BRAZIL: A State of Economic and Political Paralysis

Under President Michel Temer, Brazil’s economic and political paralysis has deepened. With the Dilma Rousseff impeachment vote at the Senate planned for after the 2016 Olympics, the situation is rife with alarming possibilities as the corporate media and financial elite attempt to regain an iron grip on policy to reverse the imprint of the Workers Party.

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Rough Transcript

Prabir Purkayastha (Prabir): Hello and welcome to Newsclick, this program with Real News. Today we have with us Adhemar Mineiro, who is a Brazilian economist, to discuss the political crisis in Brazil, the impeachment of Dilma Rousseff, as well as the economic situation in Brazil. Adhemar good to have with us.

Adhemar: Thank you.

Prabir: The situation in Brazil seems to be getting rather complex. We have now the impeachment – which is going to come up I think in the last week of August – of Dilma Rousseff which will be voted in the senate. So what is the vote likely to be? Do you think that impeachment is going to go through or do you think that the kind of protests that is taking place and the events that has taken place – the various ministers, the current acting President Temer himself being also found to be guilty of corrupt practices, then we had De Cunha who also been banned from various things and has also come under corruption charges – do you think there is any chance of a change in the impeachment voting that could take place?

Adhemar: Yeah, we are in a very confusing situation at this point. On one hand you have this political process going on. The commission and the senate discussing and probably there would be a vote in the final week of August on that. But on the other hand, all the main decisions are paralyzed since the beginning of the year, and you have a very huge economic crisis going on with the unemployment going up very quickly. Violence in the cities is growing, crime is becoming again a major problem. So this is part of – or the as the consequence of the economic crisis. Last week, even some important sections controlled by transnationals in Brazil, like the automobile sector ,are demanding from the government some support to stay operating in the country. And some managers of these companies are going together with the unions to ask the government to take some measures. But in fact, measures won't be taken, because all the political process is waiting for the solution and you have also to go through two different political steps at this moment. One is the vote at the end of August which can be influenced by the crisis, because as it will be at the senate, you have a very powerful influence from the governors of the states, and so as the crisis in the states is going on, these can somehow influence (the vote in the Senate). The other element is that in October, you have local elections in Brazil, all over the country but local. But this is also influencing the Congress, because some of the members of the parliament are candidates at the local level disputing for major posts. But also the members of the parliament – for the lower chamber, and the Senate, they are very concerned about local elections because it can influence the national elections we have in two years. So all the decision process – political decision process -- is waiting for that. It is waiting for the (impeachment) vote at the end of the August but also waiting for the popular voting in October in the local elections and this is paralyzing the country, and effecting the economy. The situation of economy is already too bad but it is becoming worse and worse because of this paralyzing situation.

Prabir: When you say it is going to influence the senate impeachment, influence it in favour of Dilma Rousseff or against her? Or is that an open question?

Adhemar: At this point, the match is tight. If nothing changes, this represent a win to the interim government of Temor. So if anything changes, will be changing in favour of Dilma, so I think these two processes can influence the senate. It's not most the probably situation. The most probable situation is just confirm the impeachment. But there is some doubt on that because of those two processes. On the one hand you have the economic crisis, on the other hand you have this political process and these can effect. And it's a question of changing the votes, not even changing the vote, but may be just convincing some senators not to go vote. Because to go for impeachment, you need fifty four votes: so they have to get those fifty four votes. If there is no fifty four votes, the impeachment is not confirmed.

Prabir: The original vote (in favour of impeachment) was fifty five, it is only a shift of two senators essentially...

Adhemar: If they don't want to shift, they can just stay home or stay in their original states and not participate in the process and then there will be a problem to get their fifty four votes. So it's a very tight situation, but yeah, anything can happen. Even, if the senate votes and this political block gets fifty four votes, if the process is not fair the possibility that Dilma appeals to the supreme court questioning the decision of the senate, saying, it was not fair. So this state (of crisis) can persist for some long period.

Prabir: Would you agree what lot of people have said that this is really a coup by the forces that did not want Dilma to win the earlier election. And having lost four successive elections, essentially, the right decided that they will never be able to win in the short term an election in Brazil and therefore, took recourse to what can be called a constitutional coup. Would you agree that this is what has really happened?

Adhemar: It's a kind of a parliamentary coup -- well operated by the members of parliament. But in fact, there is a very huge coalition of economic interests by business sectors, mainly the financial sectors and the major media. Those that are controlling Brazil are ten or twelve families, may be less than...

Prabir: Brazilian media is supposed to be one of the most tightly controlled – by very few families – as well as the big businesses in Brazil.

Adhemar: And they are also in a very complicated situation financially, so they are in debt and they want help from the state to stay alive at this moment. So their interests are very attached to their processes also.

Prabir: The economic status of the Brazilian state have been weakened because of the loss of the primary commodity prices -- effectively, oil and minerals and so on.

Adhemar: Yeah, it's real but I think Brazil was less influenced than other countries specially other countries in the region – like you see, countries politically very different – like Venezuela and Chile. They are most dependent on just one product like oil in the case of Venezuela and copper in the case of Chile. All these countries remain dependent on two or three products, like Argentina. Brazil has a very diversified agenda of exports on the product side, but also in having partners. Brazil is a major exporter to Asia, to the US, to Latin America, to Africa, to Europe. So it is very diversified in this area. I think, in the case of Brazil, the lack of investments is the main problem. If you see the figures since the 2013, investments are going down and down. You had some investments, but mainly from the construction sector and this is driven by some products of the government; like the problem to accelerate growth on the one hand, on the other investments are through Petrobras oil industry. Then on the Petrobras oil industry (front) as the prices went down, they just stopped the investments. But on the other hand, related to the construction sector, they are also affected by the political process and the accusations of bribery and corruption and all that. The construction sector gave money to elected members of parliament to influence some governmental decisions so you have all these situations that also paralyzed the investment in the construction sector in Brazil. Except for the ones related to the Olympic games, but this is finishing now. So investment in these area will also be paralyzed and these are important sectors inside the country. So this is effecting badly the economy.

All the other sectors, private sector, they are just waiting. Since 2013, there is no new investment, nor in the transnational area, or in the so called national private sector. Everyone is waiting and so when the investments went down, I think this is more important than the fall of commodity prices in the case of Brazil.

Prabir: This is all we have in this segment. Please come back to Newsclick for the next segment with Adhemar.