by Teodoras Žukas

The impeachment of former president Mrs. Rousseff symbolized a new political saga in Brazil, yet nobody is currently cheering in samba country. Brazil is going through a period of shabby politics, scandals and trials. Sadly, all of this reflects in the ordinary Brazilian’s wallet and creates a lack of possibilities. The measures which need to be implemented, are quite clear, but there is practically no one who will be able to lead the country from a stalemate.

Every nation has something to be proud of, Italy has a splendid cuisine while Germany can brag about its work ethics, however, when it comes to Brazil, football and samba come to one’s mind. Unfortunately, such an impression can easily be misguided since today Brazil is more known for its notoriety and dirty politics. In recent years the political landscape has definitely strengthened this stereotype. The impeachment of president Dilma Rousseff, massive corruption by high officials and the perpetual political instability of Latin America’s biggest economy is what Brazil is now known for.

Just a year ago it looked like Brazil might moving in the right direction, following the scandalous ousting of president Rousseff and the biggest ever anti-corruption campaign called ‘Operation Car Wash’, the general mood was rather positive. The country witnessed an unprecedented boom in civic activity, as throughout the series of political scandals the largest city squares were crowded with people who were fed up with Brazil’s black box politics. It also looked like fundamental reforms were underway too as Brazil’s judiciary, police and governance levels experienced a shock therapy. Likewise, the new presidential successor Michel Temer seemed to bring a breath of fresh air in Brazil’s contaminated political environment.

In spite of this, today, Brazil’s political system finds itself in catastrophic turmoil. President Temer faces charges in a bribery case based on testimony by an owner of the world’s largest meat packer JBS SA. Prosecutors say that back in 2006, when Mr. Temer was still a congressman, he created a bribery scheme which remains to this day. The charges extend to Mr Temer’s closest colleagues and several cabinet ministers too. The whole political group allegedly funneled over 587m reais (€153m) from state-run institutions such as Petrobras and the Brazilian Lottery into the pockets of lawmakers.

A couple of weeks ago Mr. Temer managed to get 251 votes against 233 in the lower house of Congress and stopped a corruption investigation which would have immediately forced him to step down for at least six months. Indeed, current situation is causing colossal civic discontent and even bigger political fragmentation and polarisation. The approval ratings of Mr. Temer and his government clearly reflect the Brazilian populations’ reaction to the endless corruption within the governing elite. In a recent poll the trust in Mr Temer’s government plunged to 3% while amongst under 24-years-olds, Mr. Temer’s approval ratings hit zero.

Economic consequences in this time of instability are clearly visible. In 2015, at the height of political obscurity, the unemployment rate reached 10.2 percent, the GDP shrank by 3.8 percent and investments were leaving country. There were signs of economic recovery following the impeachment of Mrs. Rousseff, however, to this day investors express doubt. They are waiting to see, if Temer can deliver the public-sector reform needed to tackle the budget deficit, which is costing Brazil its investment grade credit rating.

Indeed, the most significant economic reforms that Temer’s government must implement, consist firstly of opening up a relatively closed economy. The other aspect of necessary economic transformation relates to the public sector; a tax reform, labour market reform and bringing state spending under control. Doing all this would balance the current chaotic and erratic public sector and would liberate resources for other areas. It would be a big mistake to see the above-mentioned reforms as entirely technical. They are certainly highly political and even politically philosophical — in other words Brazil has to answer the fundamental question on how its state, politicians and officials operate, and explain the role of the ordinary citizen in the state structure. The system needs to move from corruption to probity, from haziness to predictability and from being a semi-plutocracy to a country serving the people.

These reforms will need tremendous leadership, political will and support by the vast majority of Brazilians. Mr Temer quite obviously does not have the proper leadership skills, nor the political will and a certain amount of support to carry out these reforms.

In the autumn of 2018 Brazil will elect a new president whose main mission will be that of leading the country through these dark times., however, the outlook for the presidential election is not at all bright.

The current leader in the polls, Luiz Inácio Lula da Silva, held the presidential office from 2002 to 2010, and has been sentenced for corruption and so might be prevented from running. Second in the polls is Jair Bolsonaro, a former army captain and a radical right-winger who makes Donald Trump look moderate and self-disciplined. Neither of these candidates would provide the reforms Brazil now needs, Mr Lula has been discredited and comes from notorious circles of Brazil’s governing elite while Mr Bolsonaro is a populist leaning towards authoritarianism, who would definitely polarise the country further. As Martin Wolf from Financial Times correctly asks: “Where is Brazil’s Emmanuel Macron?”

Following the political scandals in Brazil, the ‘House of Cards’ official Twitter page tweeted “Tá difícil competir”, in Portuguese meaning “Hard to compete with”, certainly, Brazil has become the symbol of corrupt and appalling politics and it will require an enormous effort to change this image.

17 December 2017
This text was published in Bullseye issue 70