Top 3 predictions for Brazil in 2016

These are shaky times in Brazil, but I believe it is fairly reasonable to believe that these predictions will stand the test of time. Of course everything can change if revelations emerge sometime this year.

1 – President Dilma Rousseff will not be impeached.

What I wrote in July still stands. Then I said there were more than 10 reasons why Rousseff’s impeachment was so unlikely. And there are some new motives too.

The first new reason is political: the opposition is far from the two thirds of 513 deputies needed to send the final impeachment decision to the Senate. Even if that number is reached, it is hard to believe that the president will lose at the Senate. Rousseff’s key victory came in an alliance with the president of the Senate, Renan Calheiros, who has worked as a counterweight to lower house speaker Eduardo Cunha and Vice-President Michel Temer, both of them impeachment plotters. That division in her junior partner PMDB made it even less likely that the centrist party would unite against her in Congress.

The split has made it difficult for Cunha to hold control of PMDB deputies. And it has also created new difficulties for Temer to remain as PMDB chairman in the next party elections in March. The initial agreement with Calheiros was later incremented with an alliance with PMDB key leadership in Rio, including mayor and presidential hopeful Eduardo Paes and governor Luiz Fernando Pezao. These two hold the most precious governments run by PMDB members and have had support from Rousseff to properly host the next Olympic Games. That alliance alone could be enough to stop her impeachment.

But there is more. Unpopular Rousseff made a cabinet reshuffle last year that gave PMDB the biggest budget of her administration. When one of their deputies was awarded the helm of the Health Ministry, the chance of impeachment already dropped sharply — that is the word of most serious political consultants I heard last year. Despite recent frictions between the ruling Worker’s Party and PMDB, most PMDB members aren’t radical and are keen on having government jobs to keep quiet. That reshuffle has made such an impact that the PMDB convention that was supposed to mark the break-up with Rousseff now seems lean towards a more conciliatory ending.

PMDB can now conciliate more because street protests against Rousseff are smaller and support for her impeachment is not as impressive as opposition members expected. Many of those who took part in mass demonstrations to criticize her administration have not gone out to demand her impeachment — that is too much for many Brazilians who have just as little faith in those that would replace her.

Finally, Brazil’s Supreme Court has so far played a clear anti-impeachment role, imposing a lot of difficulties in a process that was only kicked off after speaker Cunha openly made a movement to remove himself from the risk of being ejected from his position. It is hard to believe that Brazil’s top justices will allow the opposition to play by its own rules with Cunha — which seemed to be the case in the first semester of last year.

Of course there will be analysts saying that impeachment is looming large, but they are the same people that said Rousseff would be removed in August. Then September. Then October. Now they say March. They are wrong again.

2 – No major reforms, economy still lagging

Not being impeached is likely to be Rousseff’s biggest win in the year. With three more years in office, she is already a lame duck that has shown little sign of reinvention to make the best out of the rest of her second term. If she is lucky, Brazil’s economy will grow 0% in 2016. The political uncertainty is the main hurdle for the economy: the impeachment debate could last until April and the supreme electoral court will decide within a few months whether her ticket with Temer should be invalidated or not. The Worker’s Party is accused of sponsoring Rousseff’s and Temer’s campaign with funds embezzled from state-run oil giant Petrobras.

After her permanence on the job is assured, there will be no time for a legislative agenda that helps Brazil deal with its economy crisis. From July to October, there will be a recess in Brasilia until the end of the mayoral elections. In that vote Rousseff’s party is likely to be hammered, which will give her even less of a mandate to propose reforms in November and December. 2017 isn’t lost yet, but that may be only because the economy hit the floor.

Meanwhile, the Supreme Court is going to decide whether it should remove a number of deputies and senators, including speaker Cunha, for their involvement in the Petrobras scandal. That alone will halt Congress for the first semester. But its impact can be broadened, since other key political figures might be entangled by the mushrooming corruption accusations in the state-oil probe. Even former president Luiz Inacio Lula da Silva, who plans to run for president again in 2018, is likely to face investigations that will also dominate the political debate after the impeachment talk is over — many analysts believe that the target is more him than Rousseff.

That complex internal political situation, plus the sharp drop in commodity prices and the hard landing of the Chinese economy make Brazil’s 2016 less than exciting on the economy side. That means Rousseff will have to show the vision that she has lacked so far to stem job losses and increase productivity. She will have to trust her own executive orders to make that push. But it is hard to believe that consumer and investor confidence will suddenly pick up again in the middle of a year of so much political emotion.

3 – Rio Olympics will succeed, but with shortfalls

It will be my fourth coverage of the Olympic Games, this time for the Associated Press. I can barely wait, that is why I moved to Rio. My first Olympic work was during Athens-2004. Although I didn’t go there, I read, wrote and translated dozens of stories for Reuters on chaos, financial collapse and white elephants. It was clear that the Greek had mismanaged their time to build, but they delivered a nice edition of the Games — what they did to their sports equipment later is a different issue. Four years later I went to Beijing and it was all about human rights violations, censorship, air pollution and the risk of terrorism. The Chinese certainly looked tense and upset with foreigners. When it all ended, those of us that stayed longer in China saw a massive relief on the streets. At London-2012, I could cut the British tension in the air with a knife thanks to a massive security blunder: the government brought back soldiers from Afghanistan to operate X-ray machines in Olympic venues. Even the excessive rain made people jumpy. The locals relaxed in the second week and to this day many want to do it again.

Rio is now tense with the Olympics, but I expect the same to happen: a lot of fun once it kicks in, no big incidents, but some shortfalls that will make cariocas wonder how much better they could have done in their preparations. For the 2016 Games, the biggest issue is clearly the dirty waters in which competitors will be in. And that won’t change. Organizers may say what they want, but those waters are shameful and they are not what government officials promised when Rio won the bid. There will be a number of reports about expected difficulties, but, just like I said before the World Cup, none of those will bring a major problem to the Games. Which doesn’t mean that the criticism is not fair, as in any edition of the biggest sporting event there is.

The constructions seem to be on time, the budget cuts don’t seem to have a bigger impact on the full operation and Rio seems to be getting a new face in some very degraded parts of the city. But it is still less than the promise of cleaning the waters of Guanabara Bay, not running over residents in poor areas to build Olympic venues and leaving a subway infrastructure legacy that cariocas could be proud of. Brazilians don’t have much of an Olympic sports culture and are known for leaving things for the last minute, but it is fair to say that ticket sales have been disappointing and most Brazilians outside Rio don’t even think of the Olympics now. To make it worse, pregnant women all over the world don’t even consider coming because of the outbreak of Zika virus in Brazil — that disease can transmit microcephaly to their babies.

But I am still sure that once the sport begins it will be a great party, like in most Olympic Games. If there is a people that knows how to throw parties that is Brazilians — no matter how much our economy lags, how many white elephants are left behind or how many politicians end up in jail.

Rousseff’s impeachment is a penalty searching for a crime

I stopped writing about Brazilian politics for two months because of two different reasons. The first was the excess of work, which is likely to become a permanent feature of mine. The second was the complete unpredictability of how much the political and economic crisis could be aggravated. After speaker Eduardo Cunha started impeachment proceedings against President Dilma Rousseff, it is now safe to discuss with an end in sight — at least to the stalemate in Brasilia. It all could end in February or be dragged till the Olympics in August. Despite the intention of making the affair look like a natural development of President Dilma Rousseff’s unpopularity, the first issue of the agenda is proceedings themselves — although it is tempting to describe why Cunha used his so-called atomic bomb as revenge against government allies that wanted him investigated by Congress.

Brazil’s constitution says impeachment proceedings may be triggered by the speaker of the lower house if the president committed a “crime of responsibility” in the current mandate. There is no evidence that Rousseff did such thing, no matter how poor her performance at the Palacio do Planalto has been. What was used against her is an accusation that she intentionally infringed fiscal laws in 2015, even though there are no rulings in that direction for this year. The decision to include this year’s books in such a serious accusation is an improvisation, since Brazil’s constitution demands that impeachment proceedings can only be kicked off if the alleged crime of responsibility was committed in the current mandate. Rousseff’s second term began in January, when she was already facing impeachment calls. The alleged offense committed this year may have already been corrected.

Cunha’s decision is, at the very least, a stretch. Since Brazil’s audit court recommended that Congress rejects Rousseff’s books in the previous mandate (2011-2014), the speaker used that report as an initial excuse, attached a few notes from some technocrats saying that the malpractice continued this year and… voilà. That audit court (TCU) is not a part of the Judiciary — it is like the GAO in the United States. TCU only makes recommendations for Congress to judge, but Cunha and the opposition sell it to the public as if a judicial decision had been made condemning Rousseff. Congress has not even voted on the matter. No books of previous presidents have been voted in the last 20 years.

To make the impeachment grounds even shakier, Congress passed a bill readjusting Brazil’s fiscal targets for 2015 on the same day that Cunha approved the proceedings. With new fiscal targets approved by Congress for this year, how can the proceedings be kicked off based on an alleged back pedaling that was corrected before the year ended? That case hasn’t been made to the Supreme Court, but it might soon.

That would be enough to dismiss the impeachment calls in many mature democracies, but Brazil seems to need more. And there is more. Every federal, state and municipal administration has used state banks to pay for government programs and initiatives — that is the core of the accusation. Such practice was never defined as a crime. It is a hazardous fiscal irregularity that does deserve punishment to those that are responsible, no doubt. What impeachment sympathizers believe is that a widespread administrative practice should be considered a crime committed by the president alone.

They don’t even consider that such decisions can be made by the treasurer that also signed all those acts. The radicals also believe that the punishment to be applied should not be a fine or ineligibility in a future election: it has to be the removal of the president from her office. Is Brazil ready to apply similar rules to all former presidents, governors and mayors that committed those irregularities months before a mayoral election? Of course not. That is what makes the whole case look more of illegitimate way for the opposition to come back to power than to a respectable impeachment proceeding.

But let’s get radical for a second.

Let’s assume that Rousseff deserves to be impeached for her fiscal infringements. After all, there is real risk that she loses her position because of those accusations — they are not huge, but consultancy firms rate it at about 40%. If she goes, so should vice-president and now more openly impeachment plotter Michel Temer, who as interim president during her travels also signed similar acts.

Isn’t that extraordinary?

I am not even discussing all the other elements that make the current proceedings so illegitimate, such corruption investigations on speaker Cunha that might send him to jail, the opposition questioning Rousseff’s narrow victory right after the result was announced or her deep and deserved unpopularity in the middle of the current economic crisis. There is no need to if we stick to what the Constitution says.

That is why the impeachment proceedings started last week are a clear example that removing Rousseff is a punishment searching for a crime. Since she is not a crook, as far as Brazilians know, the difficulties to put it all in a box to send her away have been immense. Those that say that impeachment is a political process often fail to mention that the political process is only valid once the judicial requirements are fulfilled. That was clearly the case when President Fernando Collor was impeached in 1992.

That is far from being the case with Rousseff. Don’t take my word for it. That is also the opinion of respected publications like the New York Times. That is the perception of serious entities such as Brazil’s bar association OAB, the confederation of Catholic bishops (CNBB) and many other non-partisan organizations that favored Collor’s impeachment 23 years ago.

Unless new facts come out, the best for Brazil is to file these proceedings, carry on with the corruption investigations at state-run oil giant Petrobras, reform its political system and focus again on dragging itself out of the mud.

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