Brazil: Political Crisis and Hunger for Change?
Demonstrators shout slogans during a protest
against Brazil's President Dilma Rousseff at
Paulista avenue in Sao Paulo
April 12, 2015
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Doctor of Political Science, Director of Center for Political Studies of the RAS Institute of Latin America, Professor of Global Processes Department at Lomonosov Moscow State University
In April 2015 Dilma Rousseff marked the first 100 days of her second term as President of Brazil. This date, which is traditionally regarded as quite significant for Heads of State, took place amidst escalating corruption scandals, mass protests by civil society, a deteriorating economic situation and worsening disagreements within the ruling coalition. The growing instability is giving rise to uncertainty about the political situation.
In April 2015 Dilma Rousseff marked the first 100 days of her second term as President of Brazil. This date, which is traditionally regarded as quite significant for Heads of State, took place amidst escalating corruption scandals, mass protests by civil society, a deteriorating economic situation and worsening disagreements within the ruling coalition. The growing instability is giving rise to uncertainty about the political situation.
Grounds for social protests
In March - April 2015, mass protests swept through Brazil again: according to police, on March 15 more than a million demonstrators came out on the main street of Sao Paulo and about 2 million people across the country. On April 12, the number of protesters declined to 700 thousand people (with 275 thousand in Sao Paulo), but the geography of protests expanded significantly and covered 150 cities.
The protest marches were organized by representatives of the urban middle class, who are united in social network movements. The grassroots group “Rebels Online” (Revoltados on Line) has 769.2 thousand Facebook likes, “Come to the Street” (Vem pra a Rua) has 493.3 thousand, while “Free Brazil Movement” (Movimento Brasil Libre) has 132 thousand. Most of these users are opponents of Dilma Rousseff’s government and are campaigning for changes in the current model of development, the adoption of a policy of economic liberalization, limits on government interference in the economy and the creation of more favorable conditions for entrepreneurs. A small minority – in particular, the “Down with All” movement (Fora Todos) – unites left-wing radicals, advocating the establishment of workers’ power. According to the influential sociological agency Datafolha, 95 percent of protesters in Sao Paulo do not belong to political parties, while 34 percent of them identified themselves as centrists, 26 percent as rightists, 20 percent as right-wing centrists and only 7 percent as leftists.
In contrast to the mass demonstrations of June 2013, when participants demanded improvements in the quality of social services and protested against the irrational spending of budget funds this time the protest were caused by the inefficiency of government efforts to combat corruption.
Although, according to surveys 75 percent of Brazilians supported the anti-government demonstrations, representatives of the counter-elite have taken a cautious line. Both the founder of the Brazilian Social Democracy Party, former President Fernando Henrique Cardoso and its current leader, candidate in 2014 presidential election Aecio Neves, supported the protest, stating, however, that the opposition should not use the civil society unrest for its own purposes and is not interested in the destabilization of the country.
In contrast to the mass demonstrations of June 2013, when participants demanded improvements in the quality of social services and protested against the irrational spending of budget funds (primarily, those used on hosting the World Cup in 2014 and the Summer Olympic Games in 2016), this time the protest were caused by the inefficiency of government efforts to combat corruption.
ilma Rousseff
The current corruption scandal sparked a massive public outcry during the election campaign in 2014. The scandal was produced by disclosures of wrongdoing by the state-controlled oil company Petrobras, which was accused of making inappropriate expenditures, conducting non-transparent tenders and awarding overpriced contracts to construction companies in return for bribes. During the investigation, prosecutors brought charges against more than one hundred people, including five senior executives of the company. Charges of money laundering and suspicious connections that were filed against 50 political figures, including five former ministers and chairmen of both chambers of the National Congress, further politicized the process. The arrest of the ruling Workers’ Party treasurer João Vaccari Neto cast a shadow not only on leadership of the party, but on the President as well, as the opposition raised the question of illegal funding activities being committed by Petrobras in the 2014 election campaign.
With all these events occurring, the Brazilian Social Democracy Party initiated an investigation of the activity of the National Bank for Economic and Social Development, which had granted loans worth $800 million to businesses involved in the corruption scandal. This initiative was supported by MPs from other opposition parties and a number of parliamentarians from the ruling coalition. According to Datafolha, in April 2015, 57 percent of respondents believed that Dilma Rousseff knew about the illegal use of funds and did nothing to put an end to it, 26 percent were of the opinion that the President knew about the problem, but could do nothing, and only 12 percent thought that the head of state had nothing to do with the scandal. As a result, 63 percent of Brazilians were in favor of the President’s resignation, 33 percent were against it, while 4 percent abstained.
Government's response
Brazil has entered a period of stagnation, and it is unlikely that the situation will improve considerably by the end of Dilma Rousseff’s presidential mandate. Against the backdrop of austerity measures, the political pendulum will inevitably have to swing to the center.
President Dilma Rousseff did not label her opponents a “fifth column” and said that modern democracy should take into account both the election results and the voice of the streets. The government put forward a plan for an uncompromising struggle against corruption to be further approved by the Congress. The plan suggests making the concealment of funds received by the parties during election campaigns a criminal offence, the penalty for which involves the confiscation and sale by auction of property obtained by illegal means. Bribe-takers will be deprived of the right not only to engage in politics, but to work as civil servants too. All officials have to demonstrate the conformity of their expenses to their income and businessmen face stiffened penalties for the illegal use of the public domain.
The President also revealed that as a result of the Petrobras personnel purge, all corrupt officials were fired from the company and the latter had achieved a record level of profitability, again emerging as a national champion, and would soon get an award for efficiency in the United States. In turn, the leadership of the Workers' Party declared that all those who had dishonored their reputation through their involvement in corruption schemes would be expelled from the Party’s ranks. Thanks to the agreement signed with Switzerland, Brazil has been able to recover 120 million dollars that had been illegally transferred; 400 million dollars are still frozen in Swiss banks pending the completion of the audit of Petrobras and its contractors.
Economic background of corruption scandals
The start of Dilma Rousseff’s second mandate has coincided with a deterioration in the economic situation characterized as stagflation. According to official data, in 2014 the economy grew by only 0.1 percent and preliminary estimates forecast a shrinking of GDP in 2015 by 1.3 percent. The expected inflation will exceed initial forecasts and its annualized rate will reach 8.23 percent (the highest rate since 2003). The exchange rate of the real is declining as well. Amidst these conditions, Brazil’s new Finance Minister Joaquim Levy took a course to reduce costs by cutting back on social programs, which actually means a revision of the socially oriented development model traditional for Brazil. To achieve a balanced budget the government intends to save 80 billion reals (26.4 billion dollars) this year, taxes and interest rates on consumer loans are being increased in the country, and energy prices are rising. The fact that in terms of GDP the United Kingdom once again left Brazil behind and became the sixth largest world economy dealt a heavy moral blow to the Latin American giant. Moreover, according to forecasts, in 2015 India will replace Brazil as the seventh largest economy in the world.
Disagreements in the ruling coalition
Regardless of the extremely low rating of the President, there are no formal grounds for her impeachment.
From the very beginning, the political position of Dilma Rousseff was not strong enough: the incumbent president triumphed in the second round vote with 51.64 percent, winning by a narrow margin of only 3.28 percent. The ruling Workers' Party received only 70 of 513 seats in the lower house and 12 out of 100 seats in the upper house of Parliament. Thanks to the alliance with the centrist Brazilian Democratic Movement Party (PMDB) and other moderate parties, she managed to create a pro-government parliamentary majority, but corruption scandals and other differences soured relations between the main allies of the coalition. PMDB representative Michel Temer became Vice-President as the running mate of Workers’ Party candidate Dilma Rousseff, and PMDB, then a friendly party, received six ministerial posts.
However, the fulfillment of these commitments was only formal since representatives of the party became heads of minor ministries, having lost the Ministry of Defense, of Social Security and the Secretariat of the Strategic Affairs. In the previous cabinet, PMDB controlled 15 percent of the budget, while in the current one, it only controls 2 percent. In addition, Dilma Rousseff supported the creation of the Liberal Party, which included, along with the Social Democratic Party, PBDD dissidents, thereby weakening its ranks. The interests of the coalition allies clashed during the election of the President of the Chamber of Deputies, when Eduardo Cunha of PBDD won a landslide victory (267 votes versus 136) over Workers' Party representative Arlindo Chinaglia.
After the heads of both houses belonging to the Brazilian Democratic Movement Party were blacklisted as suspects in the Petrobras corruption scandal, the ruling coalition found itself on the verge of collapse. To regain control of the National Congress, Dilma Rousseff made an unconventional move and appointed Vice-President Michel Temer as Head of the Secretariat of Institutional Relations to handle political liaisons between the government and parliament. In recent decades, PMDB has traditionally not nominated its own candidate for president, preferring to join the party, having had better chances of winning. Given this fact, it is possible that in 2018, the pragmatic PMDB will finally run for presidency either on its own or enter into an alliance with the currently oppositional Social Democratic Party, as it was in 2002.
Possible perspectives for political development
Mass protests in Brazil have shown that the prolonged time in office of one party, even if the policies pursued by it have been successful, gives rise to aspirations for change, and that without political competition and alternation of power, the fight against corruption is unlikely to be effective.
Brazil has entered a period of stagnation, and it is unlikely that the situation will improve considerably by the end of Dilma Rousseff’s presidential mandate. Against the backdrop of austerity measures, the political pendulum will inevitably have to swing to the center. As for foreign policy, along with maintaining friendly relations with other BRICS member states and Latin American neighbors, Brazil will normalize relations with the United States, which had been significantly spoiled by Edward Snowden’s revelations. The United States has already expressed an interest in strengthening trade ties and expanding cooperation in the field of defense between the two largest economies in the Western Hemisphere, which the upcoming official visit of Dilma Rousseff to Washington on June 30, 2015 will testify to. The Brazilian President also welcomed the policy of normalizing relations between the US and Cuba that put an end to the Cold War remnants in the region.
Regardless of the extremely low rating of the President (13 percent in April 2015), there are no formal grounds for her impeachment, while the impeachment procedure is quite complicated and lengthy. Nevertheless, there is little doubt that economic difficulties will spark middle class protests, which may be joined by trade union representatives disgruntled at the new system of employment and job insecurity. It is quite possible that the Workers' Party has exhausted its resources during the four presidential mandates.
Mass protests in Brazil have shown that the prolonged time in office of one party, even if the policies pursued by it have been successful, gives rise to aspirations for change, and that without political competition and alternation of power, the fight against corruption is unlikely to be effective. Under these new historical conditions, the forms of social protest are changing, political parties and trade union centers are fading into the background, while network technologies and mobile communications assume the main mobilization role. Decentralization and the lack of apparent counterparts are complicating a dialogue with the government: this is both a strength and a weakness of the protest movement.
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