Top 10 facts to cover Brazil’s political crisis

Many in Brazil have insisted on a narrative of “inevitable impeachment” of President Dilma Rousseff. Even respected consultancy firms have done the same — Eurasia expects her to be booted out by May. But things are more complicated than it seems. So here are some facts that cast more doubts than certainties over the current mess. I don’t make any predictions but this: this is not going to be simple.

1 – Brazil’s Supreme Court might accelerate, stall or destroy impeachment proceedings in Congress. All predictions by opposition members don’t count on Brazil’s top court, which has already stalled the proceedings last year. One example: the impeachment commission in Congress almost decided to include new accusations against Rousseff in the proceedings approved last year. The move is controversial. The original document only talked about her allegedly breaking fiscal rules. That alone could have made the Supreme Court act and send everything back to scratch. The same could happen in every step.

2 – The Petrobras probe will not stop. It will surely bring new allegations against coalition members, but newspapers have reported that opposition members and junior partner PMDB are likely to be the big targets of the next weeks. If that is true, the whole game gets even more confusing.

3 – No one knows whether Lula will be minister or not. Despite the initial backlash, his being in government could stop the outflow from Rousseff’s coalition. Or accelerate it if new evidence against him emerges. If he becomes minister, he could also bring more ire against the Worker’s Party and speed up the governments’s doom. If he doesn’t, he could lead from the streets and become a competitive candidate in the next elections. If he is arrested, there could be more division than ever.

4 – Junior partner PMDB is not unified around anything. And it shouldn’t be much different in the current crisis. Even when PMDB reaches unified decisions, it often takes very little for a chunk of the party to start feeling differently. PMDB has no leader.

5 – Vice President Michel Temer has even less support. A Datafolha poll said 68% of Brazilians want Rousseff out. But only 11% believe Temer is the leader to reconcile. Important to bear in mind that Temer was the least voted Congressman in Sao Paulo in the 2006 elections. He doesn’t have any votes. That could be the unification: all protesters joining against him if the economy crisis persists. And there is no sign that the economy crisis will end soon…

6 – Streets are now boiling for both sides. Pro-impeachment protests are bigger than ever. But now anti-impeachment protests, although smaller, are also bigger than ever. That division could reflect in Congress. The opposition needs an overwhelming majority, but the administration has its back against the wall. It seems one of the boiling sides will be upset in the end. Who can handle that?

7 – Mayoral elections in October. Some want to speed up impeachment because they want government allies that work for them in the next mayoral elections. If the path looks too difficult, will they insist? After July’s recess all Congressmen leave Brasilia to work for their candidates in their base. All want money to invest to lure voters.

8 – Respectable voices are coming out for both sides now. Brazil’s bar association has endorsed Rousseff’s impeachment (not necessarily the current process). Artists and intellectuals seem to be mostly rejecting impeachment. Everything is less obvious. It is not the government against the opposition; it is pro-impeachment against anti-impeachment. No matter what politicians say, they are rejected by many in both protests.

9 – Brazil’s Senate has not made a decisive move. If impeachment proceedings are approved in the Lower House, the Senate has to move it forward. The current state of mind of the senators has not been properly measured.

10 – Brazil’s media is not the best reference for what will happen. Most of Brazil’s mainstream media said impeachment would be finished by August. Then September. Then October. Then November. Then December. Then March. Now they are divided: some say April, others say May. All I say is buckle up because this might be long.







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.