Brazil has not solved anything by seeking to impeach president Dilma Rousseff for corruption. She faces a trial by a senate in which a large number of the senators face worse charges than her own, and it is thoroughly disturbing that acting President Michel Temer has managed to find a vice-president in Congressman Andre Moura, who has been accused of murder and of being involved in the Petrobras corruption scandal.
The rampant acquiescence in gross abuse and corruption across the board means that Temer’s would-be government will face a barrage of criticism from Rousseff’s Workers’ Party and the wide variety of social movements that have been supportive of her. It is highly likely that they will take to the streets in an organised campaign of opposition to a government that they consider illegitimate because it took power through what they call a “coup”.
Another group called the Landless Workers Movement has proposed a general strike and former president Luiz Inacio Lula da Silva has said that Brazil will go through moments of “democratic struggle”.
This means that Temer’s business-friendly administration will face serious problems if it ever gets round to trying to reform the economy. Many of its members will spend half their time in court, seeking to defend themselves against the public prosecutors, while others will be trying to defend the government against the popular outcry over its perceived lack of legitimacy.
What Temer should be focusing on is how to stop rising inflation, slowing growth, a weakening currency and surging public debt. Inflation is running at 7.5 per cent, which may be nowhere near the 2,000-3,000 per cent of the early 1990s, but is far higher than the central bank’s target of 4.5 per cent, and the decision to raise interest rates to 12.75 per cent to curb inflation looks certain to deepen the problems in an economy that is on the brink of recession.
Consumer confidence is at its lowest since 2005 and the economy has shrunk for 15 consecutive months. Public debt is thought to be close to 65 per cent of gross domestic product, but when all the public companies are added in, it gets closer to 100 per cent.
Even though Brazil has large dollar reserves (around $360 billion or Dh1.32 trillion), the conundrum on which Temer’s government needs to focus on is how to reshape both monetary and fiscal policies so that the country can start moving forward again. Otherwise, it will continue to sink as Temer and his cronies grapple with their legal problems.
