Not a Game: Brazil in Crisis on the Eve of the Olympics
As 70,000 supporters cheered outside Planalto Palace, Dilma Rousseff took the presidential sash from outgoing Brazilian president Luiz Inácio Lula da Silva, becoming Brazil’s first female president. The year was 2011 and the economy was booming. The last year had seen a GDP growth of 7.5 percent, rivaling India and China. The unemployment rate was 6 percent and dropping.
Two months later, in a visit to Brazil, President Obama said: “Brazil is on the rise. And the United States is excited and fully supportive of Brazil’s rapid expansion, its extraordinary talent, its resources, its enormous potential that’s now being realized in part because of the outstanding leadership of President Rousseff.” At the end of her first year in office, Rousseff still enjoyed an approval rating of over seventy percent.
Five years later, Brazil has taken a 180-degree turn. The nation’s GDP shrunk by over five percent this year, with inflation at nine percent and unemployment at eleven percent. The economy is expected to continue to shrink, and poverty, which famously dropped during the Lula administration, has begun to rise again. To make matters worse, last week, the Brazilian telecommunications company Oi SA just filed for the largest bankruptcy in Brazilian history.
Embroiled in one of the worst economic recessions in the nation’s history, the Brazilian Senate voted on May twelfth to hold an impeachment trial against Rousseff, suspending her of her presidential powers and leaving her Vice President, Michel Temer, as Acting President. Rousseff left office with an approval rating in the single digits, and Brazilians are equally pessimistic about the new administration. Under any circumstances, the economic and political crisis in Brazil would be a calamity. But, all of these impediments to “Ordem e Progresso” are exacerbated by one event: the 2016 Summer Olympics, which will be held in Rio beginning at the end of July. To say that Rio is struggling to prepare for the 500,000 spectators expected to attend the Olympics is an understatement. With the nation on the brink of social collapse, facing ongoing protests, extreme pollution, and the raging Zika virus, the city can expect the preparation for the games to be a PR disaster and to lose over $15 billion dollars once all is said and done.
The quagmire Brazil finds itself in stems not from the failure of any particular ideology but from political hypocrisy and a betrayal of trust. Before the current malaise, Brazil was taking unprecedented strides to improve economic and racial inequality. During the Lula presidency (2003-2011) and Rousseff’s first term, millions were lifted out of poverty. This success was largely credited to the platform of the Worker’s Party (PT), of which both presidents are leaders. But the remarkable economic growth depended on high commodity prices. Once those prices began to fall in 2012, Brazil’s economy took a major hit. Social spending, meanwhile, continued to increase, creating the current state of mega-stagflation. Brazilians now have less money than before, even as it declines in value.
With Brazilians feeling the pinch of recession, many Brazilian politicians saw an opening to remove Rousseff. Their opportunity came in the form of the Petrobras scandal (which poses a major threat to many PT politicians including Lula, but has never personally implicated Rousseff). On April 17, the Brazilian Chamber of Deputies voted to open the impeachment process against Rousseff, led by Eduardo Cunha of the Brazilian Democratic Movement Party (PMDB). Cunha, the now-suspended President of the Chamber of Deputies, is an ironic choice to lead the impeachment, since he is himself implicated in the Petrobras scandal and even more unpopular than Rousseff among Brazilians. When the Senate voted to hold the impeachment trial, Rousseff referred to her removal as a “coup.” The legal grounds to move forward with impeachment have, technically, nothing to do with the Petrobras scandal, the economy, or the ensuing protests that target the two problems. Instead, the impeachment currently underway is due to accusations that Rousseff misrepresented Brazil’s debt leading up to the 2014 elections. While these charges are technically true, they are not the cause of the widespread anger at Rousseff, and leaders of the impeachment trial such as Cunha face much more serious legal repercussions, such as life in prison.
Once Rousseff was removed from power for the duration of the impeachment trial, Brazil’s Vice President Michel Temer assumed her duties. The first thing he did was announce a new cabinet, immediately sparking controversy as it was composed of entirely white men. His plans to loosen government control over petroleum and reduce public spending have been met with resistance from Brazil’s divided Congress. In addition, he faces his own serious accusations of taking bribes from Petrobras. Should Turner be indicted, his administration would likely be rendered incapable of instituting the planned spending cuts and deregulation.
In the midst of all this political and economic instability, it is becoming increasingly difficult for the city of Rio de Janeiro to prepare for the 2016 Summer Olympics, which is planned to commence at the end of July. When Rio was chosen to be the host city in 2009, Brazil was at the top of its game. With a booming economy and millions of Brazilians feeling empowered, the city seemed like the obvious choice. Seven years later, the tables have turned completely. The government has struggled to fulfill the construction and environmental projects necessary for the games, which include building adequate transportation and cleaning up the city’s extremely-polluted bays and rivers. The crisis has gotten so bad that on June 17, the governor of the state of Rio de Janeiro declared a “public calamity,” and asked for federal assistance to allow the state to fulfill its obligations for the games. Rio de Janeiro received an $850 million loan to help cover public expenses, but the state still faces a budget deficit of $5.5 billion.
On top of economic woes, Zika virus currently poses a major public health threat for Rio. Many athletes, who fear for the health of their families in light of the severe birth defects caused by Zika, are not planning to come to Rio. While cases of Zika have been diagnosed across the entire country, Rio has been hit particularly hard. Of the 90,000 suspected cases of Zika virus in Brazil, over one in four have been found in Rio de Janeiro.
No one knows exactly what is next for Brazil, but constitutional procedure gives us a general framework for what to expect. Rousseff’s ongoing impeachment trial must reach a conclusion before November. The trial, which is held in the Senate and overseen by the Supreme Court President, requires a two-thirds vote to convict Rousseff. If she is convicted, Temer will serve out the remainder of her term, which ends on December 31, 2018. Unless, of course, Temer is convicted himself, since impeachment proceedings have already been proposed against him in Chamber of Deputies, and 58% of Brazilians support his removal. Should Temer be removed before he can serve out the rest of term, Cunha would theoretically become the Acting President, but he has already been suspended of his duties over his own involvement in the Petrobras scandal and his attempts to intimidate members of Congress. Renan Calheiros, the President of the Senate and next in line after the President of the Chamber of Deputies, doesn’t look any better, with over one million Brazilians already demanding his impeachment over corruption charges.
The ensuing conflict is far from over, and will likely force a weakened Brazil to limp through the Olympics. At a time when Brazil is supposed to exemplify its strength to world (á la Beijing 2008), its instability and chaos are being broadcast on an international stage. The high levels of contraction in the economy likely means that the waters will take a long time to settle, since economic discomfort is the main engine of the nation’s political instability. Nevertheless, once the economy beings to make the rich richer and bring people out of poverty again, it is likely that other areas will cool down as well. One thing, however, is certain: troubling times lie ahead for Brazil, even after the Olympic torch burns out.