Brazil’s real House of Cards continues

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

Since Dilma Rousseff’s impeachment confirmation by the Brazilian Senate on August 31st, the propagated stability is still just a distant concept on the Brazilian political scenario. President Michel Temer has numerous challenges ahead, while both the public opinion and his support base is starting to challenge his capability of handling the task.

The left-wing parties that left the Government are creating a narrative to oust the new president, calling for new direct elections for president, meanwhile Temer’s own parliamentary base is pressing him to carry on with the necessary reforms on Brazil’s economy and political system.

During Rousseff’s trial, some of the recordings made by the Brazilian Justice Department have been leaked to the mainstream press. In one of those recordings, political figures were commenting about the need of “containing the bleed” of the corruption investigations, and among them was one of the most high profile Ministers of Temer’s Government, Romero Jucá, that had to resign his position.

From the initial investigations that targeted corruption in Petrobras, several parallel investigations have been launched, including a large-scale operation that is investigating similar corruption schemes on the largest state-run pension funds.

There is a notion among the Brazilian public that most of the parties involved in federal government over the last years have been beneficiaries of some sort of corruption schemes. In a kind of “allotment”, each party has received a different state-run company in order to receive advantages and bribes, all being centrally orchestrated by the parties in power.

Some of the testimonies of the construction companies implicated in the Petrobras scandal provided additional insights that this “practice” dated back to the Military Governments in the 70’s but gained an exponential scale during the Democratic governments since José Sarney’s Presidency in 1985.

Since then, the major actor on the Brazilian political stage is Michel Temer’s “Brazilian Democratic Movement Party”. It is  the largest Brazilian party both in the number of affiliates and parliamentary seats.

The gigantic size of the party is its main advantage and risk at the same time. With several different leadership groups and interests, it is extremely difficult to draw any kind of consensus among the party itself in order to provide the necessary “security network” that Temer will require to keep carrying on with the promised reforms.

Without these reforms moving at the necessary pace, and with the casting shadow of the corruption schemes being investigated by the Brazilian Federal Police and Justice, very turbulent times lie ahead of the new president.

These large stability issues directly impact the Russian and Chinese interest in the region. China is currently the largest commercial partner for Brazil, having billions of dollars invested in infrastructure and industries in the country. Russia also became a relevant commercial and strategic partner for Brazil carrying out several treaties and agreements in the last years as well as the BRICS forums.

Brazil’s new foreign minister, José Serra, declared that Brazil will seek for a new approach at its international relations, and is already reconnecting ties with Washington in a similar fashion that Mauricio Macri’s Argentinian President did after assuming office.

During the Lula’s and Rousseff’s Governments, the relationship with the USA has been kept in good terms, but slowly lost its importance with the Brazilian diplomacy seeking to open new ties with African and Eurasian countries. Brazilian Social Development Bank for instance, loaned large sums of money in infrastructure projects in Angola, Mozambique, Cuba and Venezuela.

The waves of instability reached new levels this week with a bizarre event concerning the currently investigated Brazilian Senate President, Renan Calheiros. One Minister of the Brazilian Supreme Court tried to rule him out from the Senate presidency but Calheiros was “not found” to have received the notification, giving him time to contest the decision in the very same Supreme Court that in a session with all Ministers decided to keep his Presidency position.

Calheiros is known to hold “reports” about almost everyone involved with the politics in Brasilia. There are allegations that Calheiros used the Senate police to covertly investigate and even bug some of his opponents in order to produce these reports. This can make him the man that can destroy the entire Republic if he releases such reports to the public view.

With the several actors involved in the entire crisis, what is clear is that the institutional instability in Brazil seems to be far away from a happy ending.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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