Brazil’s Political Malaise
On February 27th the Dialogue hosted an open discussion on the political situation in Brazil. The event featured Claudia Trevisan of the O Estado de S. Paulo, João Augusto De Castro Neves of the Eurasia Group, and our Peter Hakim, president emeritus of the Inter-American Dialogue.
Six months after President Dilma Rousseff was impeached, Brazil’s political future remains uncertain. President Michel Temer’s low approval ratings continue fall and the Brazilian electorate remains frustrated and cynical. Meanwhile, the Lava Jato investigations show no signs of slowing down, including the transnational Odebrecht case, and the 2018 presidential elections loom on the horizon. Still, while necessary reforms have yet to make their way through Congress, the beleaguered economy has begun to improve gradually, which may help to lift public confidence.
Trevisan began with a conversation about the recovery of Brazil’s economy. The country’s low inflation, high rate of foreign direct investment, and strong currency are all promising signs. Unfortunately, according to Trevisan, these milestones of economic recovery have not yet translated into improved conditions for most Brazilians, as unemployment remains dangerously high. Trevisan noted that Brazil’s future will rely heavily on the upcoming elections as well as the results of ongoing corruption investigations.
De Castro Neves agreed with Trevisan that, despite optimistic signs in Brazil’s economy "we should expect some more bumps in the road for Brazil in the coming months". These bumps will likely take the form of protests fueled by public outrage towards corruption scandals as the Lava Jato investigations continue. According to De Castro Neves, the two underlying forces of change in in Brazil today are the government’s economic structural reforms and the Lava Jato scandal. De Castro Neves concedes that it is uncertain what the results of these two transformative cycles will be, but there is potential for Brazil to lead Latin America in regional integration efforts to address corruption as the country reacts to the Lava Jato.
Hakim highlighted what he believes to be the three main factors for change in Brazil: the economy, corruption investigations, and the 2018 elections. In response to the point of popular discontent brought up by De Castro Neves, Hakim seemed skeptical that the Temer government will be able to handle massive public backlash effectively, especially if the Lava Jato investigations further implicate his administration. Hakim agreed that structural reform could play a major role in the upcoming political landscape noting that “the next big battle Temer will have to fight is for sustainable pension reform”.
The panelists agreed that it is too soon to predict Brazil’s 2018 elections, but the results will likely be decided by a variety of factors, includingthe Brazil’s ongoing recovery from the longest recession in the country’s history as well as allegations arising from the Lava Jato investigations. Restoring public trust in the government will be difficult for the next administration, whoever may lead it, but it could likely be achieved by much needed structural and corruption reforms.