Professor Anthony Pereira, Director of the Brazil Institute at King’s College London explains some important background information about the present situation. Here are a few of the questions and abbreviated answers.
— What is happening with the economy?
… When President Lula left office in 2011, the economy was at a peak, and actually grew 7.5% in 2010, and averaged 3-4% growth during Lula’s 8 years in power. Dilma Rousseff had the bad luck to take over at a time when the commodities boom was ending. Growth slowed in her first term, and the country entered recession in her second term. The economy shrank last year by almost 4% and is projected to shrink by the same in 2016… also there is budget deficit that has been aggravated by spending increases which haven’t been controlled, including tax breaks and subsidies to industry. Every Brazilian government spends more than its predecessor, and that is partly because there are a lot of mandatory expenditures that the government has to spend on.
— Are Brazil’s problems structural?
…The Brazilian parliamentary system is hybrid and quite difficult to manage, the party of the president has never held more than 20% of the seats, in either the lower or upper house. Governments have to stitch together very unwielding coalitions. Rousseff had 10 parties in her coalition, and then had to appease each group… the new government is a reaction to what happened to Rousseff and is the most congress-based party we have seen in Brazil for a while… now we have a sitting president and an active president at the same time… essentially we have two presidents, and this won't be resolved until after the Olympics.
— How right wing is Michel Temer’s new government?
Many of the appointments are disappointing, not just because many of the new ministers are being investigated for corruption, as is Temer himself, but because there are no women, all are white, some don’t have qualifications. He took away ministerial status from some important ministries including human rights, racial equality for women, this has certainly raised some eyebrows…
— Will Temer have to stop free elections to stay in power?
This would be surprising to most of us who have studied Brazil since the 1980s when it returned to democracy from dictatorship. The institutions are robust enough, we shall see in October in the municipal elections. Even the Workers Party which is saying a coup has taken place is planning to run in the municipal elections. They hope to survive as a party and do reasonably well… I would say the risk with the Temer government is not what will happen in the next elections but that Temer will enforce a lot of economic reforms in a very short time that Rousseff could not, such as privatisation, liberalisation of offshore oil regulations, ending linking pensions to the minimum wage, raising the retirement age for pensions, reducing mandatory expenditure on health and education, these are all things that Brazilians would not have voted for.
— Has the Brazilian Press been instrumental bringing about the change over in administrations?
The Brazilian press is biased, a lot of the anti-corruption coverage has been selectively leaked so we don’t know who is being protected, so we can’t over generalise. The TV news is less biased than the press, and the TV news is far more influential than the newspapers in Brazil. The bias is not the same across the whole spectrum of the media in Brazil.
— What about the international press?
Parts of the press in the US and the UK are favourable towards the recent change. Multinational Oil companies that are interested in investing in offshore oil reserves companies for example don’t like the 30% monopoly that Petrobras enjoys. They would like to see a lessening of the national content laws that are in place… this is aside from the question of legitimacy of the current government, and people are quite right to raise questions about it.
So the markets seem to be happy but there are big questions left unanswered in terms of political ethics right across the board.
