With news last month of Brazil’s decision to impeach and suspend President Dilma Rouseff based on allegations of corruption and wrongdoing, the country teeters on political and economic uncertainty.
According to media reports, Ms. Rouseff’s opponents have accused her of buoying government accounts in 2014, when she was seeking re-election, by borrowing from state banks to cover up a growing deficit. It is not the only scandal that has beset Brazil in recent years, though.
Ms. Rouseff also has been linked to the Petrobras scandal, known as Operation Car Wash, in which Brazil’s largest construction firms overcharged the state-run oil company and then split the excess charges among Petrobras executives and well-connected politicians, many of whom were affiliated with Rouseff’s Workers’ Party. The party, then, allegedly used the funds to finance political campaigns and expenses.
This scandal has engulfed a significant proportion of Brazil’s political class and Petrobras. It can be blamed on a number of factors, but the two most likely causes are the fact that Brazil is a natural- resource-rich country with a significant state-owned operator and that the dominant political force, the Workers’ Party, has been in power since 2003. These factors – a valuable resource generating significant sums, control thereof and motive – make fertile ground for corrupt activity among the unscrupulous.
Additionally, there are long-standing political divisions, which have heightened tensions between the opposition parties and the Workers’ Party, with the former seeking to gain political advantage at every turn. However, given the populist policies pursued by the Workers’ Party that lifted millions out of poverty and reduced inequality, the incumbents have support they are keen to maintain, even in the face of dramatically declining economic performance.
Yet, as the poor performance of the Brazilian economy continues to make headlines in country and around the world, many are left to wonder if her previous show of strength and solidarity will wane. Indeed, it’s likely that the corruption scandal and the failing economy strengthened the decision to impeach her. Previous administrations have not been punished for similar actions. It is therefore as much politically, as legally, motivated.