Fed Up

On Thursday, 12 May, the Upper House of Brazil’s Parliament voted in favor of impeaching President Dilma Rousseff and suspended her from office pending judicial inquiry, which under Brazilian laws, may go on for up to 180 days. Even though the decision to launch the impeachment proceedings may be appealed, there is virtually no chance for her to win her presidency back – she is set to leave office. Brazilian MPs may already put the whole matter to rest in early summer.

What kind of legacy will President Rousseff leave behind? Unfortunately, it will be mostly negative. Her celebrity predecessor, Lula da Silva, who supported Dilma during her first successful presidential bid in 2010, achieved some serious successes in advancing the country’s development on all fronts: Brazil’s economy saw productivity growth, while government spending was brought to heel and inflation curbed. Lula’s social policy enabled millions of Brazilians to beat poverty.

For a while, Dilma rode the wave of his legacy but never made any positive contribution of her own toward the development of her country. Moreover, in the wake of the global economic crisis, the price of Brazilian exports including metals, soybeans, meat, and other raw materials fell sharply, and the government failed to take measures to balance the economy.

Its policy was nothing short of reckless. Primarily, it affected social spending, which was blown out of proportion and needed to be reduced against the backdrop of declining state budget revenues. While Lula maintained an iron grip on the budget, Dilma simply let the whole thing go to pieces. In 2015, the losses sustained by Brazil’s federal budget exceeded the revenues by 115 billion reals ($28.75 billion), marking the country’s worst performance in the last 19 years. The government ran up a debt that reached a staggering 66.2% of the GDP. According to Brazil’s Central Bank, expenditures in the public sector exceeded revenues by 111.2 billion reals ($27.8 billion). Little wonder that this fiscal policy cost Brazil its investment ratings with all three major rating agencies: Standard & Poor’s, Moody’s, and Fitch Group. In other words, Dilma’s inadequate policies caused the country’s economy to spin out of control.

To add insult to injury, Dilma proved to be a weak politician, completely unable to fix relations with her political opponents. In this respect, she looks far inferior compared to her predecessor and backer Lula, who earned the nickname of ‘Teflon President’ for his ability to shed any negative reputation. Dilma has none of Lula’s charisma nor any of his political chutzpah. Moreover, prior to taking the presidency, she had never held an elected office, serving only in administrative positions. She has always been an outsider in the legislature as well, a pure bureaucrat with no skill in communicating with the Parliament and the people.

Corruption Pressures

There is no doubt that all of these factors played a role in damaging Dilma’s ability to survive the current corruption scandal as the prospect of impeachment becomes more and more likely. Few in Brazil would be shocked by corruption – it would not be a stretch to say that this affliction is somewhat endemic in this country and that scandals of this sort have always abounded. Lula certainly had his fair share of them, with repercussions going far and wide. For instance, in 2005, Jose Dirceu, Secretary General of Lula’s and Dilma Rousseff’s Workers’ Party, was convicted for corrupt practices and banned from holding any government office.

Granted, the current corruption scandal connected to the Petrobras investigation is truly Homeric in scale. Meanwhile, in 2010, the perceived level of corruption increased compared to the 1990s or 2000s, which is hardly a coincidence. The explanation is simple: When Brazil was poor, people simply could not be bothered – they did their best to survive. However, in the early part of the last decade, the economic boom saw a rise in the well-educated and relatively numerous middle class across the country’s cities. These people are used to making money on their own rather than falling back on the country’s natural resources. They regard the corrupt practices, bribes, and kickbacks that came to light during the Petrobras investigation as a major irritant.

For 20 to 25 years, Brazil did not see a single demonstration – it was a very peaceful country. However, now, passions really reached a boiling point: In 2013, millions took to the streets of Brazilian cities, protesting more against unbridled, rampant, and egregious corruption rather than the dire economic situation. Dilma Rousseff’s leftist government became the target of these protests along with her socialist Worker’s Party, which had not so long ago come to power on a promise to combat corruption. In this respect, the ‘leftist’ idea was quickly discredited; people who had been perceived as honest fighters for the rights of ordinary people proved to be among those most corrupt. This is the main reason behind Ms. Rousseff’s current fiasco – it was not just the struggling economy but the egregious systemic corruption the scale of which positively boggles the mind.

No Breakthroughs

Dilma Rousseff’s suspension sent the situation in Brazil into a tailspin by any stretch of imagination. The country is unlikely to see any political and economic reforms until 2018 when the next presidential election is slated to take place. The acting president, Michel Temer, does not command sufficient legitimacy to take radical steps toward economic recovery. Brazil’s Parliament is relatively populist and will not have the stomach to cut social spending nor to change the current economic policy, which spells a major problem.

The situation is further exacerbated by the fact that Brazil’s party system is in tatters. Today, there are simply no strong parties left that would be capable of assuming the responsibility for the reforms as all large parties in the country are going through a profound crisis. Lula’s ruling Worker’s Party is fighting a losing battle. Soon, it is likely to see renegades amidst its own ranks. Michel Temer’s center-right Brazilian Democratic Movement Party (BDMP) is being torn apart by infighting. Former President Fernando Cardoso’s Social Democratic Party of Brazil (SDPB) is facing an acute leadership crisis and has no decent agenda to offer. The Socialist Party is hardly doing any better since its former presidential candidate Eduardo Campos died tragically in 2014.

In the early part of the last decade, the economic boom saw a rise in the well-educated and relatively numerous middle class across the country’s cities. These people are used to making money on their own rather than falling back on the country’s natural resources. They regard the corrupt practices, bribes, and kickbacks that came to light during the Petrobras investigation as a major irritant

Brazil’s political establishment has been unable to produce any candidate worthy of the presidency. Today, we see the start of a political race that is likely to become a stiff competition in the run-up to the open election in 2018 with no clear favorites in sight, and it doesn’t just apply to the parties but also people, for each party has many ambitious politicians vying for the presidency. The outcome of this battle is hard to predict today.

However, it does not mean that President Rousseff’s suspension is likely doom the country to political anarchy. Brazil’s Constitution is perfectly functional, not to mention that this is hardly the first impeachment in the country’s recent history. In 1992, the same procedure was used to oust President Fernando Melu, which did not result in any anarchy. There is no reason to believe that this time around the country is likely to be destabilized in any serious way. The protests are likely to subside very soon; after all, removing the corrupt elites from power was virtually all protestors demanded, and this demand has now been met. So, the domestic political situation is likely to become more even-keeled.

By the same token, before the new presidential elections start, Brazil’s foreign policy is unlikely to see any sudden changes. In particular, Brazil’s relations with Russia, which enjoyed a very positive spell under Dilma Rousseff’s presidency, will not suffer any damage. They will continue to evolve in a positive way during Michel Temer’s as well. He visited Moscow several times as vice president and holds Russia in high esteem in every respect. On the other hand, there will be no major breakthroughs internationally, either. Temer’s limited legitimacy will continue to stand in the way of every major policy decision.

The prospect of Brazil losing interest in the BRICS project is also highly unlikely. All political stakeholders concede that Brazil is a great country, and therefore, should continue to conduct an independent foreign policy. In this sense, its position vis-à-vis BRICS as a new center of power perceived to challenge the Euro-Atlantic world is hardly expected to change. Brazil’s pivot to the United States appears all the more improbable. For various reasons, anti-American sentiments dominate the entire Brazilian political spectrum. This applies to Dilma Rousseff, who was arrested in 1970 and spent three years in prison for being a member of an underground movement fighting against the military junta that came to power as a result of the 1964 coup d’état orchestrated by the CIA. One of the opposition leaders, Jose Serra, who ran for president in 2010 on the SDPB ticket and was recently appointed foreign minister, also has a similar story to tell: While in Chile, he was arrested at a stadium in Santiago during the 1973 military coup and escaped execution only by the skin of his teeth. In other words, Brazil’s political elite’s attitude toward the United States is ambivalent at best but more often negative.

However, in the next two years, Brazil’s foreign policy will take a backseat. All eyes will be on the elections in 2018, after which life in this country is going to change, though it is difficult to say in what way.