Brazil: Impeach Dilma, but Don’t Stop There
For those who lived in Brazil during the Fernando Collor de Mello presidency, the word “impeachment” is not much cause for alarm. But those who are too young to remember should know that the impeachment of a president is not an end-all solution, and ousting President Dilma Rousseff could prove to be just the beginning.
If it seems unique that the country’s first woman president faces accusations of involvement in a massive corruption scheme, you should know that history indeed repeats itself.
Brazil’s First Impeachment
In 1992, thousands of face-painted young people descended upon the streets of Brazil.
They demanded the removal of Fernando Collor de Mello, the first democratically elected president after decades of military rule. Beyond Collor’s impeachment, a whole generation rallied against rampant inflation, price controls, and widespread corruption.
Just like President Rousseff, Collor stood accused of having played a role in an influence-peddling scheme. In an attempt to defend himself, Collor allegedly paid US$2 million for falsified documents that proved useless in the end.
Afraid of what may happen if he remained in office any longer, Collor resigned hours before the Senate its vote on impeachment. When the tally was finished, only three senators voted in Collor’s favor, while 73 voted for his removal.
Brazil’s first democratic-era president lasted just two years.
Collor surely lost many supporters when he froze thousands of Brazilian savings accounts and converted them into government bonds. However, what really turned the economic environment around in the 1990s was his privatization program, which transformed the economy and ushered in anti-inflation sentiment in the country that lasted an entire decade.
By the end of Fernando Henrique Cardoso‘s second term in early 2003, previously failing state-owned firms sold off by Collor and Cardoso were becoming more profitable, the rise of Brazil’s external debt notwithstanding. However, long years of privatization and inflation-taming measures produced unintended consequences, leading to the rise of progressive politics.
Among young people, proletarian union leaders like former President Luiz Inácio “Lula” Da Silva became popular again. A then unknown “radical” front within the Democratic Labor Party began drawing attention for its less populist approach.
The cultural transformation gave way to a true political revolution when, in 2003, Lula became president. Young people once again painted their faces; this time to celebrate a “man of the people” winning the election.
But the public soon learned that “their man” certainly did have many plans in store for Brazil, and most did not include “the people.”
The People’s Corrupt President
Corruption is sometimes said to be a “natural trait” among Brazilians, but patience is not so easily found in them.
After the changes kick-started during the Collor and Cardoso administrations, time would have been the best ally for the relatively freer economy. Relaxed economic policies in the proceeding decade would have given Brazil the push it needed to become truly prosperous. However, Brazilians’ lack of patience brought the worst of socialist policies back into the mainstream.
Lula’s charisma and appeal among the poor made him an international star, but he lacked the political capital to follow through with his radical policies.
During his two terms in office (2003-2011), Lula was embroiled in scandals. His party was accused of extortion, nepotism, and vote buying. His big-government spending and extremist socialist past sent shocks through the market. Brazil’s currency devalued and the country’s credit rating dropped.
Instead of pursuing more radical socialist policies, however, President Lula chose a cautious approach similar to his predecessor’s. His centrist policies, however, were not continued by Dilma Rousseff, Lula’s protégé. Given Rousseff’s background, her involvement with guerrilla groups during the military dictatorship, her administration would more successfully push forth their socialist agenda — or so they thought.
As we know, the market does not respond well to state interventionism.
The Rousseff Era
The Rousseff administration has advanced the sort of tax hikes, inflation, and interest rates that provoked similar social unrest during Collor’s presidency.
Unlike Lula, Rousseff’s persona doesn’t resonate with “the people.” When accusations emerged tying the president to what is likely the largest corruption scandal in Brazil’s history, tens of thousands took to the streets to demand her removal from office.
Like Collor, Rousseff’s name is directly linked to the corruption scheme, and because of the privileges of political office, only Congress can hold her accountable through impeachment. This case differs from the corruption in the 1990s, however, since several congressmen have also been named in the scandal.
If the old saying holds true, and we are doomed to repeat the mistakes of our past, Rousseff will soon meet the same fate as Collor. Mounting public indignation could lead to her stepping down, but another candidate with the same or worse statist policies would likely end up taking her place. Corruption, as I noted in a previous article, is the natural consequence of interventionism.
Populism has huge emotional appeal in Brazil. Pervasive economic ignorance — even among conservatives — means Brazilian classical liberals are unlikely to find drastic cultural change or a shift from state intervention in the economy.
Impeachment may, in fact, be the best response to Rousseff’s misgovernment, but it won’t solve Brazil’s problems alone.
Translated by Daniel Duarte. Edited by Guillermo Jimenez.