Brazil has exhausted across the board

An economy crisis, a political turmoil, a footballing nightmare and cultural emptiness. That is Brazil these days. One of the few things President Dilma Rousseff got right this year is that the country is experiencing a moment of crossing. From third world nation to… nobody knows exactly what. The time for quick and easy answers to Brazilian woes is definitely over.

In politics, it is hard to make predictions that live through one week. The model of presidential coalitions has definitely died with the current crisis. Since 1992, presidents made their best to secure support from most political parties so they could stop investigations and pass their reforms. After only one tight presidential election, Brazil’s first in that scenario, the current presidential coalition is destroyed. And there is no sign anyone can make that kind of arrangement work again. Corruption investigations will free Brazil from many of those who profit in those coalitions, but that doesn’t mean there will be leadership to put party politics in another level.

In the economy there is no clear path after the super consumption pathway seems finished. With a cyclical crisis, consumer confidence has dropped to record lows. So how can Brazil take a better and more sustainable road? The problem is clearly related to politics too, but the timing for politicians and economists will always be very different. Some will say Brazil needs to get rid of the absurd interest rates that stall the economy and others will insist in cutting government expenses. Whichever is the option for the next few years, it is hard to say anyone without strategic planning will be able to hit the bull’s eye. There are no bull’s eye left in Brazil.

Since democracy was reestablished in 1985, Brazil had major challenges to tackle. Challenges that seemed urgent. First we had to consolidate our democracy. Then it was all about fighting inflation. In this century there was a quest against extreme poverty. At the end of the day, Brazilians won all those disputes. But now what? Education, public security, healthcare and infrastructure are clearly important areas in which Brazil has to improve, but that urgency hasn’t quite sunk in. Most programs in those fields are quite basic and fail to confront important interest groups that have halted improvements. Will that happen now that Brazilians feel that malaise? Hard to know.

Even in football Brazil seems exhausted. Coach Dunga is the archetype of a pragmatism that Brazilians reject. Fans are fewer and fewer not only because the team was destroyed by Germany in the 2014 World Cup, but also because there is no fun. The Brazilian creativity that used to compensate for all the flaws and hardships seems to be gone now that Brazil isn’t as troubled — despite the current crisis — as it once was.

In other arts it is no different. Take the last edition of festival Rock in Rio as an example. Most of the Brazilian bands playing there exist since the 80ies. Not much has happened in the last two decades, except for record label-sponsored rockers that have little food for thought to offer. The cinema industry could be a good exception to the rule, but even that one, despite recent successes, is dominated by pasteurization. Just like Brazil’s economy for a while, it is a success for consumers, not so much for serious critics. And all that confusion will still be seen when Rio de Janeiro hosts the next edition of the Olympic Games.

Since politics tends to guide all the other fields, the future of President Rousseff will probably have a big impact on Brazil’s final stop after this gruesome crossing. A crossing that is nowhere near the end.

Brazil’s political crisis explained

(Originally published in Folha English)

There is no easy explanation as to why, just under a year after being reelected by a narrow margin, President Dilma Rousseff runs the risk of not completing her term in office. It took respected consultancy firm Eurasia months, for example, to weigh up all the factors and raise the chances of her resigning or being impeached from 30% to 40%. But one thing is easy to predict: whatever the outcome, the current climate of polarization is here for a while – perhaps even until after the next elections.

Although opposition militants argue that Rousseff has only herself to blame for her troubles, pro-government forces place the blame on kingmaker party the PMDB, and defeated PSDB presidential candidate Aécio Neves. Leftist groups continue to defend Rousseff’s mandate but oppose her fiscal policies. While it is difficult to know where the saga will end, there are clear reasons behind Brazil’s political crisis.

The aggressive, toxic campaigns waged by both candidates in last year’s elections are as good a place to start as any. Rousseff came close to defeat against Neves, who himself only made it to the second round run-off on the final straight – environmentalist Marina Silva had been running second in the polls until then. And the contest was only so tight in the first place because of a sluggish economy and the emergence of a new wave of scandals involving key members of the government. In 2013 most bets had been on Rousseff’s reelection.

After a narrow defeat, Neves barely recognized his opponent’s victory in his concession speech. Such a tight margin, the closest in Brazilian history, had two immediate effects: a smaller mandate for the winner and more sore loser griping from the other side. Impeachment talk emerged right after Rousseff was proclaimed the victor, and today it often feels as though the election never ended.

After a leftist-sounding campaign, the president turned her attention to the financial markets in a manner that shocked many of her voters. After much indecision, she picked American-trained Bradesco Bank economist Joaquim Levy to be her Finance Minister, and appointed a number of other conservative ministers, some of whom would have been more comfortable in a Neves cabinet. Before the end of the year she had managed to lose touch with her base, while at the same time failing to win over her adversaries.

Since then the crisis has all been about the government’s controversial ally, the PMDB. The centrist party, which has itself been associated with scandal more than a few times in the past, was never 100% on Rousseff’s side, and today it would be a push to argue that even 50% of its deputies and senators are still with the president. During the campaign some of the party’s key figures were already placing their bets on Neves, and the division has remained even after the president’s victory.

But it got much worse. Congressman Eduardo Cunha, her main adversary in the party, decided to fight for the role of Speaker of the Lower House until February 2017. Government forces chose someone else. Cunha prevailed anyway and now the opposition decided to play ball with him.

Rousseff believed that her decisions would restore the credibility she had lost in her first term thanks to growing spending and the use of backpedaling, a form of delaying repayments to lenders who had provided money to pay for welfare programs, making the country’s books appear more robust than was actually the case – a breach of fiscal responsibility laws say the opposition, but common accounting practice according to the government.

But in fact those unpopular steps, which contradicted profoundly with the tone of Rousseff’s campaign, were eating away at her popularity. The Lower House, led by Cunha, began to think of ways to put further pressure on an already unpopular president.

The lack of enthusiasm for the new administration had been evident since January 1st, when Rousseff’s somewhat flat inauguration was attended by less than 5,000 people – around 10 times fewer than at the start of her first term. Rousseff picked a number of ministers that patently had few qualifications for their positions, solely to maintain the support of their parties in Congress. Cunha’s election as speaker may have been the first sign that the strategy had failed, but others have followed.

Despite being involved in multiple scandals, including the Petrobras investigation, Cunha is a wily strategist. With the speakership he had the power to define the Lower House voting schedule, and to choose which congressional inquiries would move forward. This latter power includes what is described as “an atomic bomb” in Brasilia: in other words, whether or not to allow an impeachment process against the president to progress.

When Rousseff’s popularity sunk to single digits, all the opposition, which had been repeatedly stirring up protests against the president, needed was a motive to seek impeachment, and in Cunha they had found a willing ally.

Three possibilities have now emerged. One is to find a direct link between the president and the Petrobras scandal, while another option is for the Superior Electoral Court to strip both her and Vice-President Michel Temer of their positions because of the use of supposedly illegal funds in their election campaign. The third potential outcome, meanwhile, is to accuse Rousseff of breaking fiscal responsibility laws in the form of the aforementioned backpedaling.

All these three possibilities remain in play, but none are conclusive. If proven, they would also result in different outcomes: in the first and the third cases, Temer would take over from Rousseff, although rumors have suggested the vice-president himself may be implicated in the Petrobras scandal – something he has already denied.

If both Rousseff and Temer go, runner-up Neves would take over, with even those in opposition recognizing that such a decision by the Superior Electoral Court would not necessarily give them the legitimacy they would need to govern. Since the restoration of democracy in Brazil in 1985, impeachment charges have been brought only against President Fernando Collor de Mello, in 1992, when he was directly linked to corruption scandals that had emerged during his term, showing the difference between the two cases.

Rousseff has relied on a number of factors to keep her job. The first is her turbulent yet enduring relationship with former president Luiz Inácio Lula da Silva, the main power behind the Worker’s Party. She also hopes to maintain her alliance with the president of the Senate, Renan Calheiros, who could also yet be implicated in the Petrobras scandal. The third is the pragmatism of many business leaders, who think impeachment would represent a major setback for a young democracy.

Further complicating matters is that in the event that impeachment proceedings are instigated in the Lower House, Rousseff may decide to take her case to the Supreme Court. Unlike congressmen, Brazilian supreme court justices have little interest in the polls and nor are they yet much concerned with the discussion about investigations of the Petrobras scandal — they just care about the facts. It appears impossible to tell what the outcome of such an action might be. Brazil is not for beginners, as the songwriter Tom Jobim once memorably said – and the complexities of the current political crisis show that his words are as true now as ever.


Get every new post delivered to your Inbox.

Join 2,038 other followers