Corruption on the Paranoá: The Impeachment of Dilma Rousseff

Tom McCarthy - Regular Columnist

Demonstrations in Rio de Janeiro call for the impeachment of President Rousseff | Image: José Roitberg

Living in the UK, we don’t tend to hear much about developments in the Latin American world. For various historic and ethnographic reasons, stories emerging from Central and Southern America tend to gain little mainstream press coverage here. It’s a shame really, because the Spanish and Portuguese speaking regions of the Americas are home to a wealth of captivating characters and arresting narratives.

Take the current furore surrounding Brazilian President Dilma Rousseff for example. After throwing her hat into the ring as the candidate of the Partido dos Trabalhadores (Worker’s Party) in 2010, Rousseff quickly dislodged centre-right Jose Serra from the top of the opinion polls. She won a majority of votes in the election itself, though did not meet the threshold required to take the presidency. A run-off against Serra followed, in which Roussef accumulated 56% of the valid votes, enough to take her to the Palacio da Alvorada. Four years later, the former Marxist-guerrilla saw off Aecio Neves after a hotly-contested re-election campaign that saw the closest race in twenty-five years. This week, Eduardo Cunha, the speaker of Brazil’s lower chamber, opened impeachment proceedings against Rousseff, following allegations of massive kick-backs paid to some of Brazil’s top businesspeople and politicians by the state-run oil firm Petrobras. It just so happens that during the period these bribes were been slid into accounts, Rousseff was chairwoman of Petrobras’ board of directors. Oh, and there are accusations of serious economic mismanagement too. Brazil’s economy is 4.5% smaller than it was this time last year, and the national currency has experienced a huge drop in valuation. And while we’re at it, it’s also worth pointing out that Cunha is himself accused of corruption (which he vehemently denies, of course), with an ethics committee set to decide whether to eject him from his position or not. It has already been proving that the speaker has been embezzling funds. Like I said, there are a lot of colourful characters in the Southern hemisphere, not that we don’t have our fair share of them north of the Equator either.

During her first-term, Rousseff enjoyed a good reputation based on tax-reduction for vital, ever-day necessities amongst other popular legislation in areas such as energy and banking. This meant very impressive approval ratings, peaking at 79% just two and a half years ago. In the political realm, however, that’s an aeon, and despite achieving re-election, a confirmation of a job well done in her first term, Rousseff’s acclaim amongst her electorate began to wane. By February of this year, only 23% of Brazilians leant her their approval as news of the alleged corruption broke and the economy sustained its descent further into recession. That figure now stands at around 9%. During Rousseff’s second term, welfare payments have been made by state-owned banks on behalf of the government, and the cash to repay them has not materialised. Thus, the ruling government is being funded by organisations operating under its duress, an action that is illegal under fiscal responsibility law.

Brazillian President Dilma Rousseff (right) and Minister Luís Inácio Adams (left) | Image: Agência Brasil Fotografias/Wilson Dias/Agência Brasil/Flickr
Brazillian President Dilma Rousseff (right) and Minister Luís Inácio Adams (left) | Image: Agência Brasil Fotografias/Wilson Dias/Agência Brasil/Flickr

There’s an unfortunate attitude of self-serving greed that permeates deeply into the modus operandi of Brazil’s ruling elites. Corruption is nothing new here, and the desire to tackle fiscally irresponsible actions is short in supply. But the implosive nature of this scandal should be very worrying for Brazilians, who have taken to the streets to protests the nefariousness embedded in the general political psyche. These protests have occurred throughout the year, in all of Brazil’s twenty-six states, with literally millions participating.

All this has occurred against the backdrop of a deterioration in the levels of growth displayed by the BRIC nations. This has most prominently been observed in China, where the target for this year was cut to 7%, the lowest in more than twenty years, which is testament to the fact that the larger an entity becomes, the more difficult it is to maintain a sustained level of growth. That country went credit-crazy, with the ratio compared to national GDP standing at over 250% according to the Economist. With so much of that credit funnelled into large-scale construction projects, there was always a high risk factor. Many houses are yet to become homes, however, and China’s ghost cities are renowned.

The ties between the BRICs are numerous, but in the Brazilian context the decrease in Chinese demand for steel could impact particularly badly on the former, whose iron-ore stocks are utilised in a big way by the latter. This year China began selling off large amounts of its commodity stocks, presenting further uncertainty for Brazil’s economy. The economy is forecast to shrink by 3% this year. Household consumption has dropped for the first time since 2003. This is the first year since 1997 that the Brazilian government has not set money aside to pay back creditors, and this is a country with high-levels of interest rates (approximately 14%). Inflation stands at 14.25% and unemployment is expected to reach the double-digits next year too. In short, the country is standing on the precipice of a major economic crisis, with numerous economists stating an outright depression could be on the way.

The whole debacle is also indicative of the fractured nature of Brazilian politics, with fissures emanating from Brasilia like a cracked mirror. Eduardo Cunha’s decision to open impeachment proceedings against his President appears to be little more than a translucent attempt to deflect some of the flack been aimed at himself, given the substantiation of those corruption claims. That is almost certainly true, but it doesn’t change the fact that the Roussef administration has questions to answer as well, and that the decision to impeach her won’t add to existing woes.

For the time-being, this week will see the first stages of the proceedings, with a special committee due to convene and decide whether to send the case to the full Chamber of Deputies, the lower house of the National Congress. If they do, two-thirds of the Chamber will need to vote in favour of a formal trial in the Senate, who in turn will need a two-third majority to oust the half-Bulgarian executive. All in all, it’s a sorry state of affairs for a country that has made strides over the past two decades, and the longer the proceedings are dragged out, the more damage will be felt by ordinary Brazilians as instability is fed.