By Victoria Herring
Rio de Janeiro, Brazil, the site of our most recent Olympic games, is a vibrant city that serves as the cultural heart of one of the largest and most politically turbulent emerging countries in the world. Amid its great tourist attractions, be it to the Amazon rainforest or the beaches of Copacabana and Leblon, a political controversy has pitted many parts of the population against each other. The powerful tug of corruption has enveloped Brazil’s political atmosphere, leading to the impeachment of former President Dilma Rousseff and the worst economic crisis since the 1930s. Unemployment has reached unprecedented heights at 11.2%, and with the country spending millions on Olympic infrastructure and combatting the spread of the Zika virus, Brazil’s economy is at a dangerous tipping point. What precisely is the root of this complicated problem, and what can be done to mend it? To understand Brazil one must understand the impeachment of Dilma Rousseff in August of 2016 and how the country reached the point of impeaching their president.
In order to understand the crisis, one must look to history. Brazil has long been known as the pioneer letter in the BRICS acronym, naming the countries of Brazil, Russia, India, China and South Africa. These “Big Five” are depicted as being in a newly advanced stage of economic development, with a promising future as the world’s leading trade partners and producers. What kind of leadership resulted in this enormous catapult onto the international stage? In 2002, the Worker’s Party of Brazil elected Luiz Inácio Lula da Silva, frequently shortened to Lula, an endearing and soon to be a controversial figure. This election was one of tremendous importance because of the type of leader Lula would turn out to be; Lula’s education ended in elementary school; he was a poor, uneducated man, and had never run for public office. A leader of this caliber was unheard of in Brazil since the country gained its independence in 1822.
In 2002, Brazilian citizens were in a state of unrest. Many predicted the protests against Lula, due to his seeming lack of qualification to be president, would be enough to discourage voters from supporting his faction, the Worker’s Party. Interestingly, he gained popularity by maintaining the liberal policies of previous governments, as advised by the Washington Consensus’s standards for economic prosperity to developing countries. His leftist policies promoted investment in infrastructure and public goods and services, creating a burgeoning economy by encouraging production and heightened activity. Lula enjoyed the highest approval rating of any Brazilian president in recent history at 87% approval in 2007. His approval rates remained very high until the following year when the American mortgage crisis sent the world economy into a massive recession.
Nearly every single country had to respond to the American crisis. Brazil chose to increase spending in order to maintain its prosperous economy. Unfortunately, this huge public spending created a massive debt. After one year, the national deficit could be represented by sixty-five percent of the country’s total exports; in other words, the capital spent on internal improvements was such that it would take 65% of the country’s products to pay for the debt. How did this affect the social environment? The answer is dangerously simple: it did not.
The social effects of this increase in spending were not felt by the country’s citizens, as it takes months or even years for economic complications to affect a republic’s people personally. This allowed for Dilma Rousseff to be elected with the support of Lula’s popularity in 2007; however, as a president, she was not an independent leader. The previous president handpicked Dilma and her policies were direct recommendations from Lula. During her presidency, people began to feel the consequences of the massive deficit. Unemployment began to rise slowly, and more citizens were falling below the poverty line. As part of the country’s welfare program, the poor have the option of receiving a “bolsa familia,” or “family basket,” that provides necessary material resources to poor and very poor families, or those earning under $200 a month. Main features of this program clearly show how it creates a cycle of deficiency: hard cash is delivered to the family, who has the freedom to use it in whichever manner they choose to. However, with no conditions for continuous aid, namely mandatory vaccinations or attendance in school for children, the money is not able to break the cycle of poverty. In addition, a family may receive this assistance permanently as long as they fit the income criteria. The Worker’s Party wins the majority vote of the poor, and has done little to change the conditions in which their constituents can escape from poverty. This unfortunate truth led to an exceedingly close election between candidates Dilma and Aecio Neves, her opponent, in 2013. The people knew something was terribly wrong, yet the poor served as a significant force in electing the incumbent as opposed to Aecio, who pledged to revise the current welfare system.
Just last year, Brazil learned that Dilma Rousseff had been masking Brazil’s massive deficit over the years. Further economic scandals among Worker Party “elites” and Dilma herself – namely with oil giant Petrobras – revealed a state of corruption never before seen in Brazil, calling for a reassessment of transparency and integrity within the government. It is important to note that the goal of such corruption was not to put money in politician’s pockets, but to perpetuate the power of the Left. Accused of hiding the deficit from the people illegally under the guise of creative accountability, Dilma was impeached after an arduous process in August 2016. This crime of responsibility came with outrage from the people, who protested and largely participated in the forces to either impeach or keep her in power during the months leading up to the contentious vote. An indispensable aspect of the nation – freedom of speech and of press – proved to be instrumental in this turbulent time. The independence of the federal police force, supreme tribunal court, and the public ministry significantly helped to unveil the vast amounts of corruption taking place. The transition of power to her vice president, Michel Temer, led to much relief and the call for change in the form of transparent economic policies from the Brazilian people.
As president, Temer has reinstated the economic standards of the Lula years – investment in infrastructure and public goods. With the rise of investment in public goods and laissez-faire, the country’s currency, the real, has gained value. The movement towards free enterprise stimulated growth, particularly among trade and the stock market. Today, Brazil’s economic situation is slowly improving. Its people are hesitant and untrusting of the government, and understandably so. It will be a gradual path to recovery; nonetheless, the vibrant culture and warmth of Brazil, with one of the largest and most influential economies, is alive and well.