Foreign Policy Blogs

Brazil’s March Madness Raises Longer Term Questions

Brasília_protest_-_Brazil_15_March_2015

Photo Credit: José Cruz/Agência Brasil

The March anti-corruption protests in Brazil — which focused on a scheme of bid rigging and bribery around Petrobras, the national oil company — occur against a wider backdrop of corruption in Brazilian politics.

From one perspective, the protests raise a question, whether Brazil is ready to take an evolutionary step in its political culture. Lasting improvement may be possible if it builds on some quiet but long-term developments.

Corrupt party machines are an ancient norm in Brazil. In towns in the Amazon region, campaign t-shirts are used for daily wear years after the election for which they were distributed. A major party, known for some years as the Liberal Front Party (PFL) was popularly dubbed the “Partido de Fisiologismo Liberado,” or the “Party of Unrestricted Machine Politics.” The first president after military rule, Jose Sarney, was generally regarded as representing a machine – his daughter’s presidential ambitions were derailed when large stashes of cash turned up in a campaign office in 2002. The second president after military rule, Fernando Collor de Mello, was impeached for taking large bribes. His childhood friend, Luis Estevao de Oliveira, was deposed from the Senate for prior participation in a bid-rigging scheme.

The country features many political parties, but not many focus on issues and platforms. Parties allied at the national level are often opponents at the state level, and yet again allied at the local level. Only a few parties have histories of presenting coherent nationwide agendas. The largest of these are the ruling Workers Party (PT) and the previous presidential party, the Brazilian Social Democratic Party (PSDB). Not coincidentally, the candidates from those parties have finished first and second in all presidential first round elections since 1994, and are then perennial opponents in run-off polls. They are the two most modern, issue-driven, parties; both have large constituencies in the state of Sao Paulo. They are actually more akin to each other than to most other parties, but, nonetheless, are characterized as the “left and right” of Brazil’s politics.

Neither the PT nor the PSDB has the local machine-based heft to win their own majority in Congress. Even if they somehow formed an alliance, it would remain a minority bloc. But each is expected to lead the opposition when the other holds the presidency. So, in order to govern, they need to form alliances with a large party of Brazil’s “old school.” The PSDB, under Fernando Henrique Cardoso, was tied to the PFL. The PT is aligned with the Brazilian Democratic Movement Party (PMDB), Sarney’s party.

As a result, such “allies” gain leverage over the ostensible ruling party, witness a Brazilian journalist’s note that current dissatisfaction “emboldens” the PMDB to act against a PT president (link).   Money is often the object. Thus the suspicions of demonstrators over the Petrobras scandal, in which funds were allegedly diverted to PT allies and officials, per the Federal Prosecutor’s analysis.

Business has a long history of corruption in its own right. A second set of books, or “caixa dois,” is normal for any Brazilian enterprise. Extreme inequality, the rising expectations of an economy that has been growing in recent decades, and the effects of the recent global slowdown fan anti-corruption sentiment. This resentment led to mass protests in 2013 against the expense of the World Cup stadiums and programs. The PT, once considered a radical socialist party, has now become painted as part of a corrupt establishment.

Still, in the long view, Brazil has come a long way, with principled parties displacing old machines as the perennial contenders for the presidency. This expectation, plus a rising economy, has made protesting corruption an effort that is actually worth the trouble. Indeed, the current Petrobras scandal was unearthed by a team of prosecutors with new methods, determined to change the political culture. On the other hand, corruption persists, in politics and in business – an investment adviser was once heard telling a foreign conference that “Brazil is not for beginners.” In politics, even the PT and the PSDB have been drawn into the game.

Today the question is: will current scandals and protests push a next step in Brazil’s evolution, so that corruption becomes less a part of the political fabric?

 

Author

George Paik
George Paik

George F. Paik is a former political affairs officer in the U.S. Foreign Service, as well as a twenty year veteran of U.S. capital markets. He is a current board member and former chair of the World Affairs Forum (a sister to FPA in the World Affairs Councils of America network) in Stamford, CT. His work as a diplomat straddled the fall of the USSR, and included political analysis, human rights, trade affairs, and environmental policy, in postings were in Brazil and Trinidad, and in the Department of State. Financial experience includes stints with Mellon Bank, Manufacturers Hanover Trust Co. and People’s United Bank. He currently holds the position of Managing Director at Lord Capital, LLC, a firm focused on international trade finance.

Paik graduated from Harvard University with a BA in Social Studies; he also holds an MBA in Finance from the Wharton School of the University of Pennsylvania. He counts ten years playing Rugby, with club mates from countries around the globe, as part of his international experience.

americasdiplomats_socialmediaasset