Brazil after Dilma Rousseff
On Tuesday former Brazilian president Dilma Rousseff left the presidential palace in Brasilia and boarded a plane for her adopted home city of Porto Alegre. She leaves behind a successor who risks indictment for far worse offences than the ones that brought her down, and a country that has lost its right to a place among the BRICS.
The BRICS began as a collection of large, fast-growing countries in the poorer parts of the world that Jim O’Neill of Goldman Sachs identified as emerging global powers in 2001: Brazil, Russia, India and China. (South Africa and the capital ‘S’ were added in 2010.) The BRICS even started holding annual summits, although they were rarely more than orgies of self-congratulation.
Nobody enjoyed their new status more than the Brazilians, but it was always an illusion. China and India, with 1.3 billion people each, were indisputably great powers. Russia was a recovering great power, not a new one. But Brazil, like South Africa, was an impostor, lacking the critical combination of population, resources and industry that entitles a country to a place in the first rank.
Brazil was a fairly plausible impostor during the years of the great boom in commodity prices, but for the past two years it has been in deep economic trouble. It was Dilma Rousseff’s misfortune to win the 2014 presidential election just as the bottom dropped out of the country’s economic “miracle.”
Her predecessor as president, Luiz Inacio “Lula” da Silva, exploited the boom to build a modest welfare state that lifted 50 million Brazilians out of poverty. Rousseff struggled to maintain those gains in the midst of Brazil’s worst recession since the 1930s – the economy shrank by almost four per cent last year – and became the least popular president in Brazilian history.
Her unpopularity, plus a huge corruption scandal that implicated some members of her Workers’ Party (though not herself personally), created the atmosphere in which it became possible for the Brazilian Congress to impeach her. She describes it as a “constitutional coup” designed to remove an elected left-wing government from power, and she is quite right.
Rousseff was not impeached for corruption. She was found guilty of window-dressing government accounts before the last election, in order to minimize the impact of the collapse in Brazil’s export earnings on her spending promises. It was a petty misdemeanour for which she received a grave punishment at the hands of a Congress full of people who have committed actual crimes.
It is universally acknowledged that the Brazilian Congress is one of the most corrupt legislatures on the planet. Of the members, 58 per cent are currently under investigation for involvement in the “Lava Jato” (car wash) scandal, in which
they allegedly got kickbacks on contracts with the huge, stateowned Petrobras oil monopoly.
Few of these people are associated with Rousseff, since the Workers Party holds less than one-10th of the seats in Congress and depends on coalitions for a majority. A cynic might say that’s why Rousseff has supported federal prosecutors who are investigating Lava Jato – but the same cynic would also have to acknowledge that one of the motives for impeaching Rousseff is to shut the investigation down.
Indeed, the majority leader in the Senate, Romero Juca, was secretly recorded discussing precisely that goal – and he is a close political ally of Michel Temer, Rousseff’s former vicepresident (from another party), one of the leaders of the campaign against her, and now her successor as president.
President Temer himself has been accused of skimming $300,000 off a nuclear-energy contract, so it shouldn’t be too long before some kind of amnesty is cobbled together for everybody who faces indictment in the Lava Jato case.
Under Temer, a centre-right politician, it also shouldn’t be long before austerity measures begin to cut into the increased spending on education and welfare that has transformed the lot of the Brazilian poor since the turn of the century. Money is scarcer now, of course, but there are other possible ways of coping with it than just imposing more sacrifices on the poor.
So what kind of Brazil emerges from this sorry story? It will be a much diminished country in wealth, in reputation, and in international influence, and the social and economic gulf between the rich and the rest will widen once again.
None of the BRICS apart from India is doing very well at the moment: Russia’s oil income has collapsed; China’s claims of continuing economic growth are deeply suspect; and South Africa’s economic growth last year was 0.5 per cent. As Warren Buffet once said, it’s only when the tide goes out that you find out who’s been swimming naked. Everybody, it turns out.
What’s especially sad about Brazil is that it really did use its boom to rescue a generation of the very poor from misery, and was starting to address the extreme corruption of its political system as well. Now most of that will be rolled back. The crooks are back in charge.