Brazilian president Dilma Rousseff has cut her own salary by 10%, slashed eight ministries and reshuffled her cabinet in an attempt to ward off an escalating political and economic crisis.



The shakeup, which comes less than a year after she formed a second-term government, is designed to stave off an impeachment threat in Congress and a collapse of investor confidence.

Rousseff said the reshuffle would “guarantee the political stability of the nation” and “strengthen relations between the parties and members of parliament who support the government”.

Mauro Rochlin, an economist at the Getúlio Vargas Foundation, said the savings were minuscule compared to the necessary cuts of 30bn Reais.

“The government wants to show that they are willing to cut their own flesh,” he said. “But this is a drop in the ocean. The value of this is symbolic.”

Many on the left recognise that Brazil’s bureaucracy, which saw the addition of thousand of commissions during the boom years, is bloated, though they oppose austerity.

“The government has become big and foolish, and lost its management capacity. So from that point of view, this change is very welcome,” said Luiz Gonzaga Belluzzo, an advisor to former president Luiz Inácio Lula da Silva. “This is the start of an improvement in the quality of the state.”

But the new measures highlight the weakness of a president who is faced by a hostile Congress, an unhappy public and a punishing financial climate.

Despite the overall reduction of ministries from 39 to 31, Rousseff has given an extra post to centre-right coalition partner PMDB (the Portuguese acronym for Democratic Movement Party of Brazil), which is now more dominant than ever in both the Cabinet and Congress.

This is evidently an attempt to fend off an ouster vote, which has been repeatedly threatened by the Lower House speaker Eduardo Cunha and would require a two-thirds majority.

Even if this is averted, the president has a host of other headaches.

The administrative reforms and 10% pay cut for all ministers are designed to show the government is sharing a little of the fiscal pain that has been imposed on voters in the form of cuts to healthcare and housing programs.

But they are unlikely to make much of a difference to a budget shortfall that led last month to Brazil’s sovereign debt rating being cut to junk status.



A sceptical public also need far more convincing that Rousseff has the answers to the nation’s growing problems. Close to a million jobs have been lost in the past year as the economy has slipped into recession thanks to falling global commodity prices, weakening domestic demand and a massive corruption scandal that has hit the nation’s biggest company Petrobras and dozens of other major firms.



The president’s popularity is at rock bottom. Last month, a poll by Ibope showed she has support from only 10% of the public.