minister thing, I doubt he’s ever thought of anyone. If Lula thought, she didn’t tell anyone, not even his pillow. Even though there is no need for it now. After the election passes, he will still negotiate for the ministries. In a coalition presidentialism, other parties participate in the government. There will be negotiation. There are many actors for roles in various industries.

Certain political and economic personalities who are outside the PT should participate. They can and should take advantage of certain economists who are outside the PT.

In fact, if you look at Lula’s governments, you will see several people from outside, who entered the government because of their competence and ability to circulate. It is necessary to make an entire architecture. Roberto Rodrigues, who was Minister of Agriculture, was not a PT member at all.

What it seems to me is that the market wants to appoint the Minister of Finance. They want people there with whom they have dialogue. But it is not the finance minister who makes the economic program. He is an executor of what was defined by the candidacy. So, they can put the neoliberal minister with a card, and it will still be Lula’s policy.

The market already has the president of the Central Bank, who in my opinion is very qualified. Lula was one of the most responsible presidents in fiscal terms that we have ever had in the country. What is the terror?

What is your scenario for an eventual Lula 3? It will be a mixture of the 2008 crisis, which Lula faced, with the Dilma Rousseff government [que sofreu com uma crise política], and an adverse international scenario. It will be necessary to be very creative to recover growth, make a surplus, recover social policy and make investments.

Mr. Do you expect to return to government? As long as Lula wants, I’ll be doing counseling, but I won’t be a minister or anything like that.

X-RAY

Guido Mantega, 73

Born in Genoa, Italy, he holds a PhD in Sociology of Development from USP (University of São Paulo), where he also studied Economics and Social Sciences. Dedicated to academic life, he is the author of numerous texts and professor of Economics at the School of Business Administration of Fundação Gestulio Vargas. He joined the PT in 1980 and began his public career in the administration of Luísa Erundina in the São Paulo City Hall. He integrated the coordination of the PT’s Economic Program in the campaign of Luiz Inácio Lula da Silva for the presidency of the Republic in 1989. In 1993, he began to act as economic advisor to Lula, with a permanent presence in the party’s campaigns. With the PT in the federal government, he was Minister of Planning (2003-2004), president of BNDES in 2005 and Minister of Finance (2006 to 2014)