Rousseff’s Legacy Ready to Crumble
When Brazilian President Dilma Rousseff begins her second four-year term on January 1, 2015, she’ll face a very different country to the one that she began governing in 2010. After two terms in office, former President Lula de Silva, also of the Workers’ Party (PT), managed to place his country among the principal emerging global powers, and as the most prosperous and influential country within Latin America.
The challenge before the first woman president of the South American giant is massive. As well as having to deal with enormous economic and financial difficulties, she has to take on the biggest scourge not only of Brazil, but of many emerging and developed countries: corruption.
The rot has set in to such an extent that Rousseff has had to fire ministers from her cabinet, while the judicial system is putting directors of principal Brazilian businesses behind bars, and even the most important firm in the country — state petroleum company Petrobras — is accused of spending millions on bribes to secure contracts. The people have demanded change since fierce street protests began in 2013, initially in response to epic levels of spending on the football World Cup.
After October’s elections the president announced measures which seem to copy those advanced by her main opponent Aécio Neves, a defender of the free market.
To confront the severe economic crisis that has almost brought Brazil to a recession — when four years ago it boasted an annual growth of 7.5% — Rousseff has had to alter her economic policy. As her opponents in the Social Democracy party have suggested, after October’s elections the president announced measures which seem to copy those advanced by her main opponent Aécio Neves, a defender of the free market and against state hand-outs.
Additionally, we now know the name of the man who will almost certainly be Finance Minister, the missing piece in deciding the direction that the Brazilian government will take. The press have tipped Joaquim Levy, a graduate of the University of Chicago who occupies an important position in the country’s second private bank, Bradesco. These early signs haven’t made the progressive power-base of the governing party happy. With the selection of Levy, Rousseff seeks to restore investors’ confidence and reactivate the country’s economic growth.
The second economic battle that Dilma Rousseff will have to fight is against inflation, which, according to several indicators, could reach some 7% this year. This has undermined the spending power of the emerging middle class, who have seen their living standards fall.
The president recently announced cuts to the 2015 budget, which has been hit by low industrial output, a decrease in exports due to a fall in Chinese demand and a decline in the price of primary goods. This combination of factors could endanger several social spending programs that Brazil has carried forward from the Lula period.
On the international level, huge changes in Brazil’s relationship with other countries are unlikely. In Latin America, everything suggests that the friendships begun with Venezuela, Argentina, Cuba, Nicaragua, and others will continue on the same course begun by Lula da Silva and maintained by Rousseff during her first term. Brazil’s support of groups working for regional integration will also be maintained, such as the Southern Common Market (Mercosur), the Community of Latin American and Caribbean States (Celac) and the Union of South American Nations (Unasur).
With the government of Nicolás Maduro in Venezuela, submerged in an unprecedented crisis and criticized globally for serious human rights violations, the Brazilian government will continue its special relationship — the leftist wing of the PT will continue to dominate foreign relations — although this will be more cautious and moderate.
Rousseff will have to resolve Brazil’s deteriorating economic and financial situation and tackle corruption within her government.
This explains, for example, the strong reaction in November to an unannounced trip made to Brazil by Venezuela’s former Foreign Minister and current Minister for Communes and Social Movements Elías Jaua in 2011. Foreign Minister Luis Alberto Figueredo demanded an explanation in strong terms, saying that “what occurred could be seen and interpreted as an interference in Brazil’s internal affairs.”
Despite this, Jaua managed to sign in October a series of agreements on productivity training and development between the Venezuelan government and the Landless Workers’ Movement of Brazil (MST) in Guararema, San Pablo State.
Nor is a closer relationship likely to be possible with the United States, despite the diplomatic congratulations offered by President Barack Obama to Rousseff after her re-election. Relations have been permanently soured by the revelations of Edward Snowden concerning the massive espionage operations of the US National Security Agency, even while the US Department of State hails Brazil as its eighth biggest commercial partner, and points to the US as the second biggest destination of Brazilian exports.
The president has too many problems to contend with to open new fronts on international cooperation. Rousseff will have to resolve Brazil’s deteriorating economic and financial situation, and tackle corruption within her government, if she wants a graceful exit from her second term. She won’t find it easy.