Turbulent Brazil

Scandals and a sour economy threaten a president

Scandals involving two of Brazil’s biggest companies, Odebrecht and Petrobras, and the party of President Dilma Rousseff are threatening its global standing.

Brazil, the world’s fifth-largest country in population and size, is a relative newcomer to the international big leagues. It is the “B” in the so-called BRIC group of countries — Brazil, Russia, India and China — emerging as major economic powers. To be taken seriously, Brazil had to bring under control its classic ills, including military rule and galloping inflation, and it did that.

Now it is slipping. A scandal that involved Odebrecht, Latin America’s largest conglomerate, with interests running from oil field services to logging, and Petrobras, Brazil’s state-controlled oil giant, accused of passing bribes to Ms. Rousseff’s Workers’ Party, has triggered mass protests demanding her departure. Her term runs until 2018.

Besides the scandal, Brazil also faces growing economic problems. The World Economic Forum ranks the quality of its infrastructure 120th out of 144 countries, for which it needs $69 billion in foreign investment. Brazil’s central bank raised its interest rate to a sky-high 14.25 percent last month; the country’s growth is forecast to drop by 1.5 percent for 2015; and inflation is back.

Yet the situation is not impossible. Brazil could cut the high cost of benefits, starting with public sector pensions. Unemployment is a not horrible 6.9 percent. The behemoths Odebrecht and Petrobras need to be cleaned up, as does Brazil’s water before it hosts next year’s Olympics.

It can be done. Brazil’s generally optimistic approach to problems, which pulled it out of past doldrums, can prevail. President Barack Obama patched up America’s differences with Ms. Rousseff over U.S. intelligence surveillance of her communications with a visit to the White House this summer. The United States should continue to encourage its big friend to the south.