Brazilian President Dilma Rousseff’s suspension from office came because of her poor leadership. Worries over one of the worst recessions in Brazilian history combined Rousseff’s policy mistakes led to relentless voter unhappiness, especially with her opposition. The mainstream media channeled and reinforced the attacks on her. All of these factors led to the lop-sided Congressional vote that placed Vice President Michel Temer as interim President.
Rousseff’s demise along with that of her Workers’ Party began in the 90’s.
- The Plano Real, a set of measures taken in 1994 to stabilize the Brazilian economy and control runaway inflation, together with the leadership of then-President Fernando Henrique Cardoso created political and economic stability that unleashed tremendous economic growth. The stabilization led to a large private accumulation of savings, investments and consumption with positive gains for all socio-economic classes.
- Lula, the perennial presidential contender, finally won the 2002 election after four tries. The recession of 2001-2002 helped Lula, who blamed the economic slowdown on his predecessor and the PSDB party. In his first term, Lula kept most of the Plano Real’s policies. During Lula’s two terms (2002-2006, 2006-2010), a good and growing economy led to rising incomes among the majority of Brazilians as well as the growth of social programs such as the Bolsa Familia. Lula’s leftist party also brought a lot of benefits to the rich as the government, mainly through the BNDES, Brazil’s enormous development bank that picked “champions” or favorites for subsidized and generous bank loans.
- The economy came into conflict with the political system with the Mensalao (Congressional vote buying) crisis in 2005 but the fissures were covered over by a mixture of Lula’s popular political management and enough resources generated from domestic accumulation and commodity exports. President Lula dodged this bullet and was reelected in 206. However, the investigation led to the jailing of Jose Dirceu, Lula’s grey eminence and other politicians. It also set the precedent for the Lava Jato scandal that was to unfold under Dilma’s watch.
- Rousseff’s election in 2010 confirmed Lula’s ability even with a substantial decrease in voter support for the Worker’s Party.
- The softening of foreign demand for commodities led to Finance Minister Guido Manteiga’s promotion of domestic credit and spending in the 2010-2014 period. But Manteiga’s supposedly Keynsian economic stimulus policies were already running out of steam in 2013 when protestors hit the streets in mass to complain about Brazil’s high taxes and low levels of public services.
- Rousseff muddled through the protests and the World Cup (2014), which Brazil was favored to win. Unfortunately she and Brazil were stung by 7 x 1 loss to Germany and took a humbling 4th place in the competition.
- To counter Brazil’s soccer loss, together with all of the stirring caused by a slowing economy, Rousseff’s administration borrowed heavily from state banks. This money paid for her campaign and the public projects that certainly aided her reelection. Through her bid, Rouseff continued to portray herself as a conscientious leftist with strong management skills capable of delivering not only stadiums but also housing, social progress and infrastructure along with economic growth.
- The problems, however, were constant criticism by the opposition and major media alleging that Rousseff was reelected because of false promises and her manipulation of public accounts. These complaints also reflected the sad state of the economy after the Cup.
- President Dilma insisted that her 54 million votes in 2014 trumped the 51 million received by her opponent Aecio Neves. But Rousseff also sent mixed and incoherent messages and ultimately failed to adequately address her opponents’ criticisms.
- Importantly, Rouseff alienated major sectors of the left by making Joaquim Levy, a technocrat and formerly a member of her opposition, Brazil’s finance minister. Moreover, Rousseff failed to back Levy’s measures aimed at gaining control of spending and rising inflation at the beginning of the her second presidential term.
- She was weakened by falling support on the left, condemned by the right and disliked by most everyone. Rousseff could not even prevent the election of the notorious Eduardo Cunha to the presidency of the House. (Brazilians compare Cunha to Kevin Spacey’s character in House of Cards.) From his high position, Cunha was able to escape, at least until after Rousseff’s suspension, his own corruption proceedings. As chamber president, he coordinated and master minded the steps that led to Rousseff’s impeachment trial.
- Although the new interim government of Michel Temer promises to continue with the scandal investigations, there is already a noticeable slow down. Judge Sergio Moro no longer appears in the news on a daily basis and numerous Temer nominees as well as Temer himself are implicated in many scandals. But there is little or no prosecutorial movement in their direction.
- Corruption is a symptom, a manifestation of the precarious state of Brazil’s political institutions. The questionable legality of the impeachment process actually weakens the public’s respect for Brazil’s governing institutions and illustrates the frayed and corrupt aspects of Congress. The New York Times called it as a circus.
- Brazil continues to show the halting development of a Third World country filled with potential but riven by a backward political structure. Threatened by the emergence of new players, the upper and traditional middle classes tend to support conservatives to preserve their status and privilege.
- Brazil’s crisis, while superficially moral, is really political and institutional. As the saying goes, “o buraco e’ mais em baixo”. (This is a somewhat smutty saying that politely means barking up the wrong tree.) Corruption becomes only a coded message for political manipulation and unequal treatment. Undoubtedly, the Workers Party should shoulder much of the blame as it used most any means to justify its staying in power. Still, the entire political system has been tainted.
The future doesn’t look bright because of the questionable way in which Rouseff’s impeachment was carried out and the breakdown of institutions. Rouseff’s could have resigned because of falling support in Congress . She refused.
Temer’s economic team is market friendly and has been praised by some in the business community. But new president is widely unpopular and many of his appointed cronies are under investigation. Just as the opposition accused Rouseff of obstructing justice by attempting to appoint Lula, the same charge could be raised against Temer for his appointments. So even if he were to achieve some miraculous short-term economic success, his legitimacy is still in question.
Can Brazil’s backward economic and institutional movement be reversed? At this point, the best solution would be for the TSE (the Superior Electoral Court) to remove both Temer and Dilma and call for new elections. However, it appears that the TSE will not act in time and Brazil will have to wait until the scheduled 2018 elections to start rebuilding. In the meantime, business goes on in a shrinking market with prices increasingly out of control. New Finance Minister Meirelles is already complaining that the economy is in worse shape than he anticipated. Congress will resist the proposed cuts and changes in pensions and other restrictive measures. It remains to be seen if Temer can chart a successful course for Brazil in the coming months and years. Those of us, who are old enough, remember the last PMDB presidency of Jose Sarney with spiraling inflation, corruption and years of recession. Michel Temer may unfortunately be Sarney’s successor. It is doubtful that his party can distance itself from short term opportunism and corruption in order to set a firm course for Brazil. The PMDB’s past does not bode well for the future.