Communist Governor Struggles to Satisfy Hopes

11/03/2015 - 10h57

The Palace of Lions, which commands São Luis, the colonial era capital of Brazil's north-eastern Maranhão state, from a bluff overlooking the sea, has seen many invaders come and go in its 400-year-old history. But none quite like its latest conqueror, new state governor Flávio Dino.

The Communist party of Brazil politician vanquished in elections last year one of Latin America's longest running political dynasties, the Sarney family. With its members having occupied some of the most powerful political positions in the state and Brazil over five decades, the family had become a seemingly immovable part of the country's traditional oligarchy.

But now, 10 months into his four-year term, Mr Dino is facing an arguably bigger challenge - how to fulfil his election promise to lift the fortunes of Brazil's second-poorest state even as the country suffers its worst recession since the 1930s.

"Our [the state's] fiscal situation remains stable and we believe that next year should be less negative for Brazil," Mr Dino, a former judge, tells the Financial Times in the palace's boardroom, whose air-conditioning provides relief from São Luis's searing tropical sun. "But if the economy gets even worse, that's when there could be a problem."

With Brazilian national politics in turmoil thanks to policy paralysis and the economy set to sink 3 per cent this year, Mr Dino's victory is an illustration of the desire for positive and clean governance among voters disenchanted with corruption and poor services, analysts say.

As in Maranhão, Brazil's ruling coalition led by the Workers' party, or PT, is facing political exhaustion after nearly 13 years in power, bogged down by a corruption scandal at state-owned oil company Petrobras. The opposition parties, meanwhile, rather than forging new ideas are sabotaging a much-needed government austerity programme to balance Brazil's budget and restore the conditions for growth.

"Brazil is immersed in a three-dimensional crisis - political, economic and ethical," wrote former central bank governor Carlos Langoni in a report, the Brazil Memo.

In contrast to the negative politics at national level, Mr Dino in his election campaign last year sought to unite the opposition by setting aside ideological differences - his vice-governor is from the pro-business PSDB party - and winning over voters with a programme to tackle poverty and economic stagnation in the state. He also came with an updated view of leftist politics in Brazil - acknowledging the importance of the private sector to generate wealth.

"He is pro-market," said Ricardo Zimbrão Affonso de Paula, economist at the Federal University of Maranhão.

The obstacles facing him are considerable, not least because the Sarney dynasty and its allies remain entrenched. They control the main newspaper and television station. Roads, bridges and cities bear their name. A museum in São Luis's Unesco World Heritage-listed late-17th century historical centre boasts a giant bust of family patriarch José Sarney.

The heavily moustachioed 85-year-old was Maranhão state governor in 1966, president of Brazil in 1985, and until recently head of the senate. His daughter Roseana, meanwhile, has served four terms as Maranhão governor, her last ending in 2014.

The family declined to be interviewed but claims to have attracted R$130bn ($34bn) in private investment to the state, mostly in big aluminium, oil, pulp and port projects. Critics argue the Sarney family's bet on big industry did not alleviate poverty. Maranhão's United Nations human development indicators, or HDIs, are the second-worst in Brazil.

To combat this, Mr Dino said he was introducing programmes such as "More HDI", bringing fresh water supplies to the state's 30 least developed towns, as well as "More Asphalt", which will seal roads in the interior. There are plans to build seven regional hospitals by next year, 300 new schools, and recruit police to combat a 330 per cent increase in the murder rate. Mr Dino says he saved R$68m in palace expenses just by cutting champagne, caviar and lobsters at state banquets and reducing gubernatorial security by half.

"I voted for him because he is new," says Maria Ferreira, a maid begging for lunch money near the Palace of Lions. "Maybe he can do something. The Sarneys did nothing."

Copyright The Financial Times Limited 2015