Brazil development bank chief quits, fueling political crisis

Rio de Janeiro (AFP) –


The head of Brazil's powerful state development bank quit Sunday a day after far-right President Jair Bolsonaro threatened to sack him, fueling a political crisis engulfing the government.

BNDES president Joaquim Levy, a Chicago-educated economist and former finance minister in the left-wing government of ex-president Dilma Rousseff, submitted his resignation to Economy Minister Paulo Guedes after Bolsonaro said he had a "price on his head."

Levy's sudden departure follows a tumultuous week for a government less than six months into its term, in which Bolsonaro fired his third minister, retired general Carlos Alberto dos Santos Cruz, who had clashed with Bolsonaro's sons, and then sacked the head of Brazil's postal service.

Justice Minister Sergio Moro also has faced calls for his resignation after an investigative website published leaked documents showing he collaborated with anticorruption prosecutors to keep leftist icon Luiz Inacio Lula da Silva out of the 2018 presidential race, which he was expected to win.

On Saturday, Bolsonaro once again defended Moro against allegations of wrongdoing, but added he did not have "100 percent" confidence in the former judge, who is seen by many Brazilians as a hero and is a key member of Bolsonaro's cabinet.

Moro handed Lula his first conviction in 2017, ending both his hopes of contesting the election and decades of center-left rule in Brazil.

Bolsonaro had threatened on Saturday to dismiss Levy, who had served as treasury secretary under Lula, over the appointment of an official to BNDES who has links to the left-wing Workers' Party.

"Government is like this, it can't have suspicious people" in important positions, Bolsonaro told reporters.

"I told him (Levy) to dismiss this guy (Marcos Barbosa Pinto) on Monday or I would fire him, without going through Paulo Guedes."

Levy was appointed by Guedes, who is spearheading the government's economic reform agenda, including an overhaul of Brazil's bloated retirement system that has met with strong resistance from trade unions and a hostile Congress.

A general strike called by unions on Friday paralyzed public transport in many cities as thousands of protesters took to the streets against the pension proposal and the government's planned education spending cuts.

A pared-back draft of the pension reform presented to Congress on Thursday -- which reduces expected savings from 1.2 trillion reais ($300 billion) in 10 years to around 900 billion reais -- sparked an angry exchange between Guedes and Rodrigo Maia, speaker of the lower house of Congress with whom the Bolsonaro government's relations were already frayed.

Guedes, who has threatened to resign if the bill is not passed or is watered down too much, said lawmakers were threatening to "abort" the pension reform and had shown "there was no commitment to future generations."

Maia fired back that the government was a "crisis factory."