Brazil’s perpetual crisis

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Brazil’s perpetual crisis

Brazil is in the midst of a deep political crisis again. Less than a year after impeaching its former president, the country faces yet another crisis under a sprawling corruption investigation that once more reaches all the way up to the Brazilian presidency.

President Michael Temer, a conservative politician who took office as the successor of the impeached former leftist president Dilma Rousseff in May 2016, is under mounting pressure to resign after new accusations against him made headlines. He is facing serious allegations of attempting to obstruct the biggest corruption probe in Brazil’s history, the “Car Wash” investigation that has been underway since 2014. Temer was secretly taped endorsing hush-money payments to allegedly buy the silence of the former president of the Lower House, who has been under arrest for the past eight months as part of the Car Wash probe.

The scandal emerged last week with the presentation of evidence regarding the plea-bargain agreement between Brazilian public prosecutors and the investigated CEO of the world’s biggest meat producer, Brazilian multinational company JBS. In addition to the allegations of Temer’s involvement in a possible obstruction of justice, the CEO made shocking revelations that JBS bribed approximately 1,829 politicians from 28 different political parties over the past thirteen years.

These revelations confirm the suspicions that corrupt networks in Brazil are much larger and deeper than so far disclosed under the Car Wash probe. The new revelations suggest that former presidents Luis Ignacio Lula da Silva and Dilma Rousseff, both from the Workers Party (PT) that governed Brazil from 2001 until the impeachment of Rousseff in 2016, received kick-backs from the JBS totaling USD $150 million in recent years. The CEO of the JBS also secretly recorded Senator Aecio Neves, a losing candidate in Brazil’s 2014 presidential elections who was the former president of the Brazilian Social Democratic Party (PSDB), asking him for approximately USD $600,000.

These alarming facts are coming out only a few weeks after the former CEO of another Brazilian multinational, construction giant Odebrecht, revealed it paid out approximately USD $3.4 billion in kick-backs over the past ten years to guarantee that 29 senators and 39 deputies produced legislation that favored the company’s interests. This control of the Brazilian state by large private companies has been highly beneficial to them. In just nine years Odebrecht has grown 520 percent. JBS, once a small company, benefited from USD $2.6 billion in loans from the Brazilian National Development Bank (BNDES) that were essential for the expansion of the company abroad.

As the obscure deals of corrupt public-private partnerships in Brazil become public, Brazilian institutions are once again being tested. Unseating Temer less than a year after the long and divisive impeachment process of Rousseff would have long-term consequences for the stability of Brazil. Unpredictability is even higher this time because if Temer is unseated, there is no clarity on how his successor would be chosen. Based on the constitution, the Lower House would have to choose a president if needed before the next presidential election scheduled for 2018. This indirect election would surely deprive the chosen president of legitimacy, adding further uncertainty to an already unstable political context.

Brazil is showing symptoms of a prolonged systemic crisis. It is clear that the paralyzing corruption has deep roots throughout the country in spite of anti-corruption actions taken by the judiciary. The source of corruption is often traced to ineffective public institutions coupled with low costs of engaging in shady practices. Political upheaval is only one consequence of endemic corruption. Corruption has important side effects on the Brazilian economy, which so far has been unable to recover from country’s deepest economic recession in history. Negative economic growth and political paralysis are likely to push a large portion of the population into socio-economic exclusion. Under exclusion, the public leaves politicians unchecked, thereby increasing the likelihood of state institutions being further enslaved to powerful economic elites.

This pernicious cycle of bad governance in Brazil leads to growing public dissatisfaction, which is a fertile ground for political demagoguery. It should come as no surprise that former president Lula, who according to the testimony of the main corruptors was the primary orchestrator of the extended corruption network as well as the major beneficiary of the kick-backs, is leading the polls for the next presidential election by 31 percent.

Brazil’s situation falls within a wider context of crisis in representative democracies across the world. However, unlike other democracies such as the case of South Korea, Brazil seems unable to create viable solutions to overcome its problems. The ambition of Brazilians to become an effective democracy is in conflict with the existence of parasitic political and economic elites whose main objective is self-aggrandizement.

*The author is a professor at Hankuk University’s Graduate School of International and Area Studies.

Helder Ferreira do Vale
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