Dilma and Brazil: A View from Washington

Brazilian President Dilma Rousseff at the U.S. Department of State in June 2015.

Only nine months have passed since President Dilma Rousseff‘s visited Washington, where she was hosted by President Barack Obama. The US visit was an effort to bolster confidence in Brazil and abroad. With her public support depleted and a growing threat of impeachment, Rousseff sought to highlight her government’s commitment to a policy course—including expanded commerce with the US—that would reverse the country’s economic deterioration.  Her trip to Washington was a signal that Rousseff planned to embark on a more pragmatic, less ideological approach to the economy and foreign policy. 

The visit, as it turned out, had little consequence. Public approval of the Rousseff government remained at historically low levels, and the Brazilian economy continued to drift downwards. And, instead of newly invigorated ties, the US-Brazilian relationship seemed to lose most of the little energy it had left. There were reasons for Washington’s growing distance from Brazil. As the calls for Rousseff’s impeachment or resignation grew, Brazil’s politics were becoming increasingly vitriolic—and the US had no interest in getting itself visibly involved. Brazil had become far more inward looking, more fixated on its domestic problems and less able to play a significant regional or international role. US investors and exporters were looking elsewhere, increasingly uneasy about Brazil’s deepening recession and rising inflation. For its part, the US government had no real capacity to help Brazil address it multiplying problems. Senior US officials acknowledged that they had no instruments to assist the country’s troubled economy.

There is just not much the US can do to help Brazil at this point. The Brazilian economy is in wretched shape and continues to stumble. The debate over whether the cause of the economic shipwreck was external forces—like the sharp drop in Chinese demand coupled with lower world prices for the country’s main exports—or was mostly the result of the Rousseff Administration’s misguided policies has become stale and almost irrelevant. The crucial question is why the government has not so far been able to put in place a reform program that would set the stage for a sustained recovery—particularly since the finance ministry had developed a strategy that was widely praised by academic economists and Brazil’s business community.

The failure has been one of leadership and governance. The country’s economic stumbles and unprecedented corruption scandals have left President Rousseff weakened and vulnerable. Today she lacks the stature and authority, and apparently the political skills as well, to marshal support for tough adjustment measures. 

The massive corruption associated with Lava Jato investigation and several other scandals might have been enough, on their own, to undermine Rousseff’s authority. The many billions of dollars that have been stolen from government agencies, from the people of Brazil, appears astronomical—even from the vantage point of a wealthy country like the United States. And beneficiaries of the corruption were among Brazil’s most powerful public figures and most successful business leaders. So far the evidence pointing to President Rousseff’s involvement is sketchy and uncertain, but her predecessor and mentor Luiz Inacio Lula da Silva, Brazil’s most popular president ever, will likely soon be officially charged. 

But the disastrous role of Brazil’s erratic and fractious legislature, with its 30 plus different political parties, also bears substantial responsibility for the government’s failure to confront effectively its multiple crises—its economic slide, pervasive corruption, and divisive and dysfunctional politics. In the midst of these crises, many members and leaders of congress seem less motivated by any deep concern about Brazil’s future or the nation’s interests than by personal and party ambitions, or by the need to protect themselves against criminal charges.

Now is probably the time for Rousseff to submit her resignation. If not, it is likely she will force the country into a messy and potentially prolonged impeachment battle.

The PSDB (Social Democratic Party), the main opposition party in congress, vehemently supports the impeachment of Rousseff. Although the PSDB and its leader Aecio Neves campaigned for the presidency in 2014 on a platform of far-reaching economic reform, the party has systematically voted against virtually every reform initiative of the government. Its priority has been to bring down Rousseff.

The PT (Workers Party), the party of Rousseff and Lula, has vigorously opposed efforts to oust Rousseff from office (which would cost many PT appointees their jobs in government), but its membership largely opposes the president’s economic program. Most of them reject it on ideological grounds, and regularly seek to dilute any changes that reduce salaries or benefits, whether for ordinary citizens or public officials.

The PMDB (Democratic Movement of Brazil) is the largest party in Congress. It has been allied with the PT since 2003, and indeed, is always aligned with the party that occupies the presidency. This assures it of many senior and junior government posts and generous financial support for the states and municipalities that it dominates electorally. Although the PMDB leader of the House (who has been formally charged with corruption) is steering the effort to impeach Rousseff, the party has been ambivalent about taking that drastic course of action. Within the next several weeks, the party will vote on whether to remain within the PT coalition or join the impeachment process, a decision which is likely to determine Rousseff’s future. In case she is impeached, her vice president, who heads the PMDB, will take over as president. (He too has been associated with corruption and so has the PMDB leader of the Senate, although neither has yet been charged.)

Just in the past few days, the Rousseff presidency was further debilitated by her short-lived effort to bring Lula da Silva into the cabinet—which was correctly seen by most Brazilians and members of the Supreme Court as a political maneuver to protect him from immediate criminal prosecution.

For most Brazilians, Rousseff is no longer a credible chief of state.  Few believe she has the capacity to lead Brazil out of its current morass. Now is probably the time for Rousseff to submit her resignation. If not, it is likely she will force the country into a messy and potentially prolonged impeachment battle. What is most disappointing, however, is that, as the country’s economy and governance continue to worsen, no real leadership alternatives have emerged. Nor has any consensus emerged on a clear-headed program to bolster the moribund economy.

A bitter confrontation over impeachment will continue to command the spotlight, making it all the harder  to address Brazil’s other critical challenges—particularly its seemingly relentless economic and social decline, and its chaotic politics. Aside from the exceptional performance of the judicial authorities in investigating and prosecuting corruption, thereby ending the country’s long history of impunity, there are few bright spots in Brazil today. It should be no surprise that Washington keeps its distance.

This article was originally published in Portuguese in Estadão.