Brazil’s Quagmire: Messy Conditions

The more moving parts you add to a machine, the trickier it gets to keep the machine running, let alone functioning optimally. Dilma Rousseff, Brazil’s president, may be reeling from trying to keep the parts in motion (some cracks self-inflicted) but her nation could be at a major transition point, for better or worse.

The president’s approval rating has tanked to the mid single digits- it’s been less than a year since her reelection. This Sunday, an estimated 250,000 held demonstrations across 16 states, Rio de Janeiro, Sao Paolo and Brasilia, the latest in a slew of marches that have ranged from anti-Dilma, anti-government, anti-austerity, pro-Worker’s Party, anti-Worker’s Party, anti-corruption… pro-expressing frustration.

The eye of the storm is an ever expanding corruption scandal concerning Petrobras, the state owned energy firm and largest company in Brazil, where high ranking officials colluded with construction companies to overcharge the oil giant. At least $200 million was given to the governing Worker’s Party, out of an estimated $3 billion total bribes.

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Add in the global drop in oil prices and it is easy to see why Brazil is struggling economically.

To maintain Brazil’s prized investment grade rating, the government has begun to implement some measures of austerity- at the cost of alienating the Worker’s Party base. Ms. Rousseff’s governing coalition has fallen apart. Some have rebelled against her austerity push, others have been arrested or otherwise implicated in the corruption probe.

The government has already passed a reform to restrict to access welfare and unemployment insurance and is attempting to cap pension and labor benefits (some of the most generous in the world) but each of these measures has been watered down. Now there is talk of raising corporate taxes and repatriating money held abroad.

Brazilians are waiting for the results of a probe into accounting practices by Ms. Rousseff’s government last year during her re-election campaign. If the probe finds her government responsible for delaying the repayment to lenders who had funded social programs (making it look as if there was more money than in reality), then the legislative body has grounds for impeachment, as more and more Brazilians call for it.

The moving parts look as if they may fall apart at any moment, but in the middle of this is a heartening sign. An independent judiciary able to hold corrupt individuals to task, no matter what their position, is the cog that keeps the machine going.

While global economic trends are not in Brazil’s favor, the Petrobras scandal may shake out the nation’s worst corrupt actors. We are at a fraught and delicate moment for South America’s largest economy.

By | 2016-12-01T12:45:22+00:00 August 18th, 2015|Categories: Contested Spaces|Tags: , , |0 Comments

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