Can anyone save Brazil?

Patricio Navia

Buenos Aires Herald, April 6, 2016


As pressure mounts on President Dilma Rousseff to resign, many are preparing for what will come next in Brazil. Regardless of who is in power, Argentina’s powerful neighbour faces colossal economic hardships. Given that Rousseff is more preoccupied with saving her presidency than saving the country, the president is now part of the problem, not part of the solution. However, it is unclear whether any of the leaders that could succeed her will be in a position to steer the country out of troubled waters and restore sustainable economic growth. Though Rousseff’s departure — either through resignation or a lengthy impeachment process — will open a window of opportunity, there is a bumpy road ahead for whomever takes control of the presidency at the Planalto Palace in Brasilia.


In recent weeks, the president has alienated allies as she has resisted calls for her resignation and fought the ongoing impeachment process. Even her decision to appoint Luiz Inácio Lula da Silva to her Cabinet was perceived as a desperate move to protect her mentor from an ongoing corruption investigation and to rally support against her impeachment among legislators who are still loyal to the former president. Many left-wing legislators, including some within her Workers’ Party (PT) seem as if they are inclined to favour Rousseff’s resignation, as that would offer the party an alternative and a chance to regroup around Lula in case of an early presidential election or for the municipal elections that will take place in October.

Rousseff’s resignation would clear the way for Vice-President Michel Temer to assume the presidency. Temer, a 75-year-old career politician, has managed to build an impressive network of support using government posts and other forms of patronage. Temer would be an unlikely politician to undertake fiscal reform, cut waste and introduce more efficiency in government spending. Because Temer is also being investigated by those investigating corruption, Rousseff’s resignation would not guarantee an end to instability. His chances could also be derailed if the Superior Electoral Court chooses to nullify the results of the 2014 presidential election and call a new election (which could be held concurrently with the municipal elections in late October).


Some supporters believe that Temer can emulate former Vice-President Itamar Franco, who replaced former leader Fernando Collor de Mello, the president who resigned in 1992 as another corruption scandal emerged. Franco appointed Fernando Henrique Cardoso, colloquially known as FHC, as his Finance minister. FHC’s “Plan Real” stabilized the economy and helped him to be elected president in 1994. Though hoping that Temer becomes a new Itamar Franco is wishful thinking, a Temer presidency would bring some hope.


If the crisis also brings down Temer, the field of presidential hopefuls can be restricted to three people — Aécio Neves, Lula and Marina Silva.


Opposition leader Neves, the 56-year president of the Brazilian Social Democracy Party (PSDB), has the advantage of having narrowly lost to Rousseff in 2014. Yet, since the corruption scandals have damaged the entire political class, Neves risks being punished by voters who might want everyone in the ruling elite to go.


Former president Lula (2002-2010),who is also being investigated, remains popular among the poor, the largest voting bloc. The country’s poor might have abandoned Dilma (in fact, they never quiet supported her very strongly), but Lula remains highly popular with them.


If the corruption scandals render Lula inviable, many left-wing legislators will turn to Marina Silva, the popular outsider candidate who ended up third in 2010 and 2014. Silva, a political activist who grew up in abject poverty and worked as a housemaid before entering politics, served in then-president Lula’s Cabinet as environmental minister. After resigning in 2008, she ran for president in 2010, receiving 20 percent in the first round vote. In 2014, Silva was the running-mate of Eduardo Campos, the business-friendly leader of the Brazilian Socialist Party. When Campos died in a plane crash during the campaign, the environmental leader replaced him as a candidate, winning 21 percent in the first-round vote.


An evangelical, Silva is staunchly opposed to abortion and same-sex marriage. She espouses a vision of big government — with subsidies and social spending — but has also spoken out against government waste and excessive bureaucracy. Her critics fear that she would be a loose cannon; her supporters claim that she can undertake the structural reforms that Brazil needs, precisely because her support does not depend on local party bosses.


Though she faces unbearable pressure to resign, Rousseff will hold on to power for as long as she can. Either because she won’t have enough support to resist the impeachment process in the lower chamber or because pressure from civil society and economic actors will mount, it is likely that she will be forced out of office before the end of her term in 2018.


Her departure will not restore faith on the Brazilian economy. It will barely open a window of opportunity for a new leader to begin undertaking the painful reforms that Brazil needs to restore economic growth and develop sound macroeconomic fundamentals. It is not clear that any of the likely successors will have the strength or political support to restore international confidence in the future of Brazil.