“More long-term instability: apparently a political crisis is resolved, but the demise of President Dilma is producing a cleavage in society that will endure for many years,” Dirk Kruijt, emeritus professor of Utrecht University in the Netherlands and a prominent expert on Latin America, said in answer to a question about the most evident consequences for the country arising from the impeachment.
The decision to remove Rousseff, who was suspended in May, from office could positively affect stability in the country in the short term as it removes uncertainty about her fate, according to Matthew Taylor, associate professor at the American University School of International Service and adjunct senior fellow for Latin American Studies at the US Council on Foreign Relations.
“But there is a big question mark hanging over the Temer coalition: will it be able to survive the massive corruption investigations that have implicated so many of its members," he asserted.
Hostages to the political system?
Temer, who led the centrist Brazilian Democratic Movement Party (PMDB) for 15 years and was Rousseff’s running mate during her successful presidential campaign in 2010 and again in 2014, was mostly relegated to rallying support in Congress and ensuring his party’s support for Rousseff's agenda in return for control of certain ministries. However, as Rousseff’s popularity plummeted, Temer became her political opponent and led his PMDB party out of the coalition with some Brazilian lawmakers, claiming Rousseff was unable to control the unwieldy coalition she had formed.
Rousseff case has exposed some of the weaknesses in Brazil’s political system, which presents a hybrid between parliamentary and presidential systems, in which the president is elected as in a presidential system, but still largely depends on coalition partners as in a parliamentary system. This system, which obliges the head of state to make deals with numerous political parties, encourages horse-trading and corruption, but, according to experts, is unlikely to be changed under the new president.
"There is little change on the horizon in [the] coalitional presidentialism, and I don’t expect a government led by the PMDB to undertake significant political reforms, since the PMDB is the exemplar of a party that has benefited enormously from the current system," Matthew Taylor suggested.
"The PMDB is part of the problem," Dirk Kruijt agreed.
The Dutch expert also added that only a very mild and accommodating government would be able to start the reform process. "The present President does not seem to be inclined to do so," he assumed.
Economic problems ahead
Last year, Brazil’s GDP, partly hit by China’s slowdown, contracted by 3.8 percent, the biggest dip in 25 years with the International Monetary Fund expecting a similar drop this year. Consumer prices in the country have been steadily increasing by more than 9 percent annually exceeding the central bank's upper limit of 6.5 percent. Declining government revenues and a budget deficit equal to 2.28 percent of GDP have made a major fiscal adjustment necessary.
"It is nearly impossible to reorient Brazil's economy and society along neoliberal lines. The (relatively) small subsidies of Lula [da Silva, Rousseff's predecessor, also from the Workers' Party] and Dilma's government at least could alleviate the most repugnant poverty," Dirk Kruijt said of the 13 years of socialist governance, during which the minimum wage was increased and state help to the most impoverished citizens broadened, most notably with Lula's family grant program, the Bolsa Familia, that helped some 44 million people.
On Thursday, addressing the nation in a televised message, Temer said his priority was to put a cap on government spending through an amended budget, however, it remains to be seen what changes he will make.
"The tight fiscal situation in Brazil will limit the possibilities for deepening anti-poverty programs, but the Temer government will be very cautious about cutting social programs, for fear of the effects of a popular outcry on its already challenged legitimacy," Matthew Taylor claimed.
Last year, a plan to tighten public spending has serious consequences for pro-austerity former Finance Minister Joaquim Levy, who was forced to resign after his attempts to tighten government spending were repeatedly blocked by Workers' Party lawmakers in Congress.
The dismissal of Brazil's president, against which Rouseff on Thursday filed an appeal in the Supreme Court, has spoiled the country's relations with some left-leaning Latin American governments. On Wednesday, Venezuela, Ecuador and Bolivia recalled their ambassadors to protest what Venezuelan President Nicolas Maduro called the "coup d'etat" and "attack against the popular, progressive, leftist movement."
Earlier in August, when leaders from some of Brazil's closest allies — Russia, India, China and South Africa, the so-called BRICS group of emerging economies — were notable absences from the Rio Olympic Games, there was media speculation that the political turbulence in Brazil would lead to the demise of the BRICS format.
"BRICS will survive because the people in the countries see it as providing a multipolar alternative to the current dominance of a unipolar world order where emerging and developing countries are not respected and have no voice," Jaya Josie, head of BRICS Research Center at the South African Human Sciences Research Council, said to allay such fears, adding that while individual leaders and governing parties were important, "there is an historic context that binds the people of the countries together."
This week Temer, who since May has avoided traveling outside the country and has kept a low profile, heads to China for a G20 summit with the aim, as he put it, "to reveal to the world that we have political and legal stability." In China the new Brazilian President will meet all the leaders of the BRICS countries for an informal meeting on the sidelines of the G20 summit as well as Spanish Prime Minister Mariano Rajoy and Italy's Matteo Renzi.