Brazil’s political crisis explained

Por frombrazil
Dilma Photo
Brazil president Dilma Rousseff is under attack from all sides.

While much has been made of Brazil’s economic downturn, a toxic political climate is equally responsible for the current woes of President Dilma Rousseff and her government. Mauricio Savarese looks at the complex backdrop to the crisis.

By Mauricio Savarese
São Paulo

There is no easy explanation as to why, just under a year after being reelected by a narrow margin, President Dilma Rousseff runs the risk of not completing her term in office. It took respected consultancy firm Eurasia months, for example, to weigh up all the factors and raise the chances of her resigning or being impeached from 30% to 40%. But one thing is easy to predict: whatever the outcome, the current climate of polarization is here for a while – perhaps even until after the next elections.

Although opposition militants argue that Rousseff has only herself to blame for her troubles, pro-government forces place the blame on kingmaker party the PMDB, and defeated PSDB presidential candidate Aécio Neves. Leftist groups continue to defend Rousseff’s mandate but oppose her fiscal policies. While it is difficult to know where the saga will end, there are clear reasons behind Brazil’s political crisis.

The aggressive, toxic campaigns waged by both candidates in last year’s elections are as good a place to start as any. Rousseff came close to defeat against Neves, who himself only made it to the second round run-off on the final straight – environmentalist Marina Silva had been running second in the polls until then. And the contest was only so tight in the first place because of a sluggish economy and the emergence of a new wave of scandals involving key members of the government. In 2013 most bets had been on Rousseff’s reelection.

After a narrow defeat, Neves barely recognized his opponent’s victory in his concession speech. Such a tight margin, the closest in Brazilian history, had two immediate effects: a smaller mandate for the winner and more sore loser griping from the other side. Impeachment talk emerged right after Rousseff was proclaimed the victor, and today it often feels as though the election never ended.

After a leftist-sounding campaign, the president turned her attention to the financial markets in a manner that shocked many of her voters. After much indecision, she picked American-trained Bradesco Bank economist Joaquim Levy to be her Finance Minister, and appointed a number of other conservative ministers, some of whom would have been more comfortable in a Neves cabinet. Before the end of the year she had managed to lose touch with her base, while at the same time failing to win over her adversaries.

Since then the crisis has all been about the government’s controversial ally, the PMDB. The centrist party, which has itself been associated with scandal more than a few times in the past, was never 100% on Rousseff’s side, and today it would be a push to argue that even 50% of its deputies and senators are still with the president. During the campaign some of the party’s key figures were already placing their bets on Neves, and the division has remained even after the president’s victory. Opposition forces were strong enough to elect her main PMDB adversary, congressman Eduardo Cunha, to the role of Speaker of the Lower House until February 2017.

Rousseff believed that her decisions would restore the credibility she had lost in her first term thanks to growing spending and the use of backpedaling, a form of delaying repayments to lenders who had provided money to pay for welfare programs, making the country’s books appear more robust than was actually the case – a breach of fiscal responsibility laws say the opposition, but common accounting practice according to the government.

But in fact those unpopular steps, which contradicted profoundly with the tone of Rousseff’s campaign, were eating away at her popularity. The Lower House, led by Cunha, began to think of ways to put further pressure on an already unpopular president.

Political foes such as Eduardo Cunha have made Rousseff's life a misery
Political foes such as Eduardo Cunha (second from left) have made Rousseff’s life a misery

The lack of enthusiasm for the new administration had been evident since January 1st, when Rousseff’s somewhat flat inauguration was attended by less than 5,000 people – around 10 times fewer than at the start of her first term. Rousseff picked a number of ministers that patently had few qualifications for their positions, solely to maintain the support of their parties in Congress. Cunha’s election as speaker may have been the first sign that the strategy had failed, but others have followed.

Despite being involved in multiple scandals, including the Petrobras investigation, Cunha is a wily strategist. With the speakership he had the power to define the Lower House voting schedule, and to choose which congressional inquiries would move forward. This latter power includes what is described as “an atomic bomb” in Brasilia: in other words, whether or not to allow an impeachment process against the president to progress.

When Rousseff’s popularity sunk to single digits, all the opposition, which had been repeatedly stirring up protests against the president, needed was a motive to seek impeachment, and in Cunha they had found a willing ally.

Three possibilities have now emerged. One is to find a direct link between the president and the Petrobras scandal, while another option is for the Superior Electoral Court to strip both her and Vice-President Michel Temer of their positions because of the use of supposedly illegal funds in their election campaign. The third potential outcome, meanwhile, is to accuse Rousseff of breaking fiscal responsibility laws in the form of the aforementioned backpedaling.

All these three possibilities remain in play, but none are conclusive. If proven, they would also result in different outcomes: in the first and the third cases, Temer would take over from Rousseff, although rumors have suggested the vice-president himself may be implicated in the Petrobras scandal – something he has already denied.

If both Rousseff and Temer go, runner-up Neves would take over, with even those in opposition recognizing that such a decision by the Superior Electoral Court would not necessarily give them the legitimacy they would need to govern. Since the restoration of democracy in Brazil in 1985, impeachment charges have been brought only against President Fernando Collor de Mello, in 1992, when he was directly linked to corruption scandals that had emerged during his term, showing the difference between the two cases.

Rousseff has relied on a number of factors to keep her job. The first is her turbulent yet enduring relationship with former president Luiz Inácio Lula da Silva, the main power behind the Worker’s Party. She also hopes to maintain her alliance with the president of the Senate, Renan Calheiros, who could also yet be implicated in the Petrobras scandal. The third is the pragmatism of many business leaders, who think impeachment would represent a major setback for a young democracy.

Further complicating matters is that in the event that impeachment proceedings are instigated in the Lower House, Rousseff may decide to take her case to the Supreme Court. Unlike congressmen, Brazilian supreme court justices have little interest in the polls and nor are they yet much concerned with the investigations of the Petrobras scandal. It appears impossible to tell what the outcome of such an action might be. Brazil is not for beginners, as the songwriter Tom Jobim once memorably said – and the complexities of the current political crisis show that his words are as true now as ever.