Bailing out the boat with a leaky bucket

Newly re-elected President Dilma Rousseff must really be feeling like she's trying to bail out the boat with a leaky bucket. She won't even be inaugurated for her second term until January and she faces one crisis after another.

As soon as the election results were announced, which by the way was the closest second term margin in this country's history, people began calling for her impeachment. The vote was split almost 50/50 with somewhere in the area of 2 million votes separating the two candidates. It's far from being the "victory" she claims it to be, never has a president had to govern a country that is so divided and so many of its citizens feeling ignored, powerless and voiceless. She really is going to have to start looking at this narrowest of margins as a clear and strong message from the Brazilian people that she is going to have to find a path to reconciliation and real change.

Job creation in this country is at its very lowest since 1999, this alone is a shocking manifestation of what the uncertainty about the political future of this great nation is doing to the economy.

Scandals abound on every side. After a decade of the exercise in futility bringing the corrupt politicians of the "Mensalão" to trial, only one year after their convictions 7 of the worst offenders are not even in prison any longer, they're under house arrest in their posh mansions. Now that's real punishment. The rest of them, with the exception of the politician who was the whistleblower on the whole sordid scheme, are about to be given a form of "day parole". It's truly disgusting.

The top executives of state-owned Petrobras and several extremely large and powerful companies are presently under arrest and being investigated by the Federal Police for a corruption and bribery scheme involving billions of Reais (BRL). Petrobras shares nosedived the day after the election. Minister of Justice José Eduardo Cardozo is putting on a brave face and saying that no effort will be spared to investigate the "individuals" and bring them to justice, but what about the INSTITUTION? Is that going to be untouchable? He also stated that the whole situation is the just the opposition parties trying politicize it and to turn it into a "third round of the election" whatever the Hell that's supposed to mean.

As if all this isn't bad enough, no less than 15 of the Ministers who made up the government's cabinet, have submitted their resignations en masse. We're talking about career politicians here... walking away and washing their hands of this government. Who is going to mind the store in the future, a bunch of rookies who still aren't dry behind the ears in political terms????

Don't get me wrong here, I'm not saying that the opposition candidate for president would be any better. They're all the same, you could elect any of them president in this country and the ship is still sinking; it doesn't matter a damn who's at the helm.

In terms of how all of this is going to affect expats here in Brazil it is really too soon to tell, but clearly we too are going to be in for a very rocky ride for the foreseeable future. With the slump in the economy over the past couple of years I'm sure that foreign investment in Brazil is going to start drying up, especially if the present bureaucracy surrounding investment doesn't change and the already ultra-complex tax laws aren't relaxed a bit. The real estate bubble in this country is about ready to burst, which will also be disastrous. New car sales are falling off and car manufacturers are laying off employees in record numbers. None of this bodes well for the Brazilian economy.

Personally, I don't see too many reasons to be at all optimistic about the future of Brazil over the next 4 years. The only thing that I can hope for is that we're getting so close to the bottom of the well that the only way to go from here will be up.

Cheers,
William James Woodward, Expat-blog Experts Team

Brazilians claim for militar intervention. See gopetition.com/petitions/do-not-recognize-legitimacy-to-brazilian-election.html

Hello villasboas,

I guess you have completely misunderstood the meaning of this posting. Firstly it is not to dispute in any way the legitimacy of the presidential election in this country or the outcome. In fact, it is not to support any political party or candidate at all.

This topic is purely to discuss the overall effect that the current political and economic situation that has resulted from the election will have on expats living in Brazil.

Regarding supporting any of the candidates, in this country what good would that do anyway since they're all as you Brazilians put it "farinha do mesmo saco" (flour from the same sack)? You could put Fernandinho Beira Mar in the presidential palace and the end result would be exactly the same, they're all corrupt, every last one of them.

Nothing is ever going to change in this country until the public and private schools start giving classes from 6 years of age onward, what is a Titulo Eleitoral (voter's registration card), what it is used for and how to use it INTELLIGENTLY; something that Brazilians are not particularly famous for.

Thank you for the replay.

I am sorry if my comment is outside of the aim of this blog. My intention was to show what is going on. Of course, some support to the moviment from outside Brazil would be welcome, but I guess the readers or the blog would be interested in knowing that this is happening and some of the people that is invoved with the protests are also trying to contest the legitimacy of the election and also the reason.

If you think that the comment was unconvenient, please, remove it from the page and forgive me for this.

Not to worry, there have certainly been lots worse made on many of our forums around the world.

We do have to be careful, especially here in Brazil, in order to keep our comments confined to observations that are not biased in any way toward one side or the other.

Comments on how a political situation will affect expats is relevant and acceptable, political statements are not. I would not classify your posting as a political statement.

I think it is admirable to have lifted so many people out of poverty so quickly.
The trouble with welfare budgets is their inelasticity. Indeed they go up faster in economic downturns. The strong growth in the Brazilian economy has evaporated, meaning lower tax revenues. I worry about Brazil's ability to finance itself over the next 4 years.
I guess this is not the best time to move to Brazil.

Kevin, the great problem with these kind of social programs is that they create and perpetuate DEPENDENCE and not independence. Like the old saying goes... give a man a fish and you'll feed him for today; teach him how to fish and you'll feed him for a lifetime.

Actually, the Bolas Família program was not even created by the present government, it was only expanded and re-named. Sadly the Brazilians who rely on it, for the most part aren't sophisticated enough to know that little detail. The program was expanded purely as a vote getter and nothing else. It is also so rife with abuse that it is mind boggling.

This country would do well to invest the same amount of money in education and job creation which would do so much more to lift Brazilians out of poverty, not just in the short-term, but for many years to come.

I agree with you about education. I was able to see close up just how little Brazil invests. I saw secondary school class sizes close on 50. That being said, the university buildings I saw in the North East were no worse than universities I have seen in France: basic, in need of repair, but functional. In France, though, tuition is very good. I don't think it is quite as good in Brazil.

Not sure I agree with the dependency argument. Poor families in Europe (UK/FR) get far more in welfare payments than the Bolsa Familia provides. The benefit to society is often not seen in the first recipients but in their children as "you can't teach an old dog new tricks". It is difficult to educate a hungry child (viz. breakfast clubs springing up in UK schools) Maslow explained this in his famous pyramid of needs.

From a polician's perspective, they want to be voted back in, and handouts buy votes. That is true all over. The 'return on investment' is immediate, it is short cycle and in line with political mandates. Long cycle - an education is a minimum 10 years and often much longer - is good for society but less politically advantageous so the temptation for politicians who don't care about making a difference is to give the handouts and cut corners elsewhere.
To really make a change for the better you have to do both, alleviate poverty and educate the children. Brazil has got it about half right - well perhaps more than half.

To say the PT didn't invent the Bolsa Familia is like saying a car is the same as a horse and cart, just with an engine, and windows...

Still, even if Aecio didn't get elected, it looks like Dilma is implementing his policies for him, which is good. She is an economist and that should mean at least a measure of pragmatism.
But I wouldn't like to be in her shoes right now, given how Brazil erupted over a minor increase in bus fares. The place is a powder keg. And I can't see how she was not involved in this Petrobras affair.

Hard to be optimistic right now, I agree. Corruption, insecurity and education. Crack those and we could be talking about a Brazilian miracle.
I'm not holding my breath.

I followed the election closely and I'm very disappointed by the result. I found the level of personal attacks to be incredible, if not unsurprising. It seems that Dilma was going stoop to any level to get re-elected, the end justifying the means. I'm not saying that Dilma hasn't helped people who need to be helped, but my impression is that she is so single minded that she is jeopardizing the economic well being of the country, which in the long term hurts everyone and hurts the entire country.

For the record, my business in Brazil is related to Petrobras and it's common knowledge what a mess the company is in. I have seen first hand how the broken processes in Petrobras have crippled the company, which has trickled down to the companies that are in business to support Petrobras. One can only hope that if the allegations are true that while Dilma was chairman of petrobras, the company siphoned money away, justice will be served and the individuals who were involved will be punished, including Dilma.

Sometimes it's necessary to sweep out the rubbish. It's a shame Dilma didn't get swept out in this election. The country has gone downhill economically since she was elected. More of the same isn't going to improve the situation, only make it worse.

I agree wholeheartedly, unfortunately the alternative wasn't one bit better either. Aécio Neves is no angel himself and his past record as both Governor of Minas Gerais and Senator was abysmal. Sadly the only real hope for change for the better in this country, Eduardo Campos, was killed in an air crash during the campaign.

Maybe Dilma and Levy is the dream team.

I'm not a fan of Dilma nor am I a fan of Aécio. I think the one thing that will always hang over this election is the tragic death of Eduardo Campos. Marina Silva was a horrible candidate and provided no real alternative to either Dilma or Aécio.

The biggest mistake the opposition to Dilma is making is that they are doing the same thing that the opposition to Chávez and Maduro have made: simply trying to appeal the anti-PTistas. They need to do a better job of appealing to all citizens.

The other point worth making is that these petitions are largely useless. Someone had a similar petition posted to the White House petition page and I can assure nothing will come of it. The last thing the US will do these days is interfere with a democratically elected government in the Americas. Those days are past. So are the days of the military getting involved. If the economy is bad now, it would only get much worse. Anyone who thinks that's an answer to the problems here needs to go to the OAS web page and read the Inter-American Democratic Charter.

Well said Randinho, I agree with you on all counts. The sad part of it all is that we'll never know how things would have turned out had Eduardo Campos not been killed. I almost bet that he would have been elected if not on the first round certainly on the second. I really feel that he'd have been able to "relaunch" Brazil.

Cheers,
James             Expat-blog Experts Team