VZCZCXRO7421
RR RUEHRG
DE RUEHBR #1251 1731308
ZNR UUUUU ZZH
R 221308Z JUN 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 5849
INFO RUEHRG/AMCONSUL RECIFE 5007
RUEHRI/AMCONSUL RIO DE JANEIRO 2329
RUEHSO/AMCONSUL SAO PAULO 7253
RUEHAC/AMEMBASSY ASUNCION 5518
RUEHBU/AMEMBASSY BUENOS AIRES 4113
RUEHMN/AMEMBASSY MONTEVIDEO 6336
RUEHSG/AMEMBASSY SANTIAGO 5598
RUEHME/AMEMBASSY MEXICO 2006
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDO/USDOC WASHDC
RHEHNSC/NSC WASHDC

UNCLAS BRASILIA 001251 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NSC FOR FEARS 
TREASURY FOR OASIA - DAS LEE, D.DOUGLASS 
STATE PASS TO FED BOARD OF GOVERNORS FOR ROBITAILLE 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA 
STATE PASS USAID FOR LAC 
 
E.O. 12958: N/A 
TAGS: EFIN ECON EINV PGOV PINR BR
SUBJECT: BRAZIL: THE FINANCE MINISTRY'S NEW ECONOMIC POLICY 
SECRETARY 
 
 
SIPDIS 
 
REF: A) Brasilia 0665  B) Brasilia 1036 
 
¶1. (SBU) Finance Minister Guido Mantega named Sergio Gomes de 
Almeida to be his Secretary for Economic Policy on May 22.  Almeida 
filled the last policy-level vacancy in the Finance Ministry team 
left after Mantega's late-March appointment.  A PhD economist and 
former executive director of the Institute for Industrial 
Development Studies (IEDI), Almeida replaced Bernard Appy, who moved 
up to serve as Executive Secretary (Vice-Minister equivalent). 
Almeida's portfolio focuses primarily on promoting the economic 
reform agenda necessary to achieve higher rates of sustainable 
growth.  Due primarily to the political crisis sparked by recent 
scandals, his predecessor proved unable to move significant reforms 
through Congress.  Almeida told visiting OPIC CEO Robert Mosbacher 
Jr. on June 7 that the Minister had asked him to focus in particular 
on how to make viable greater investment in infrastructure 
development and housing. 
 
¶2. (SBU) Almeida is the only senior appointee Mantega has brought to 
the Ministry who is publicly identified with the more 
interventionist school of economists in Brazil, centered at the 
University of Campinas in Sao Paulo state.  This group is popularly 
referred to as the "desenvolvimentistas" (literally, the 
developmentalists).   Almeida publicly has defended the promotion of 
industrial development through interest rate cuts.  During a 
previous job at an industrial policy think tank, he oversaw 
publication of a study criticizing current exchange rate policy as a 
cause of the "collapse" of Brazilian export competitiveness. 
 
¶3. (U) Almeida is one of only two new faces appointed by Mantega to 
the senior-level Finance Ministry team.  The other, Citibank and 
BNDES alum Carlos Kawall, replaced Joaquim Levy as Treasury 
Secretary.  As noted above, Appy moved up to replace Executive 
 
SIPDIS 
Secretary Murilo Portugal.  The rest of the team, including 
 
SIPDIS 
International Secretary Luiz Pereira, Revenue Secretary Jorge Rachid 
and Economic Monitoring Secretary Helcio Tokeshi, remained in place. 
 
 
¶4. (SBU) Comment:  While some initially saw Almeida's nomination as 
a sop to Sao Paulo industry or a worrisome sign of the rising 
influence in the GoB of the so-called developmentalists, Almeida 
does not fit easily into that mold.  During his extensive discussion 
of Brazilian real estate markets with OPIC CEO Mosbacher, for 
example, Almeida freely acknowledged the GoB has strict budget 
constraints and said his emphasis was on finding ways to harness 
private sector energies to the task of infrastructure and housing 
development.  Whatever his personal views, given political scandal, 
the World Cup and the ongoing presidential campaigns, Almeida likely 
will prove every bit as unsuccessful as his predecessor in getting 
major reforms through Congress prior to the inauguration of the new 
Administration in January 2007.  End Comment. 
 
ALMEIDA BIO INFORMATION 
----------------------- 
 
¶5. (U) Julio Sergio Gomes de Almeida is a 54-year-old economist from 
Rio de Janeiro.  He holds a doctorate in economics from the Federal 
University of Campinas (UniCamp) in the state of Sao Paulo. Prior to 
serving at IEDI, he worked on the National Council for Space 
Research in the Ministry of Science and Technology.  He also was 
member of the Committee for Industrial and Technology Policies at 
the National Confederation of Industries (CNI).  Prior to that, 
Gomes de Almeida worked as a consultant for the National Social and 
Economic Development Bank (BNDES) as well as for the United Nations 
Development Program (UNDP).  As IEDI Executive Director, Gomes de 
Almeida was known to be a critic of the Central Bank's monetary and 
exchange rate policy. It was under his coordination that IEDI 
published a study titled "The Collapse of Export Competitiveness", 
which emphasized exporter losses due to the strong Real. 
 
CHICOLA