Mercado wanted a technical name in Planning, but sees Tebet with good eyes

The name of Simone Tebet (MDB-MS) for the position of Minister of Planning and Budget in the elected government of Luiz Inácio Lula da Silva (PT) was received with some degree of optimism by the financial market, but still far from exciting.

This Tuesday (27), Tebet decided to accept the invitation to head the portfolio, which is responsible for formulating the government’s Budget proposals and coordinating management policies.

The possibility of boosting the scope of the ministry is still being discussed by Lula, especially in relation to the PPI (Investment Partnerships Program), an important channel for interaction between the State and the private sector.

However, the information that the portfolio should not house public banks, as had been considered, discouraged the financial sector. On the afternoon of this Tuesday, the dollar rose while the stock market retreated. “It is difficult to say that this is the only factor, but I believe that this may have contributed to this key turn in the market”, says Charo Alves, specialist at Valor Investimentos.

Unlike the latest nominations for the economic team —which were viewed with reservations by market representatives—, Tebet’s name enjoys some sympathy from the financial sector.

Lucas de Aragão, a partner at Arko Advice, says that the senator is used to dialogue and is well evaluated even by people of different ideological backgrounds.

“It is a name seen with moderate optimism. The market would perhaps prefer someone from the market itself, because the expectation was created that the Minister of Planning would be a choice of the [Geraldo] Alckmin, a technical name”, he says.

However, he says, this expectation has been diminishing in recent weeks, as the names of the PT itself started to be aired for the portfolio. “Given this context, her name isn’t really an issue,” he says. “She stayed on profit.”

Aragão recalls that the coordinator of Tebet’s economic plan in this year’s presidential race was Elena Landau, who has a certain admiration from the market. The link between the two would give the senator reasonable credibility, especially in light of concerns about the fiscal responsibility of the new government.

Another important point, says Aragão, is that Tebet voted in favor of measures defended by the financial sector in Congress, such as the independence of the Central Bank, the sanitation framework and the pension reform. “It’s a name that doesn’t scare the market.”

In the opinion of Sergio Vale, chief economist at consultancy MB Associados, the name of Tebet in Planning is a great choice, especially in view of the indications seen as negative, as was the case of former senator Aloizio Mercadante for the presidency of BNDES (Banco National Social Economic Development).

For him, the management of the emedebista must follow the direction of an adjustment of expenses, while the Ministry of Finance gives indications that it will seek to increase the collection to cover holes in the Budget.

“But it won’t be able to do what we expect in terms of fiscal adjustment, administrative reform. It doesn’t seem to me that it will go that way”, he ponders.

According to Vale, it is positive that the PPI remains under Tebet’s purview, if the plan is confirmed, although this is insufficient to change the tone of the economic policy that the government indicates it wants to adopt.

“The market understood that, although there may be some technical announcement, the technicality will not override the PT’s political issues”, says Camila Abdelmalack, chief economist at Veedha Investimentos.

According to her, Tebet’s nomination for Planning is perceived as a political accommodation, since the portfolio was not among the senator’s first options. A technical name, she says, would be viewed more positively. “But that doesn’t discredit the work she can do”, she ponders.

In the opinion of Fernanda De Negri, a researcher at Ipea (Institute for Applied Economic Research), Simone Tebet is an experienced politician, knows Brasilia well and has already demonstrated her competence in several situations, including the Covid CPI.

De Negri recalls that the Ministry of Planning’ room for maneuver in terms of defining economic policy is limited. However, he says he is optimistic with the management of the portfolio, which will be responsible for Ipea and the IBGE (Brazilian Institute of Geography and Statistics).

“I welcome the nomination. The Ipea and the IBGE were very poorly cared for in this recent period”, he says.

Differences between Haddad and Tebet could become a barrier

Tebet’s name for Planning had been resisted by the future Minister of Finance, Fernando Haddad, on the grounds that the two had different views on running the economic area.

On Monday (26), Haddad even spoke with members of the MDB and made an appeal for senator-elect Renan Filho (MDB-AL) to assume the portfolio.

Rafael Pacheco, an economist at Guide Investimentos, says that Tebet’s name in Planning signals a greater balance between the ministries. Alongside vice-president Geraldo Alckmin (Industry), she would represent the liberal wing, more linked to the market, while Haddad and Esther Dweck (Management) would follow a developmental line.

“It’s a good balance, at least in theory. Tebet was a supporter of the spending cap in the campaign and the privatization of some sectors. It is indeed a name that pleases”, he says.

However, Pacheco says he is not clear about how the division of labor in the economy will occur, and he considers himself skeptical in relation to the capacity for conversation between the ministries.

Sérgio Vale, from MB Associados, believes that Tebet can make an interesting counterpoint to the Ministry of Finance, with the emedebista trying to push the discussion to a more rational side from a fiscal point of view.

The problem, he says, is that clashes can become a problem for the senator. “She’s going to be practically an isolated voice in the middle of a group of people with very similar visions”, she says. “This can generate a permanent climate of conflict and harm it.”

However, he points out that both Tebet and Haddad are politicians accustomed to dialogue and, at first, it is to be expected that the two advance on joint agendas.

“We are going to understand how this integration will be only in the next year”, says Camila Abdelmalack, from Veedha Investimentos.

Collaborated with Clayton Castelani