Fernando Haddad, Brazil’s next finance minister, faces an uphill struggle

Brazil’s President-elect Luiz Inácio Lula da Silva yesterday officially named Fernando Haddad as his future finance minister. It was arguably the worst-kept secret of the transition cabinet, with Mr. Haddad’s name having been tipped for the job for weeks. 

The 59-year-old academic, who holds a doctorate in philosophy, is a former São Paulo mayor with a previous spell as education minister. He comes from three electoral failures, losing races for mayor, president, and São Paulo governor in 2016, 2018, and 2022.

Mr. Haddad enjoys Lula’s utmost trust and is seen by many as his political heir, despite not having anywhere near the charisma of the center-left icon. Now he will take on a position that is unlikely to set him up for elected office in the future (finance ministers do not tend to be electorally competitive).

When Lula was arrested in 2018 and barred from running for office later that year, the former two-time president handpicked Mr. Haddad as his understudy and replacement. In that presidential race, Mr. Haddad qualified for the runoff stage but was soundly beaten by Jair Bolsonaro.

Many would argue that, given the conditions of the 2018 election and Mr. Haddad’s lack of name recognition, the mission of beating Mr. Bolsonaro was impossible to accomplish. Now, Lula has handed Mr. Haddad another tall order.

The new finance minister will be tasked with kickstarting Brazil’s sluggish economy and improving competitiveness. 

After a decade of near-zero growth, he will face a budgetary crisis, market distrust, and challenges from all sides. Inflation and unemployment are receding but remain at punishing levels. Interest rates sit at 13.75 percent following the steepest monetary tightening process in over two decades, and are not expected to come down any time soon.

The new finance minister will also have to contend with a public debt that has more than doubled in the last ten years to 78 percent of GDP, as well as dwindling foreign reserves.

A Quaest poll released on Thursday shows that Brazilians’ optimism around the economy is dwindling. By the October 30 runoff election, 75 percent of voters expected the country’s economic outlook to improve. Now, only 48 percent do so.

The same poll shows that 25 percent of voters believe the economy is...