Foreign Policy Blogs

Will Dilma Face Impeachment?

Demonstrators hold a Brazilian flag during a march in Sao Paulo on Sunday demanding the impeachment of President Dilma Rousseff.

Demonstrators hold a Brazilian flag during a march in Sao Paulo on Sunday demanding the impeachment of President Dilma Rousseff. Demonstrators hold a Brazilian flag during a march in Sao Paulo demanding the impeachment of President Dilma Rousseff. ( Andre Penner/Associated Press)

Will Brazilian President Dilma Rousseff face impeachment and be forced to step down?  According to recent polls, if a majority of Brazilians have their way she could be forced from office.  In a poll taken by MDA from March 16-19, commissioned by the national transport lobby group CNT, 60 percent of the 2000 respondents favor impeaching the president.  The call for impeachment are largely due to the massive corruption scandal uncovered at state-run oil company Petrobras, where allegations of political kickbacks are being investigated.  Close to 70 percent hold Rousseff responsible for the corruption.  The poll also showed waning enthusiasm for Rousseff’s running of the government, with 65 percent rating her government’s performance negatively and 11 percent positively.

Last Wednesday, as the Petrobras scandal threatened to escalate and calls were heard among the 2.2 million protesters on the streets throughout Brazil for impeachment, Rousseff issued a series of anti-corruption measures.  The measures include forbidding hidden campaign contributions, allowing for the seizure of property from government officials who cannot prove the source of their property, and forbidding those with criminal records from running for public office.  Given the Brazilian knack for getting around cumbersome rules and regulations, most Brazilians will have little faith in the successful implementation of the proposed legislation.

Nor will the association of President Rousseff with the corruption at Petrobras go away.  Most Brazilians believe Rousseff, who served as chairwoman of the national oil company during the ten-year period being investigated, must have been aware of the massive $3.8 billion kickbacks to politicians, created by inflating contracts with construction companies.

The arrest of nearly 50 politicians, mainly leaders of her Workers’ Party and her allies in Congress, is also unlikely to quell calls for her impeachment by the populace, frustrated by economic decline.  The MDA poll revealed two-thirds of those polled believe those responsible at Petrobras for corruption will not be punished.

Last week, an opposition party put forward a petition to investigate President Rousseff only to see it overturned by the Supreme Court on Wednesday due to “technical errors.” Yet the action shows that in contrast to many nations, Brazil has a formal mechanism (and recent history) in dealing with impeachment — former President Fernando Collor de Mello was impeached in September 1992, after being accused by his brother, Pedro, of permitting an influence peddling scheme run by his Collor’s treasurer, Paulo Cesar Farias. (Collor is now serving as a senator and is also be investigated.) And In Brazil, the formal petition asking for the impeachment of the President is submitted by citizens and not by public institutions.

The economic situation in Brazil now may not be as bad as it was under Collor’s presidency, when hyperinflation reached 84 percent in the month he took office and all accounts over $1,300 were frozen for 18 months, but the situation could get worse. The budget cuts proposed by the new finance minister, Joaquim Levy, are reminiscent of the major cuts in government spending undertaken by Collor, which proved widely unpopular among the people.  And perception of declining economic status, contrasted with fairly recent optimism, means it is difficult to compare the two periods using pure economic data.  A recent Datafolho poll revealed the outlook for the economy is the worst in its 18-year polling history, and dissatisfaction with Rousseff’s performance in office the highest since the days leading up to Collor’s impeachment.  Close to sixty percent of those polled believe the country’s economic situation is worsening, with a mere 15 percent expecting improvement.  The turnaround in citizen expectations has been swift – just last September, in the month before her re-election, 41 percent of those polled by MDA rated her government as “great” or “good,” with only 24 percent as “bad” or “terrible.”

Should the new finance minister not be able to turn the economy around, Brazilians may grow increasingly frustrated with their lot, and turn again to the streets, with more calls for the impeachment of Rousseff.  Indeed, Eurasia Group believes a prolonged decline in approval is one of the conditions for impeachment to take place, though they currently rate the chances of impeachment taking place at only 20 percent.  However, the call for impeachment could grow louder should their other conditions be met: 1.) a direct link between Rousseff and the corruption; 2.) former President Lula failing to support the current administration; and 3.) the opposition gathering behind the call for impeachment.

Yet these conditions may change rapidly should Brazilians continue to suffer. March 15 saw the largest demonstrations since the movement that helped topple the military dictatorship in 1985. Opposition leaders now supporting Rousseff, such as former President Fernando Henrique Cardoso of the PSDB, may have to change their tune should deteriorating economic conditions bring more and more Brazilians out in protest in the coming months.



Gary Sands

Gary Sands is a Senior Analyst at Wikistrat, a crowdsourced consultancy, and a Director at Highway West Capital Advisors, a venture capital, project finance and political risk advisory. He has contributed a number of op-eds for Forbes, U.S. News and World Report, Newsweek, Washington Times, The Diplomat, The National Interest, International Policy Digest, Asia Times, EurasiaNet, Eurasia Review, Indo-Pacific Review, the South China Morning Post, and the Global Times. He was previously employed in lending and advisory roles at Shell Capital, ABB Structured Finance, and the U.S. Overseas Private Investment Corporation. He earned his Masters of Business Administration in International Business from the George Washington University in Washington, D.C. and a Bachelor of Science in Finance at the University of Connecticut in Storrs, Connecticut. He spent six years in Shanghai from 2006-2012, four years in Rio de Janeiro, and is currently based in Ho Chi Minh City, Vietnam. Twitter@ForeignDevil666