Brazilian President Dilma Rousseff plans to reduce the size of her government as part of a plan to shore up support from key allies.
The goal is to shut down as many as 10 ministries, sell properties and reduce the number of posts filled by the government, Planning Minister Nelson Barbosa told reporters Monday in Brasilia.
The move follows calls by members of her ruling coalition for the government to go beyond unpopular tax increases and welfare spending cuts by trimming the size of the government, which has 39 ministries and appoints about 22,000 officials.
The decision “is a response to the opposition and part of her allies to show the government is willing to bear part of the burden,” said Joao Paulo Peixoto, a political science professor at the University of Brasilia.
Brazil has more ministries than any of the world’s 50 largest economies, according to Augusto Franco, director of consulting firm Casasemquina Assessoria e Consultoria. Brazil is trailed by South Africa, Indonesia and Egypt, which have 35, 34 and 33 ministries, respectively. Franco is former director of Rio de Janeiro-based industry group Firjan.
While the move is symbolic of the willingness to shoulder its share of national austerity measures, the impact in the budget will actually be small, Peixoto said. The budget gap in June widened to 8.1 percent of gross domestic product, the largest since November 1998, as an economic slowdown eroded tax revenue.
In addition to reducing the number of ministries, the reform plan, to be finalized by next month, will also cut costs within ministries for cleaning and maintenance contracts and combine some secretariats and agencies.
“To create the best target from an administrative point of view, from a point of view of political support for the government and efficiency of the public apparatus, we need to hear from all those involved,” Barbosa said.
During her re-election campaign last year, Rousseff criticized the plans of her main opponent, Aecio Neves, to cut the number of ministries to between 21 and 22.
The about-face aims to demonstrate that the government accepts the need to submit to its own unpopular measures, said Raul Velloso, director of Brasilia-based ARD Consultores Associados.
“They decided to pay the political price and provide a response to what’s been said -- that the government doesn’t cut its own fat.”