Brazil Cabinet does a turn

RIO DE JANEIRO -- A smaller-than-expected shuffle of Brazil's Cabinet last week suggested that political turmoil could hamper President Luiz Inácio Lula da Silva's ability to introduce reforms to foster sustained, equitable growth in Latin America's biggest country.

After weeks of negotiations for a major shake-up of his executive team, Lula filled just one vacant ministry post and replaced the outgoing head of another. The decision to scale back the changes, say analysts, reflects a growing power struggle among a small but increasingly restless group of allied political parties.

Analysts also say it forebodes complexities in Lula's chances of winning support for an ambitious economic agenda that includes labor, tax, and regulatory proposals, not to mention a plan to grant autonomy to Brazil's central bank.

The Cabinet makeup ''doesn't reflect the distribution of power in the Congress," said Christopher Garman, a political scientist at Tendencias, a consultancy in São Paulo. ''The changes are going to mean a less-efficient legislative process and a slower pace of reforms."

After a humiliating defeat for the ruling Workers' Party, or PT, in Congress last month, the shuffle was expected to make the Cabinet more inclusive. Smaller parties that support the PT, a leftist party that evolved from a labor movement led by Lula in the 1970s, increasingly lambaste an administration they believe pursues its agenda without consulting those who help it wield power.

The dissatisfaction led them in February to elect a maverick conservative to the presidency of the lower house of Congress, a position that sets the body's legislative schedule. This month, as Lula studied the Cabinet changes, the parties clamored for key positions.

Instead of appeasing them, though, Lula scrapped most of the shuffle for now. Although he is expected to make more changes eventually, his decision this week further unsettled the parties.

It also gave more ammunition to major opposition blocs. With an eye on next year's presidential elections, opponents are eager to leverage the tension to amplify their criticisms.

''The shuffle reveals the PT's managerial inability," Rodrigo Maia, a congressional leader of the center-right Liberal Front Party, told Brazilian radio. ''Instead of granting more power to allies, it creates even more confusion in the Congress."

Despite the challenges, Lula remains popular among voters and enjoys a strong image abroad, mostly because of his commitment to reviving Brazil's economy. Upon taking office in 2003, he surprised supporters and opponents by shelving the far-reaching social platform that got him elected in favor of reduced government spending and a commitment to slashing foreign debt.

While the business-friendly tack cost him the support of many leftists, the policies helped revive a stagnant economy. After years of sluggish performance, Brazil's gross domestic product grew last year by 5.2 percent --the fastest clip in a decade. Unemployment is falling, consumer spending is rising, and inflation is under control.

But Lula's supporters worry that political pressure could make it difficult for the president to stay the course. The fears are echoed among the business community and foreign investors, many of whom are returning to Brazil.

A slowdown of Lula's agenda could erode their conditional support of the administration. ''The economic policies have had success, and the government needs to keep that going," said Joel Korn, a Rio-based business consultant and former president of the American Chamber of Commerce in Brazil. ''This year should be about the continuation of economic reform, not political debates."

The government dismisses the concerns. Aldo Rebelo, minister of political coordination, and the Cabinet member responsible for rallying support in Congress, said the growing pressure merely reflects Brazil's complex politics. In a country with dozens of parties and myriad social and economic tension, demands and alliances shift quickly. ''By nature, there is a certain amount of instability in Brazilian politics, and these will prove to be transitory problems," Rebelo said in a telephone interview. ''We'll still be able to build the backing we need for the government agenda."

The administration remains confident because Lula retains high approval ratings. A survey last week by the Brazilian Institute of Public Opinion and Statistics in São Paulo indicated that the political difficulties caused the government's approval rating to fall to 58 percent, compared with 62 percent in November. Lula's personal rating dropped less, from 63 percent to just more than 60 percent.