Antonio Delfim Netto, one of the most ubiquitous characters in Brazil's recent economic history, has some advice for the incoming government of Jair Bolsonaro.
Mr. Bolsonaro, who will begin his term as president Jan. 1 with strong popular support, should be humble in his dealings with Congress, according to the 90-year-old former finance minister and long-time economic adviser to the country's top politicians. The president-elect's strategy of not distributing cabinet seats to potential allies in Congress is seen as potentially risky by investors, who worry the government won't get enough support to pass reforms Brazil needs to fix its fiscal accounts.
Much like investors, the first item on Mr. Delfim's list is an overhaul of the pension system. He said Mr. Bolsonaro should push forward with the proposal already in Congress and is against splitting the bill into several votes, as was reportedly discussed by the economic team, calling the idea "disappointing."
"If the government doesn't get rid of that weight, doesn't show people that it will make it happen, the great expectations of today will sour," Mr. Delfim said in an interview at his Sao Paulo office. He added the honeymoon period of the new government should last seven to 10 months. "The private sector will retreat if there's no reform."
As finance minister from 1967 to 1974, Mr. Delfim was behind what became known as Brazil's economic miracle, when the economy expanded at an average annual clip of 10%, still the fastest on record. He also acted as agriculture and planning minister in the final years of the 1964-1985 military dictatorship, helping negotiate the restructuring of the nation's foreign debt.
The proposals of incoming Economy Minister Paulo Guedes will reorganize the state in a revolutionary way, putting an end to 20 years of policy that left the state bloated, Mr. Delfim said. While Brazil tamed inflation, it also killed growth with high interest rates, and it's time for a change. Even with no clarity on certain proposals, the new government deserves a vote of confidence and there is "no reason" to say Mr. Guedes' ideas won't work.
"We have to give him a chance to experiment, it's worth it," he said.
Although Mr. Delfim repeatedly called for trust in the new government, there are some proposals he's less enthusiastic about. The former minister said ending the Labor Ministry — which will have its attributions divided among the ministries of Justice, Economy and Citizenship — is something that should be done carefully so it doesn't completely strip workers' power. He also criticized mixing politics with religion (a frequent theme with Mr. Bolsonaro, starting with his campaign motto "Brazil above everything and God above everyone") and some of the socially conservative agenda defended by Mr. Bolsonaro's allies on matters from rights of the indigenous population to ideological bias in education.