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Doubling Down on Disaster: the Degradation of Brazil

When Brazilian President Dilma Rousseff was impeached in May and removed from office in August, many called it a coup.

The president was not charged with anything that could legitimately be called a crime, and the leaders of the impeachment appeared, in taped conversations, to be getting rid of her in order to cut off a corruption investigation in which they and their political allies were implicated.

Others warned that once starting down this road, further degradation of state institutions and the rule of law would follow. And that’s just what has happened, along with some of the political repression that generally accompanies this type of regime change.

On Nov. 4, police raided a school run by the Movimento dos Trabalhadores Rurais Sem Terra (MST), in Guararema, São Paulo. They fired live (not rubber bullet) ammunition and made a number of arrests, bringing international condemnation. There had previously been eight arrests of MST organizers in the state of Paraná. The MST is a powerful social movement that has won land rights for hundreds of thousands of rural Brazilians over the past three decades, and has also been a prominent opponent of the August coup.

The politicization of the judiciary was already a major problem in the run-up to Rousseff’s removal. Now we have seen further corrosion of institutions when a justice of the Supreme Court issued an injunction removing Senate President Renan Calheiros because he had been indicted for embezzlement.

Calheiros defied the order, whereupon the sitting president of the republic, Michel Temer, negotiated with the rest of the Supreme Court to keep Calheiros in place. The great fear of Temer and his allies was that Calheiros’s removal could have derailed an outrageous constitutional amendment that would freeze real (inflation-adjusted) government spending for the next 20 years, which has now been passed by the Congress.

Given that Brazil’s population is projected to grow by about 12 percent over the next 20 years, and the population will also be aging, the amendment is an unprecedented long-term commitment to worsening poverty. It will “place Brazil in a socially retrogressive category all of its own,” noted Philip Alston, the UN special rapporteur on extreme poverty and human rights, describing the measure as an attack on the poor.

The government’s proposed public pension cuts would hit working and poor people the hardest.

The deterioration of democracy, the rule of law and civil rights is what happens when a corrupt elite uses illegitimate regime change to ram through big, regressive, structural changes for which it could never win support at the ballot box.

The international media tells us that budget tightening is necessary and will actually help pull Brazil out of its depression. But this goes against basic economic and accounting logic, as well as empirical evidence, including Brazil’s own disastrous experience since the beginning of 2014.

Brazil’s exorbitantly high interest rates, with the current Selic (policy) rate at 13.75 percent, are another failed macroeconomic policy that is blocking the country’s economic recovery. These are set by the Central Bank, and have been among the highest in the world, in real terms, for decades.

The current government has nothing to offer but a repeat of the long-term economic failure of 1980–2003 — during which time there was about 0.2 percent per capita gross domestic product annual growth — which the population will not accept.

Hence its degradation of the country’s most important political institutions.

This article originally appeared in The Hill.

More articles by:

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of  Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

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